Traditional Processes vs. Automated Solutions
Expense management, when done manually, is a labour-intensive and time-consuming process. From manually printing off expense reports and attaching copies of receipts, waiting for manager approval to having the expense processed days later, manual expense management is a slow and notoriously inefficient process.
With so many drawbacks to using a manual expense management process, there is a strong incentive for businesses to adopt automated travel and expense (T&E) management solutions: dedicated software that can automate the entire expense management process to provide automated approval or rejection based on pre-set rules.
However, our new research suggests that there is still a high degree of confusion among large enterprises – that is, the stakeholders who stand to benefit the most from ‘decluttering’ expense management processes - regarding the full range of services that these solutions offer.
As such, we have outlined the core functions that users can expect from modern automated T&E management solutions – as well as the benefits that these functionalities offer to streamlining operations, reducing business expenses, and mitigating risk.
Fully Integrated Payment Options
T&E management solutions often come with a range of payment integration features, including the offering and management of credit cards, purchasing and procurement cards, virtual cards, and mobile wallets.
While these payment methods are typically offered directly by a dedicated expense management solution provider, most solutions are also capable of integrating third-party payment methods into its system, facilitating the import of credit card data and more onto their systems for fast and efficient expense reconciliation.
By offering business credit cards, purchasing and procurement cards and/or virtual cards, T&E management solutions are able to offer businesses greater control over their spending. These cards often include the capabilities for managers to set employee-specific spend limits and can limit purchases to only specific channels or categories to provide greater fiscal control and ensure that expense spending remains within policy.
Furthermore, payment integration with T&E management solutions enables employees to submit expense claims for QR code payments, as well as offering the functionality to add corporate cards to digital wallets.
Streamlined Expense Reporting
The central feature of expense management software is its inherent ability to automatically generate expense reports on demand. Most expense management solutions come with a companion mobile app that allows employees to submit expense reports on the go, anytime anywhere.
Employees can leverage OCR (Optical Character Recognition) capabilities, which are now ubiquitous across expense solutions, to automatically populate expense reports with the necessary information by simply taking a photo of a receipt. The digital copies of the receipts can then be simply attached to the expense report ensuring that managers have access to all the information they need to decide whether to approve a claim.
These expense reports can then be accessed and reviewed by managers and finance teams and/or accounts payable teams at their convenience.
Efficient Approval Workflows
T&E management software leverages configurable approval workflows to expedite the approval process for submitted expense claims. These solutions can route expense claims to the various managers depending on a range of factors, such as employee role, expense category, location and more, to ensure that the most appropriate manager is tasked with reviewing the expense claim.
This can help improve the efficiency of the expense management process, ensuring that managers must only review claims that are relevant to their job and are not inundated with unrelated claims, such as those from employees in another team.
Approval workflows can also be set up to automatically approve routine expenses, or those below a certain threshold, without requiring manager approval so long as the claim meets pre-established criteria and rules. This further streamlines the approval process and reduces the number of claims that a manager must manually review.
Comprehensive Data & Analytics
T&E management software typically comes equipped with advanced data and analytics features which can provide businesses with both high-level and in-depth insights into employee spending. Managers can review historic data, as well as gaining real-time insights into current spending behaviour, analysing expenses by expense categories, time, location, employee level and more.
By providing businesses with in-depth data, they can identify high- and low-cost expense categories, discover and analyse spending trends and patterns, and gain an overall better understanding over employee’s expense behaviours. This will aid businesses in reducing unnecessary expenses in the future, as well as enabling them to set more accurate and reliable budgets based on reliable historic expense data.
Third-party Software Integrations
T&E management software is increasingly offering third-party integration capabilities, particularly with accounting, CRM (Customer Relationship Management), and ERP (Enterprise Resource Planning) solutions including Xero, QuickBooks, Oracle, SAP, and Sage.
These integrations help further simplify the expense management process; enabling businesses to automatically import expense management data into finance and accounting systems, making managing business finances and spending more efficient and convenient for managers.
These integrations also enable businesses to manage a broad array of business processes form a singular software, often able to manage supply chain logistics, HR (Human Resources), finance and accounting and travel and expense management processes from a single software. This enables a business to improve the efficiency and ease of business management processes.
Accurate Mileage Tracking
Dedicated T&E management software is increasingly offering a range of mileage-tracking solutions. These include calculating the distance between two locations using map services, or tracking mileage using real-time data gathered as employees travel to appointments.
Most solutions also enable employees to manually enter their mileage driven. Based upon an employee’s mileage, solutions can automatically calculate the total amount for reimbursement, considering any variations in price-per-mile based on location, time of day, vehicle type, fuel type, employee job role and more.
Artificial Intelligence and Machine Learning
Artificial Intelligence (AI) and Machine Learning (ML) have helped transform the travel and expense management software market.
For corporate travel management, AI and ML can be used to predict future bookings and travel spend by analysing historical data; enabling businesses to set more accurate budgets in the future. Likewise, in the travel management space, AI and ML can be leveraged to ensure that future bookings align with the preferences of an individual employee, considering prior bookings to determine the most appropriate destinations, travel times, modes of transport and more to ensure that business travel is as seamless and enjoyable as possible for the employee.
AI assistants can also be used to enhance the travel management process, supporting employees attempting to make a booking as and when needed. Companies may also leverage ML to notify employees of flight delays or other travel disruptions.
In terms of expense management, the greatest implementation of AI and ML is the integration of OCR. This uses pattern recognition and image processing capabilities to capture data from receipts and automatically populate expense reports with the data. This speeds up the expense process for employees and eliminates the need to manage physical copies of receipts.
AI and ML can also be used to conduct automatic policy violation checks and provides alerts and notifications as necessary, based upon a predefined set of instructions and rules - in order to combat the types of expense fraud we disuss in our latest whitepaper.
What Does the Future Hold?
Businesses frequently look to integrate T&E management software into other business software solutions, such as ERP, HR, and financial and accounting software. This helps enterprises better manage their business all from a single solution.
Furthermore, by integrating T&E management software with accounting software, businesses can often accelerate the reconciliation process, by having the accounting software automatically reconcile claims and reimburse employees based on data from the T&E solution.
With businesses increasingly valuing integration capabilities in T&E management software, it is vital that vendors in the market build strong partnerships with third party solutions, enabling seamless integration for their software. The more possible integrations a T&E management solution has, the greater its potential customer base will become.
As such, it is vital that vendors do not exclude themselves by not having the necessary integrations established. Therefore, Juniper Research recommends that T&E vendors look to continuously build and foster strategic partnerships with third-party software providers.
Related Reading
Our complimentary whitepaper examines the T&E management market, considering the impact that employee expense fraud is having toawards encouraging adoption of T&E management software - alongside a summary of our forecast for total T&E management software revenue in 2027.
"The total revenue generated by T&E management software will reach $16 billion globally by 2027, up from $8.7 billion in 2022 - representing 84% over the next five years. We anticipate that growing incidences of employee expense fraud will drive demand for T&E management solutions, given that manual processes are generally unable to identify all cases of fraudulent activity within large enterprises due to the volume of expense reports submitted."