Delivering earnings predictability and supporting productivity across the business are among the top challenges faced by business owners and the accounting professionals who serve as their trusted advisors. On the surface, meeting these challenges seems daunting. Where does a company even begin in defining a strategy to embrace these opportunities? The answer I offer may well raise the eyebrows of Finance professionals: best-in-class Travel and Entertainment (T&E) Expense management.
Ernie Humphrey will present the session, Delivering Strategic Value from T&E Expense Automation, at Accountex 2017.
Effective T&E expense management teaches valuable lessons in establishing internal controls, enhances the predictability of the second largest expense category for most companies, and positively impacts productivity from accounting to each and every employee who travels on company business.
T&E ranks as the second most difficult operating expense category to control. The people, process, and technology leveraged in establishing control over this expense category can serve as the roadmap to improve control and governance of expenses at a macro level across the business.
20/20 Vision Into T&E Spend
How can T&E expense management be tamed? It all starts with visibility. You can’t manage what you can’t see. Effective T&E can offer almost 20/20 vision into where company travelers are spending the company dime, in addition to visibility into the flow of T&E expenses to a granular level of the details of any expense report anywhere in the process of being reimbursed. This visibility includes who reviewed and approved an individual expense report and which categories of T&E spend will be impacted when reimbursement occurs.
Beyond visibility, business owners can have direct oversight over who approves what expenses down to the level of Merchant Category C Codes (MCCs) and can see who approves each expense. Finally, a T&E expense management solution can allow “control nirvana” to be realized. These systems allow for the automation of compliance with your company’s T&E policy. If your T&E policy is done right, control in the arena of T&E expenses is about as good as it gets.
Improve Working Capital Management
Forecasting any variable that impacts the company lines is never easy. Inaccurate and untimely forecasts negatively impact the quality of any decision making impacted by any variables being forecasted. If we look at T&E expenses, at the very least inaccurate and/or untimely forecasts of T&E expense can have a meaningful impact on the efficiency of working capital management.
Expense automation solutions offer companies the ability to set a companywide schedule (and are customizable by individual, department, line of business, etc.) for all expense reports to be submitted, as well as e-mail notification functionality that can keep things running smoothly through the submission and reimbursement process to minimize delays. These solutions can offer almost 20/20 visibility into T&E expenses and enhance the predictability of how long it takes an expense report to become due after expense report to its highest level. This is almost invaluable information for the person charged with forecasting T&E expenses, which, remember, represent the second largest operating expense category for most companies.
Enhance Employee Morale and Productivity
The T&E expense cycle, from report submission to reimbursement, can cause headaches across the enterprise. Company travelers who are forced to follow complex procedures and use outdated systems to submit and approve expense reports are frustrated each time they travel on company business. Even more importantly, their productivity is impacted. Sales professionals are the lifeblood of almost every company, and happy sales professionals sell.
Furthermore, any traveler who does not get reimbursed for T&E expenses incurred on his or her dime is not going to be a happy camper. As a treasury manager, I was never pleased to receive visits from my sales colleagues who had gotten back from three weeks away from their families and had not gotten reimbursed for their T&E-related expense in a timely manner. Of course there are many more company travelers than sales professionals that travel, and each one is important, which is why making travelers lives easier and making sure they are paid in a timely manner has such a meaningful impact on productivity across the enterprise.
Mobile Functionality Speeds Approvals
Expense solution mobile functionality allows road warriors smartphone access to easily start and complete reports on the go, and offers productivity tools such as the ability to build or review/approve reports in offline/airplane mode, along with friendly, customizable prompts that notify employees’ managers when reports are ready for approval.
Increasing T&E management effectiveness can offer the roadmap for effective business governance as well as insights into how to effectively forecast variables that impact key decisions. Better T&E management also make the lives of all company employees who travel easier, resulting in significant cost savings, impact productivity across the enterprise, and increased long-term stakeholder value in the process. Who knew?