2018 Expense Management Trends You Need to Know

2018 Expense Management Trends You Need to Know

Since 2013, our annual Expense Management Trends Report has helped organizations of all sizes stay informed of industry trends and best practices from their peers across North America. How does your organization handle their travel and expenses? Are you still stapling paper receipts or hounding employees to submit their reports on time?

You may be surprised that 49 percent of companies surveyed are still relying on a manual expense management process. This is a slight (three percent) increase compared to our 2017 survey. With technology becoming more accessible to any sized organization, the decision to keep a manual expense process has far-reaching implications.

By staying current with industry trends, you can see how your company compares with other organizations, and learn which areas of travel and expense management are still plaguing finance teams.

Manual methods sticking around
Enterprise companies are leading the way in adopting technology, with 39 percent of companies surveyed using a web-based expense solution, and 32 percent relying on an ERP or accounting package for expense management. These companies are seeing the value in automating timely manual processes—letting their employees focus on other value-added activities.

Surprisingly, 11 percent of enterprise companies surveyed are still using a manual process. (A manual process is defined here as any process that uses Excel spreadsheets, pen and paper, homegrown systems, or any combination thereof.) At a company of this size, the risk and lack of spend visibility would likely make a CFO’s head spin. And without having visibility into expenses, the finance team is left in the dark when strategizing for the years ahead, or negotiating better contracts with vendors today.

Biggest pains stay consistent
Expense management pains haven’t evolved much since launching our survey in 2013. For our 2018 report, we collected and analyzed responses from 546 CFOs, controllers, and other finance professionals outside our customer base to give you a snapshot of the industry, and where it may be headed. With technology becoming so engrained in our lives, some readers may find it shocking that so many moments of struggle persist in the world of finance.

The biggest pain points for finance teams was losing receipts or submitting reports without a receipt, tying employees failing to submit reports on time cited by 50% of respondents. It’s easy to see why finance teams would be frustrated with a minor task holding up reimbursements and accurate reporting—yet this pain persists.

Time spent reconciling, reviewing, and approving reports was the second biggest pain, cited by 31 percent of respondents. With the average number of expense reports being 25-50 percent of the full-time employee workforce, manually reviewing and approving expense reports is a business activity that needs a streamlined process.

Another long-standing pressure on to finance teams were errors on expense reports, with 30 percent of respondents citing this ongoing issue. Considering that employees should be submitting completed reports on-time and within policy, finance teams certainly want to spend less time “expense policing” and more time on strategy.

Leading pressures and top areas for improvement
Top organizational pressures on finance teams have stayed consistent with previous years. The top pressure driving organizations to improve T&E management was the need to reduce expense reporting costs cited by 27 percent of respondents. Improving the expense management process was cited by 34 percent of respondents as the most critical to improve in 2018.

Poor visibility into travel and expenses was the second biggest pressure (26 percent) driving change with finance teams across North America. Without finance teams having complete visibility into T&E spend, they can’t make informed strategic decisions that will help move the organization towards their goals. With the right integrations, an automated expense solution can provide nearly real-time expense data finance teams can budget against with confidence.

Travel booking was the third biggest area for improvement in 2018. Interestingly, according to our 2018 survey, 90 percent of companies had a travel policy in place, but only two percent of companies used technology to enforce policy—putting the company at a huge risk for overspending with manual policy checks or employee enforcement.

Having business travelers booking itineraries with any number of online services leaves a company at risk for overspending. With a travel book solution that is friendly for employees, travel managers, and everyone in between, you can provide a foundation for self-service bookings that fit within company policy and budget.

Did any of the struggles or organizational pressures sound familiar to you? How often does your team run up against some of the inefficiencies we mentioned above? If you want to make sure your team stays ahead of the pack, be sure to download our complimentary report and stay current with the T&E trends driving the industry.