Business travel is often looked upon with envy by people who don’t get to undertake journeys to distant lands. And why not, all of us have that one friend who takes a flight to Dublin, drowns himself in “some” good Irish whiskey, and on top of that gets reimbursed for everything he spent on.
Wait a sec! Everything? Yeah “almost” the full claim amount, he just needs to submit all the receipts for his expense, makes sure that he doesn’t violate any travel and expense policy when he’s three shots down, and wait for some expense report errors to be pointed out by finance. This has been the story so far of our average business traveler who flies miles on a mission to achieve the revenue forecasts for every quarter.
Business travel is here to stay
We often hear statements such as, “It’s too easy to sell these days, you have access to the global market.” What many of us completely overlook is the fact that our competitors have access to the same market.
The highly competitive nature of markets has forced businesses to double down on product differentiation but along with the innovation comes the challenge of marketing and selling the same, which requires business travel. The complex sales cycles for many industries require frequent travel for employees, especially in sales and marketing. Equipped with data on competition and potential customers sales reps are getting better at providing personalized offerings. Such a high-touch approach usually requires multiple meetings with various stakeholders, and these may be hosted at the local brewery or the nearest pizza joint.
According to GBTA, business travel will witness a CAGR of 5.8% over the next few years with global business travel spend reaching $1.6 trillion by 2020. With a more high-touch sales strategy, business travel expenses might also see a significant bump in entertainment, corporate gifting, and general travel-related expenses.
Update: Although business travel was only set to boom, the global pandemic brought the travel industry to a standstill. The future of business travel is
With frequent travel comes the rise in business expenses
Increased travel implies that the total cost of food, accommodation, and other expenses will rise along with the number of transactions. In order to ensure that the multitude of transactions impacts positively on a company's bottom lines, finance requires tools for implementing effective control measures.
A comprehensive expense management software assisted with a robust travel expense policy can make business travel the most rewarding of all sales channels. In fact, business travel expenses are one of the most controllable of an organization’s selling expenses.
The need for automating travel expense management
When it comes to controlling costs in business travel, the first problem finance encounters is that they don’t have enough data to base their decisions upon. Already fed up with the entire reimbursement process, everyone from the employee to the finance team, just wants to get done with it. The thought of analyzing the expense data doesn’t even come to the mind until the higher management asks them to furnish all the information on selling expenses.
The problem with such an approach is that with delays, visibility is undermined. Instead, if the expenses could be summarised on a department or deal level, performance could be gauged much more efficiently, on a weekly, bi-monthly, or monthly basis. Alternatively, with data pouring in on a daily basis, decision-makers aren’t left handicapped when figuring out answers to critical questions.
According to an article by McKinsey, CFOs are regularly identifying key areas in finance that could benefit from automation. Finance operations and reporting are the segments that could yield high returns in the long run just by tapping into the wealth of real-time data.
Expense management is one such area in finance operations which once automated can be controlled to deliver value for the organization. This is a far-fetched dream right now for organizations still using an effort-intensive approach to expense management, whether it be a manual system or legacy software. The same article also notes that finance professionals often wait for other functions like sales, marketing, or IT to initiate digital transformation for critical processes. This has often been the reason behind the slow rate of adoption of technologies in the finance function.
What will the future of travel expense reporting look like?
No manual data entry
Optical character recognition or the technology which helps us to electronically translate printed text to machine-encoded text is on the rise. A receipt scanner uses this automatic extraction feature to extract receipt information like amounts, vendor names, and invoice numbers.
The challenge though is the accuracy with which OCR is able to translate physical text into an electronic one. A reliable system also assigns the appropriate category to an expense using markers such as vendor names, and receipt items. Business travelers today click pictures of their receipts but are still seen entering information into expense entries. Eventually, with a robust receipt scanner, no one will make a data entry.
Bulk filing of expense
Going a step further is acknowledging the fact that no traveler wants to be going through expenses every now and then. The ideal experience would be to click pictures of all receipts and at the end of the trip use them to create an expense report. This will soon be a reality, because if the first challenge of extracting information accurately has been overcome, what follows is overcoming the computational load on the application, which is increasingly getting effectively managed by cloud load balancing devices.
With Fyle, employees can use our Bulkfyle feature to create multiple expense reports in one go. So, eventually, all an employee would do is select all receipt pictures in his mobile’s gallery and expenses would be created in an instant.
Policy violation free expense reports
With, extraction in real-time comes the ability to check expenses for policy violations at the same instant. Imagine what AI-powered expense reporting could look like going further, a camera overlay on a receipt, you start getting inputs on the screen - “currency: Euro”, “amount: 250”, “category: alcohol”, “recommendation: don’t file this expense, you aren’t allowed alcohol on your expense account”.
Well, this is already a reality, Fyle checks every submitted expense for a possible policy violation. Admins can filter out violations and make sure only compliant expenses are reimbursed, all this is done effortlessly.
Check out this video for more insight into our comprehensive policy engine:
When employees can report from anywhere at any time and still be sure that they’ll get reimbursed at the end of the month, why won’t they submit their reports on time? Cloud-based expense reporting software has this advantage over on-premise solutions. It promotes decentralized reporting for all business units and employees while ensuring secure access to the system.
Decentralized reporting again provides companies with real-time data on all company spending patterns from all distinct locations it is operating from, which can be leveraged when creating policies or while forecasting profitability of deals.
Collaboration on all fronts
One of the difficult aspects of employee reimbursements is managing exceptional claims and pending approvals. These are challenging because they need active participation from the various stakeholders, finance admins, approvers, and the claimant.
A good expense management system allows employees to resolve claim disputes within the system using in-app communication while maintaining a digital audit trail of all edits. Custom messages to managers reminding them to approve pending expense reports can again facilitate speedy reimbursements. With, collaboration taking center-stage in our world, it will probably be a highlight of the future of expense reporting.
We are almost there
At Fyle, we have built the world’s first automatic data extraction engine for paper and e-receipts with accurate extraction. With a powerful policy engine, we have helped our customers eliminate violations and reduce reimbursement turnaround times to up to a third of the original time taken. If you think you would like to transform expense reporting at your organization, schedule a demo with us right away.