How to Get a Modern Travel and Expense Management Platform
Each year, nearly 5 million Americans travel internationally for business. And while business travel dipped sharply in 2020 due to the Covid-19 pandemic, the Global Business Travel Association predicts a full recovery to pre-pandemic levels by 2025, with business travel spending estimated to hit $1.4 trillion a year by the end of 2024.
That’s a lot of hotels, ride shares, flights, and other incidentals to organize, purchase, and expense. Travel and expense (T&E) systems are designed to make it easier for companies and employees to manage it all, from scheduling trips to submitting expenses, policy adherence, cost savings, and budget management.
Because of its complexity, many have come to believe that every aspect of travel and expense management must reside in a single platform. But it’s worth stepping back to consider whether the best integration option is a single platform. In fact, an all-in-one approach can be a liability, compromising user experience, reducing adoption, and failing to take advantage of data and technology innovations.
Let’s discuss why integrated travel and expense is so valuable and how a more modern approach can drive employee satisfaction, efficiency, and value for your organization.
Why companies value integrated T&E
There are two main reasons companies seek out integrated travel and expense platforms. The first is a streamlined user experience. The days of submitting an expense report using Excel spreadsheets and scanning tattered paper receipts are merely a miserable memory for anyone who lived through them.
A key objective of early integrated travel and expense platforms was to reduce manual, time-consuming efforts. The idea was to automatically capture receipts for major purchases like hotel stay and, automatically add them into expense reports. That meant fewer receipts to manage (and save) during trips, and fewer items to enter into an expense report.
The second goal for integrated T&E management is policy enforcement. Companies want to be able to track employees’ travel spending and choices, such as if travelers are opting for a $700 flight when a comparable and lower cost option is available.
The idea here is that integrated travel and expense software can help companies boost compliance with company travel guidelines and confirm that compliant reservations are expensed at the same level.
On a single platform, a company can compare what is booked to what is actually expensed. But there’s more than one way to achieve integrated T&E. Opting for a single platform is not the only approach.
Integrated travel and expense software lags
The lure of an all-in-one approach is captivating, a fact anyone who has ever purchased a blender-food processor combo or a copy-scan-fax machine knows well. Why purchase multiple widgets when a single, consolidated option can accomplish so much?
But while the perks of all-in-one devices, apps, and platforms are clear, so too are the potential pitfalls. Often, features, usability, and functionality lag. What happens when the blender breaks but the food processor still works? Or, what if your combo device has a stellar blender but a subpar food processor? Or when the food processor just doesn’t work very well?
That’s the case when it comes to many all-in-one T&E platforms: They offer technology’s much-vaunted single platform to handle both travel planning and expense reports. But it comes at the expense of user experience.
Common pitfalls include:
- Best-in-class sacrificed for all-in-one. Any time two separate technology solutions are cobbled together into one, the relative efficiency of each can be diminished. With travel and expense solutions, travelers have many options for booking travel, but only one for getting reimbursed. This can mean travelers abandon corporate solutions for options that provide better usability, more content, and can leverage personal preferences better. This is known as leakage, and it leads to unexpected costs, not knowing employees’ locations (leading to duty of care challenges,) a loss of data, and the potential for decreased efficiency.
- Unreliable performance. Some purported automation systems do not function consistently as touted. Business travelers may find, for example, that receipts sometimes port into their expense report but may fail to get included at other times.
- A dated approach to technology. All-in-one integrated platforms can also suffer from failing to take advantage of existing technology that would allow for a more modernized, seamless approach to handling expenses. Some integrated T&E platforms were developed before the invention of the iPhone, which means, before it became commonplace to constantly have a computer with a camera in your pocket.
Winning travel and expense management
It’s easy to forget that when travel and expense were first paired 15 years ago, it was the first step beyond manual spreadsheet management. There were no smartphones, no optical character recognition (OCR), and receipts weren’t scanned — they were stapled to expense reports.
Now, business travelers can immediately take a photo of any receipt from the hotel folio to the airport latte. Thanks to the development of optical character recognition, we’re all basically walking around with a handheld scanner that can translate images into a machine-readable format.
OCR allows us to take a photo of a hotel folio and make it accessible as an itemized document. Sophisticated expense management solutions can use OCR technology to scan a receipt and itemize line item detail, such as room service and WiFi at a hotel or refueling and mileage charges from a rental car.
Today, there are even more ways of capturing that line item detail. Business travelers using corporate credit cards can take advantage of Level 3 credit card data processing.
Initially created to control and curb government spending, it includes precisely the line-item details needed for an expense report. Through Level 3 credit card data processing, expense item creation can be automated. So, when it comes time for an employee to create an expense report, all the items paid for with the credit card will already be represented.
Modern T&E requires best-in-class providers
Some work-related tasks are like chocolate and peanut butter — they just go better together. But that’s not the case universally. Look at your phone’s home screen as an example. You likely use one app to check the weather, another for the day’s headlines, and yet another for your calendar. It’s one phone, full of separate, specialized apps.
Separating tasks allows you to opt for the best software for each function; you can choose a software designed to handle the travel process, and another that manages expenses. That way, each experience is efficient and delightful, rather than hamstrung by a conjoined design.
The best approach to travel and expense software begins with understanding your company’s needs as well as the preferences and characteristics of your employees. A Gen Z employee base may demand a more sophisticated, tech-forward solution, for instance. And depending on where you travel, support for particular currencies and the swift ability to convert from one currency to another might be a priority.
For true, modern integration, skip the original integration approach of prioritizing a single platform. It made sense in the pre-smartphone and pre-Level 3 credit card days, but is no longer as relevant or necessary.
The best approach, and one that will win your staff’s appreciation, is to choose travel and expense software separately, prioritizing your needs in both spaces. You can then rely on both systems to connect to each other and create the seamless experience you want with the powerful technology you need.
Learn more about modern travel and expense management in our free eBook.