Managing business travel and expenses remains a significant cost for companies, with T&E spend exceeding 10% of the budget for many organizations.[1] Yet despite these high costs, most companies continue relying on manual methods to enforce expense policies, resulting in inefficiencies and unnecessary spend.
According to one survey, nearly 80% of companies have formal T&E policies but around 70% still use manual processes to enforce them.[2]
In this comprehensive guide, we’ll take an in-depth look at:
- What travel and expense (T&E) automation entails
- The major challenges of manual T&E management
- The benefits companies can realize by transitioning to automated systems
- Leading solutions providers in the T&E management space
We’ll also incorporate insights from over a decade of experience in data extraction and analytics to provide unique perspective. Let’s get started.
What is Travel & Expense (T&E) Automation?
Before we dive into the details, let’s quickly define what travel and expense (T&E) automation means:
T&E automation refers to using technology to digitize, streamline and automate the end-to-end process of booking business travel, tracking trip/entertainment expenses, submitting expense reports, managing approvals, and processing employee reimbursements.
This includes leveraging automation for key steps such as:
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Travel booking: Integrating T&E systems with online travel booking platforms to enable seamless scheduling of flights, hotels, rental cars and more based on policy compliance and preferred rates.
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Receipt capture: Using AI-based optical character recognition (OCR) and natural language processing (NLP) to extract key details from scanned or photographed receipts and auto-populate expense reports. Removing manual data entry.
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Mileage tracking: Auto-logging mileage accrued on a trip based on GPS data from company vehicles, rental cars and/or employee phones.
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Report creation: Enabling employees to easily create and submit expenses reports on web/mobile apps versus traditional paper forms.
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Approval workflows: Automatically routing reports to approvers and checking for policy compliance.
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Reimbursements: Seamlessly reconciling report data with corporate card feeds to process reimbursements to employees while updating accounting systems.
The main goals are saving time and costs compared to manual T&E processing while also improving accuracy, efficiency, visibility and control.
Now let’s look at the major drawbacks of manual T&E management that automation aims to solve.
Challenges of Manual T&E Management
Despite advances in technology, manual and disjointed processes still dominate traditional T&E management approaches. This leads to a number of challenges including:
Time-Consuming, Error-Prone Expense Reporting
Completing expense reports remains one of the top pain points of manual T&E management. Employees must collect paper receipts, manually enter details from each receipt, total costs, submit print forms for approval, and keep track of status.
This tedious process often results in:
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Lost or missing receipts: Employees misplacing receipts and submitting reports without proper documentation. In one survey, lost receipts were a top challenge faced by over 25% of organizations.[3]
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Delayed report submission: Employees failing to complete reports on time due to the hassle of manual efforts. Over 15% of expense reports are submitted late according to data from Concur.[4]
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Incorrect data entry: Manual data entry leading to incorrect expense amounts, categories or other details. An estimated 20% of reports contain errors.[5]
This lack of accuracy and efficiency in reporting adds unnecessary costs and overhead for organizations.
Increased Risk of Expense Report Fraud
Manual processes also heighten the risk of fraudulent activities within expense reporting. Common fraudulent behaviors include:
- Submitting single expenses multiple times
- Overstating claims by inflating expense amounts
- Including personal or non-work related costs
- Using fake or altered receipts
These behaviors often go undetected within manual review processes. Expense fraud costs companies $2.8 billion annually just within the U.S. according to data from U.S. Bank.[6]
Slow Reimbursement Times
The manual effort involved in submitting, reviewing, approving and processing expense reports leads to very slow reimbursement times.
It typically takes over 1 month for employees to be reimbursed with manual T&E management processes.[7] This forces employees to cover substantial out-of-pocket costs on the company’s behalf which damages satisfaction and trust.
Limited Visibility & Insights
Traditional T&E processes also provide very limited visibility into spending data. Expenses are siloed across individual reports. Analyzing patterns, ensuring compliance, forecasting costs and identifying potential fraud becomes extremely difficult.
Benefits of Travel & Expense Automation
Automating the end-to-end T&E process provides solutions to these challenges while bringing additional benefits like:
Streamlined Expense Reporting
Automating the reporting process saves significant time for employees while improving accuracy. Key capabilities include:
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Mobile receipt capture: Employees snap photos of receipts which are processed via AI-based OCR to automatically extract key details like merchant, date, amount etc. No manual data entry needed.
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Smart mileage tracking: Mileage is auto-logged by tracking employee location via company vehicles, rental cars or phones. Trips are mapped to business purposes based on calendar appointments.
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Policy compliance checks: Expenses are automatically checked against company T&E policies to identify any non-compliant costs for correction pre-submission.
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Pre-population: Employee profiles, cost centers, general ledger codes are pulled from integrated HR and Accounting systems to pre-populate.
Together these automations streamline reporting, reducing time spent from hours to minutes while improving accuracy.
Enhanced Visibility & Control
Automation provides complete visibility into T&E spend from a centralized data repository, enabling:
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One version of truth: All T&E data compiled in one place vs spread across expense reports.
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Automated audit trails: Detailed activity logging provides compliance support.
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Advanced reporting & analytics: Interactive dashboards to analyze spending patterns, benchmark performance, and identify waste.
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Predictive forecasting: AI-driven systems can predict future spend based on historical data.
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Anomaly detection: Algorithmic monitoring identifies potential duplicate, excessive or fraudulent expenses for review.
This level of real-time insight facilitates greater control over T&E spend and budgeting.
Faster Reimbursement Cycles
Automated systems process expense reports and issue reimbursements in 1-2 weeks rather than the 1-2 months typical for manual reviews.
By preventing out-of-pocket expenses and lengthy wait times, automated reimbursements greatly improve employee experience.
Increased Efficiency Through Integration
T&E automation enables seamless integration between related finance systems:
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ERP integration: Automated reconciliation of expenses against corporate card purchases logged within the company ERP.
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HRMS integration: Employee profiles, cost centers and approver data flows from the HRMS.
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Accounting system integration: Reimbursements automatically post into general ledger and accounts payable systems.
This eliminates redundant manual processes between siloed systems.
Comparing Leading T&E Automation Solutions
Many robust T&E automation solutions exist in the market across a spectrum of capabilities and pricing. Below we compare some leading options:
As shown above, solutions like SAP Concur and Certify tend to provide the most comprehensive capabilities – with advanced reporting, integrations, fraud protection and global scale. They work well for large, complex organizations.
Lower cost tools like Expensify and Rydoo are better suited to small/medium businesses with more straightforward needs.
Recommendations for Choosing a Solution
Here are some best practices when evaluating T&E automation tools:
- Clearly identify your must-have features vs nice-to-haves
- Consider ease of use – complex tools could hinder user adoption
- Ensure integration support for your existing finance systems
- Look for advanced reporting/analytics to maximize visibility
- Prioritize solutions with proven ROI results specific to your industry
- Avoid tools lacking comprehensive fraud protection
Bringing in experts to audit needs, shortlist vendors and support implementation is highly recommended to maximize value.
The Bottom Line
In summary, organizations can achieve significant benefits by transitioning from manual processes to automated systems for travel and expense management including:
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80% reduction in reporting time – via mobile receipt capture and automated workflows[8]
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2-4x faster reimbursements – through streamlined approvals and integrated accounting [9]
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30% higher policy compliance – ensured by automated policy checking before submission[10]
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~30% lower T&E processing costs – through staff time savings from elimination of manual efforts[11]
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Rapid ROI – solutions can pay for themselves in less than 12 months in many cases[12]
For any organization seeking to optimize T&E management, automating this critical finance process is a smart investment. Reach out to discuss your unique use case and goals – we‘re happy to advise on the automation approach and solutions that will best meet your needs.
Related Resources:
- Invoice Processing Automation Guide
- Accounts Payable Automation Guide
- 5 Ways AI is Revolutionizing Finance Teams
[1] “4 Ways to prevent expense report fraud.” U.S. Bank. Accessed 9 December 2022.
[2] “2021 Travel and Expense Management Trends Survey Demographics Travel and Expense Policy Managing Non-Employee Spend Dedicated So. (PDF)” Emburse. Accessed 9 December 2022.
[3] "Lost receipts, lack of standardization among top expense mgt challenges." BilltoMobile. Accessed 17 Jan 2023.
[4] "Insider secrets to perfect expense reports." Concur. Accessed 17 Jan 2023.
[5] "How Much Do Expense Reports Really Cost a Company?" Global Business Travel Association. 20 July 2022.
[6] See [1]
[7] Perrotta, Adam. “2019: Navigating from T&E to ROI.” Business Travel News. 17 March 2019.
[8] "The Coach Approach to Travel Expense Management." Lola.com. Accessed 17 Jan 2023.
[9] “Automating Travel and Expense Management." Concur. Accessed 17 Jan 2023.
[10] “The ROI of Automating T&E Management." Rydoo. Accessed 17 Jan 2023.
[11] “The Total Economic ImpactTM Of Concur Travel, Expense And Invoic." Forrester. June 2020.
[12] “Automating Travel and Expense Management." Concur.
