Why T&E Should Matter to CFOs (Part I of II)

Why T&E Should Matter to CFOs (Part I of II)

A controller walks into the CFO’s office and says, “we can really impact our bottom line this year if we invest in managing our travel and entertainment (T&E) expenses more effectively.” Unfortunately, to many CFOs it might seem like the start of an accounting joke, but for many companies of all sizes this is a fact, and they just don’t realize it. Second only to payroll, T&E spend comprises the largest business expense. If that is not enough to get a CFO’s attention, here are a few other statistics that might help out on that front: according to a recent study published by the Global Business Travel Association (GBTA), 2015 Global Travel Price Outlook, travel spending reached $1.1 trillion USD in 2013 and is expected to advance by 6.9% and 8.6% in 2014 and 2015, respectively. And according to a 2014 Forrester Report, The Power Of Real-Time Insight: How Better Visibility, Data Analytics, And Reporting Can Optimize Your T&E Spend, which surveyed of 348 financial decision-makers around the world, T&E ranks as the second most difficult operating expense category to control.

The following realities based on the results of Certify’s Annual Expense Management Outlook: T&E Trends and Bookmarks for 2015 offer three more compelling reasons why CFOs need to give T&E expense management its due:
1. 59% of companies state their corporate compliance rate is 80% or less with T&E policies, indicating 20% of expenses submitted are in violation of policy.
  • Over 15% of companies report a compliance rate of 50% or less

  • 10% of companies report a compliance rate of 20% or less

  • These violations can cost companies tens of thousands, if not tens of millions, of dollars right off the bottom line.

2. T&E expense management can be painful for those charged with the administration and management of T&E at your company. The following represents the distribution of the largest pain point across six issues impacting the productivity and morale of those involved in managing your company’s T&E expenses:
  • Employees failure to submit expense reports on time: 39%

  • The time it takes to reconcile, review, and approve reports: 38%

  • Employees losing paper receipts/submitting without receipts: 33%

  • Reconciling the data: 23%

  • Errors on the report (incorrect codes, payments amounts): 23%

  • Reviewing for policy violations: 20%

3. The average time from when an employee submits an expense report to when they receive reimbursement is eye-opening and impacts the morale of all those who travel:
  • Over 7 days for 48% for companies leveraging a manual expense management

  • Over 7 days for 37% for companies leveraging an automated expense management system

  • Over 12 days for more than 15% for all companies, whether leveraging a manual or automated system

The good news for CFOs is that a pain reliever for their company’s T&E headaches does exist: the right expense management solution. Part II of Why T&E Should Matter to CFOs will focus on the results that companies are seeing when aligning a proper diet of processes and procedures with the right pain reliever (expense report management solution).

Ernie Humphrey - CEO Thought Leadership 360
Written By Ernie Humphrey
Guest Contributor

Ernie currently serves as the CEO of 360 Thought Leadership Consulting. 360 Thought Leadership Consulting helps companies define and unlock the strategic value of their thought leadership programs. Formerly, Ernie served as the Vice President, Educational Programs for Proformative, and the as the Director of Treasury Services and as a Director of the Corporate Treasurers Council for the Association for Financial Professionals. Ernie has a BS and MS in Economics both from Purdue University.