9th Annual BTN Expense Manager Survey 2012

A compliance crackdown appears to be underway as corporations use reporting, technology and auditing tools to scrutinize travel expenses, according to the 9th annual Business Travel News Expense Manager Survey.

Nearly 70 percent of 168 travel buyers surveyed from December 2011 to February 2012 said they had reviewed or tightened expense policies and systems. Three in five said their organizations had deployed an online expense reimbursement system, while more than half said they had increased expense report auditing or equipped more employees with corporate cards. For each of the following, more than a quarter said they had upgraded to a new online expense reporting system, refused to reimburse or offered partial reimbursement of noncompliant expenses.

Please click here 9th_annual_ExpenseManagementSurvey2012 to view the digital edition of the 9th Annual Expense Manager Survey, featuring all charts and data, downloadable as a pdf.

Citigroup is among the companies that implemented partial reimbursement. Employees who book outside the designated travel agency receive back only 80 percent of business travel costs. Reaction was “very loud” during the first few months after the policy was implemented in October 2010, but it was important to strategic initiatives, according to global travel department director Mick Lee.

Increased Scrutiny

Citigroup is not alone. According to the survey, 24 percent of respondents from companies with $12 million or more in annual air spend indicated their organizations only partially reimburse for noncompliant travel. Another 7 percent planned to implement such a tactic this year.

“There is definitely increased scrutiny on spend, and organizations are looking more closely at what is being expensed,” said a spokesman for SumTotal Systems, which last summer acquired CyberShift and its Necho expense system. “Companies are establishing policies where there were none before and tightening those that were already in place.”

InterplX Technologies president and CEO Chuck Buckner said some clients have adjusted receipt requirements by payment source to drive compliance. For costs charged to a corporate card that would prepopulate an expense report, receipts are required only for expenses of $75 or more. For cash or personal funds, receipts are required for $10 or more. “This may seem like a minor deal, but it cuts down significantly on receipts needed and encourages use of the corporate card,” he added.

Spendvision product development head Andrew Whiting said his company also is “increasingly seeing companies tightening up their spending controls. CEOs have relaxed the reins a little [on travel], but the importance of scrutinizing spend and making sure policies are applied and followed has become all the more important. And, rightly so. Businesses should have visibility of what they are spending and need to be able to run reports on the who, where, what, why and how of all their payments.”

Rising costs prompted closer review of expenses at electronics manufacturer Jabil Circuit, according to global travel director Jackie Bispo. At her company, accounting is reviewing out-of-policy charges more closely and seeking approvals from higher levels.

Certain industries, notably banking and pharmaceuticals, needed to “tighten their policies due to additional government and public scrutiny,” said Acquis Consulting Group managing partner David Kaufman.

Kaufman questioned if BTN survey findings on the proportion of companies reviewing and tightening expense policies were “somewhat inflated” by how buyers define the tactics. “I’m confident most companies are thinking about their policies and give a cursory review,” he said. “However, I don’t think most companies are performing an in-depth review of their policies, such as benchmarking, comparing to best practices and analyzing data against policy.” Companies also define tighter policies differently, he said, ranging from “changing policy to auditing more thoroughly.”

Business travel bans, higher-level approvals for any travel and other policies “put in place during the Great Recession have been relaxed,” Kaufman said. “While I’d say policies have been tightened significantly over the past decade, we passed the peak.”

But BTN research respondents, along with those participating in other recent studies, this year indicated that compliance remained among their priorities, if not the top priority.

Aberdeen Group reported that nearly 60 percent of 140 travel or expense decision-makers responding to an online poll in January and February cited “improve expense management processes” among their 2012 priorities. Aberdeen found that “T&E expenses account for 8 percent to 12 percent of the average organization’s total budget.”

“Nearly 70 percent of organizations view T&E expense management as a strategic internal function,” according to Aberdeen senior research analyst Christopher Dwyer. “Less than 30 percent of organizations have real-time visibility into T&E spending against budget.”

A Carlson Wagonlit Travel poll of 290 global travel managers conducted in late 2011 also found traveler compliance as a top priority for those based in North America. Savings on air travel, ground transportation and hotel stays emerged as the primary focus for buyers located in other regions.

In the BTN research, among the 30 percent of travel buyer respondents representing organizations with annual air expenditures of $12 million or more, nearly 12 percent said they planned to tighten expense reimbursement policies in 2012. About 42 percent of all respondents are considered midsize with $1 million to $12 million in air spend. The remaining 28 percent had less than $1 million in annual air expenditures.

Some buyers are more closely scrutinizing expenses because technology or systems integration now allow them to do so. Nearly 80 percent of respondents from the biggest spenders and 62 percent of those from midsize firms said their organizations had implemented an online expense solution. Nearly 45 percent of the largest spenders indicated that their companies recently upgraded to a new online expense reimbursement system. More than half of all BTN survey respondents said they had integrated their expense systems with payment, general ledger/financial and/or human resources/organizational hierarchies. Doing so allows the companies to report in greater detail—by business unit and perhaps even in real time rather than monthly or quarterly.

Reporting from expense systems, integrated systems or the latest breed of analytics is prompting some of the policy tweaks, according to IBM Global Expense Reporting Solutions director Raymond Curatolo. “Customers now have the data that allows them to tighten policies,” he said. Of customers on the latest version of IBM’s expense system, more than 80 percent are using new analytical capabilities, he added.

Aberdeen Group in its March expense management study found that such practices were among those that separated the top 20 percent of survey respondents from the rest, in terms of performance in expense report processing costs, compliance to corporate travel policies and percentage of business travel spend under management. The top 20 percent of companies it surveyed had “54 percent higher likelihood to regularly report on policy compliance” than other companies, along with 57 percent higher likelihood to leverage end-to-end travel and expense management solutions. The top 20 percent were 50 percent more likely to “have real-time visibility into T&E spending against budget,” according to the report.

Among the largest travel buyers surveyed by BTN, 83 percent said they had integrated their expense solutions with payment and more than three-quarters said they had also integrated their HR/organizational hierarchy and general ledger/financials. Nearly 40 percent of respondents in this large-spend category said they had integrated online booking with expense and about 9 percent more said they planned to do so in 2012.

Across all respondents, 66 percent said they had integrated payment and expense solutions, consistent with last year’s survey results. Prepopulation of card data into expense typically is a major time-savers for employees and auditors who no longer have to enter or correct data.

“If dollars are due the employee, I don’t know how they reimburse without payment integration,” said IBM’s Curatolo. “Every one of our clients has integrated to a payment component on the back end, whether in-house, external party or through our partner.”

Integration with client financial and other systems always has been IBM’s focus, Curatolo said, and demand has remained constant. But in the midmarket, trends toward standardization of human resources and financial systems “could be putting them in a position to ask for seamless integration.”

Spendvision’s Whiting said integrations with financial, general ledger, HR, payroll, accounts payable and other systems are so universal among the company’s client base that it now allows customers “to either use standard interfaces” or have Spendvision manage them.

Databasics sales director Chris Harley said nearly every deployment involves integrations with HR/organizational hierarchy or profiles, and often extends to financial or accounting systems. Some clients have integrated with as many as 10 internal or external systems to pull in or push out data, he added.

Booking-To-Expense Integration

Despite decades of noise about the benefits of booking-to-expense integration, only three of 10 respondents in the BTN study said they had it in place. “It’s not that clients aren’t interested,” Curatolo said. “Clients are very interested, but still in the infancy stage of actually doing it.” While IBM has a partnership with GetThere, Curatolo said the strategy is to integrate “through the global distribution system or travel agency.”

GetThere also has a partnership with SAP for three versions of its platform and technical integrations with Infor, Insperity ExpensAble and Chrome River, according to GetThere expense and telepresence alliances director Liz Cox. Demand initially was slow but picked up considerably in recent months, she said.

Concur aggressively has promoted its integrated travel and expense platform and said more than 70 percent of new implementations have opted for it.

Acquis’ Kaufman said his firm of late has seen greater interest in booking-to-expense integration. “This is a case where the marketing and pricing will play into the expansion of booking and expense integration, but companies are still figuring out how to take advantage of the functionality,” he said.

As to the challenges related to such integration, more than half (53 percent) of buyers surveyed by BTN cited budget as among the top two most difficult, followed by technology incompatibility (47 percent), management support (46 percent), an inability to justify benefits (34 percent) and identifying the person/department/company to lead integration (33 percent).

“The challenge most businesses have is getting a complete picture,” noted Spendvision’s Whiting. “It’s a complex undertaking, as most have a mix of GDS, non-GDS and traditionally booked activity, and unique needs. We find that having a single point of integration is the most prevalent need and challenge businesses face. The booking merely identifies what is expected. It’s the spend data that tells the customer what actually happened—a far more compelling and valuable story.”

Mobile Demand

Nearly half of BTN survey respondents rated mobile as an expense functionality of most importance for their travelers. InterplX’s Buckner said actual usage of “mobile platforms for entering and approving expenses is still quite low. We believe this will grow over time.”

Buckner said he also has noticed “an increased focus on making the process simpler for end users. The purpose of automating a process is to streamline it. If you layer in complexity and hassle, the end users will revolt. We see organizations doing everything they can to make the process fast and easy for the end user.”

Just as long as it complies with company policy.

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