Expense report management – process optimization
Digital transformation can modernize any company process, including expense report process optimization. And it is more than simply streamlining tasks. Technological innovation offers several key areas for improvement, such as cost reduction, better understanding of practices or decision-making support.
With some 30 billion euros of expenditure each year (according the consulting firm EPSA), expense accounts are a constant, time-consuming management item for companies. At a time when cost reductions are becoming more and more crucial, software tools provide relevant options for optimization. However, beyond this, the shift to technology creates an opportunity for information control and process simplification.
A good example of how innovative software can contribute is integrating VAT management within IT solutions. Some 80% of European companies do not systematically recover foreign VAT on business travel resulting in losses of 2 billion euros out of a total of 7 to 8 billion euros in VAT across Europe according to VAT IT. However, this can be easily rectified by automatically taking into account the differences between countries in this area, digitally processing the associated documents, and quickly integrating them into accounting systems.
Let’s not forget that many companies spend a lot of time negotiating preferential rates with their business travel supplier partners, with the hope of obtaining gains of 4 to 5%, whereas VAT alone generally amounts to 20%.
Finding a winning answer
Another interesting development in this area is the adoption of innovative payment solutions. Over 30% of companies still use cash advances, resulting in cumbersome management and numerous disadvantages. Automatic centralization of payments, by means of lodged card or a virtual card for example, means that the business traveler does not need to spend time entering expense reports and allows immediate feedback on travel data.
As well as time savings, there is also a greater understanding of what is going on and an opportunity to identify areas for improvement. All remittance sources can be consolidated. By cross-referencing these with other criteria such as HR data, this global information represents a further added value.
Many experts draw attention to the effectiveness of solution deployment and what needs to be done to encourage the take-up of technological innovations. According to a GBTA study carried out in 2018, more than two thirds of travelers in the European Union make reservations outside company channels, despite having access to online booking tools. This highlights the failure of technological initiatives. It is advisable to involve the accounting departments well in advance of new projects, as well as HR, which often help to bring together the different stakeholders. Sponsorship is another essential element, especially in the case of complex multi-site, cross-border deployments.