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, make sure that he doesn’t violate an expense policy when he’s three shots down, and wait for some mistake 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.
With frequent travel comes the rise in selling 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 to a company’s bottom lines, finance requires tools for implementing effective control measures.
A comprehensive travel program 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 of the entire reimbursement process, everyone from the employee to the finance team, just wants to get done with it. The thought of using 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 which could benefit from automation. Finance operations and reporting are the segments which 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 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?
Automatic extraction using OCR
Optical character recognition or the technology which helps us to electronically translate printed text to machine-encoded text is on the rise. Using automatic extraction a traveling employee will be able to extract receipt information like amounts, vendor names, and invoice number.
The challenge though is the accuracy with which OCR is able to translate physical text into 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, no one will make data entry.
Bulk filing of expenses
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 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. In fact, we at Fyle, are already working on something and will soon share something with you.
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.
Expenses will always be compliant
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.
When you can report from anywhere at any time and still be sure that you’ll get reimbursed at the end of the month, why won’t you submit your reports on time? Cloud-based expense reporting has this advantage over on-premise solutions that 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 location 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 an audit 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
If you have read this far, we would like to make you aware of a few developments at Fyle. Our engineers have built the world’s first automatic data extraction engine for paper and e-receipts and the accuracy of extraction is mind-boggling. 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.