The Biggest Expense Report Hassles for Travel Managers

In an April 2015 Aberdeen Group report, Vice President and Research Group Director Bryan Ball asks, how close are businesses to “achieving the expense report that writes itself?” In short, he says, we are “closer than you might think.”

Despite Ball’s optimistic predictions and clear explanations of technologies that are undeniably making the travel expense reporting process easier than ever, many travel managers still currently face challenges to efficient expense reporting. What are some of those challenges, and what can travel managers do to overcome these hurdles?

Expense Reporting Context and Challenges

While travelers are most often asked to book flights using payment methods controlled by the company (such as a company-held credit card or Central Travel Account), hotel and ground transportation are often booked by the traveler through either a company card or with their own personal credit card. These expenses, along with items such as dry cleaning and food, therefore tend to cause more issues when it comes to expense reporting. Yet, even airfare causes concerns for some companies, depending on how travel managers set up the booking and expense processes.

1. Expense report preparation and processing

travel-management-consultationAccording to an October 2015 Global Business Travel Association (GBTA) study of 533 travel managers, buyers, and intermediaries, the biggest problem for effective expense reporting is the actual process of preparing the expense report, including setting up the report, entering data, and attaching receipts or images of receipts to the reports. Perhaps not surprisingly, these complaints are more common for those who do not use third-party software to process their reports, which accounted for about 19% of the travel managers in the study.

Getting reports through the appropriate channels for approval and processing can also be time-consuming for travel managers and others involved in the expense reporting process, especially when an error is found that needs to be corrected. This costs companies not only valuable time but money. In fact, a “big priority” in expense reporting cited by Ball in the April 2015 study is the need to reduce expense-processing costs. Part of the reason expense reporting costs companies money and time is due to missing and/or incomplete information from travelers or errors caused during the travel manager’s data entry process.

2. Missing and incorrect information

A whopping 78% of the travel managers in the GBTA study, in fact, identified missing or incorrect information as the most significant challenge they have in efficiently processing an expense report. The GBTA states that it costs a company, on average, $58 for processing an expense report for a one-night hotel stay and approximately $52 to correct the report if it was submitted with an error. Further, the GBTA shows that 19% of expense reports contain errors, meaning companies are “spending thousands of hours and hundreds of dollars fixing mistakes in submitted expense reports each year.”

Some expense reporting processes are digital whereas others are still largely on paper.
Some expense reporting processes are digital whereas others are still largely on paper.

Missing information also becomes a problem when travelers lose receipts or fail to attach them to expense reports. The GBTA study reports that while expense reports are mostly digital, receipt submissions are still largely paper.

3. Poor visibility into spending

Often, the missing information that travel managers are dealing with is related to their inability to see spending at the detailed level necessary to either process reports accurately or ensure that travel is booked in a way that is saving the company money. In fact, one of the greatest T&E pressures cited by the survey respondents in Bryan Ball’s study is poor visibility into spending.

Maarten Groeneveld, a senior executive in the travel industry, tells us that travelers’ expenses often “gets lump-summed in one amount and accounting is often not breaking down the individual items. Hence, for a travel manager, they have to unravel these claims or push for them to be itemized. In general, it’s a hassle.” Related to Groeneveld’s claim, the GBTA study found that the ways travelers are required to report their expenses vary widely. Around 60% of travel managers work for companies that ask travelers to report expenses in itemized lists by type (such as room service, dry cleaning). Around 27% ask travelers to report a sum total per transaction, where room service and dry cleaning would simply be reported as ancillary costs. So, depending on how travelers are asked to show their expenses, it can be complicated for travel managers to see how travelers are spending and then process reports.

4. Out-of-policy spending

Some companies have very detailed corporate travel policies, whereas others take a more laid-back approach. Regardless of the company’s policies, travelers do occasionally book out-of-policy. Groeneveld tells us that travelers are often left on their own to “decide what is good or not” when it comes to booking. According to Groeneveld, “the scrutiny often takes place on return.” This can cause additional headaches for travel managers or accounting departments that may need to seek approval for out-of-policy spend. Also, if some companies do not audit small expenses, out-of-policy spend could go unnoticed for a while, meaning the company is spending more than it should be.


How Travel Managers Can Resolve Expense Report Headaches

For more on how to resolve these issues, check out our tips for dealing with expense reporting hassles.

 

 

 

Jenna Sheffield

Jenna teaches college-level writing courses at the University of New Haven, and she regularly freelances for 30SecondsToFly. When she’s not writing or teaching, she can be found traveling, running after her toddler, and/or enjoying some mac & cheese.

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