Almost every employee, at some point in their job, has an obligation to spend the company's money in a policy-compliant way. Yet, I don’t think you will find a company for which the creation of an expense report is a key performance indicator. Instead, what companies want is to settle payments for employee-initiated spend, while maintaining an appropriate level of guidance, oversight, and control. Starting in 2022 there will be less emphasis on expense report creation, as more organizations recognize this and shift their focus to settling purchases as efficiently as possible.

By now, it’s fair to assume that all the big gains to make the internal combustion engine more efficient have already taken place. You could continue to expend greater resources to achieve smaller gains, though to make impactful change at this point a bigger pivot is needed. There will always be a place for the internal combustion engine in our world, but a shift to more electric vehicles, for example, is needed to meaningfully reduce a car ride’s impact on the environment. 

I think about expense reporting in a similar way. Technology providers can spend increasing time and money to make incremental gains, but the change in mindset and approach, to a focus on continuous policy feedback and automated settlement, is needed to usher in the next wave of efficiency and innovation. 

While the traditional expense report isn’t going away any time soon, more innovation will lead to bigger improvements in capturing, processing, and verifying expenses, driven by increasingly sophisticated artificial intelligence. With this pivot we will shrink and evaporate expense reports, with a subset of expenses moving to automated settlement and skipping the traditional expense report process entirely.

That may seem like a counter-intuitive approach for a company like SAP Concur that makes money off expense reports. It brings to mind the disruption in the music industry in the early 2000s. Apple introduced the iTunes store and all of sudden, people could curate their own playlists, buying individual songs instead of entire albums, and even carrying all their music around in their pocket with an iPod. But the introduction of the iPhone, followed by streaming services like Apple Music and others, gave consumers an even more attractive and user-friendly way to consume and discover music. 

Expense reports are ripe for a similar level of innovation now and over the next few years. Better integration with suppliers, better documentation, smarter AI monitoring of spending and compliance, will all be needed from providers. And of course, companies have strict requirements for guidance, oversight and control. Technology must help employees remain compliant with company policy, while helping the organization remain compliant with increasingly complex laws, rules, and regulations. 

Whether to manage cash flow and forecast spend, or know which suppliers are being used and how much spending is budgeted, organizations of all sizes need to be able to manage employee spend while reducing risk, saving money and ensuring compliance without sacrificing employee productivity. With continued innovation and more sophisticated AI tools, bypassing the traditional expense report and moving straight to settlement is a realistic goal for the industry to contemplate in 2022.