Tasked to save more in 2020? Direct your spend to where it matters most

It is the start of a new financial year once again. Business leaders face the rising pressure to be more strategic with the corporate budget, ensuring they get the most returns with minimal costs.

Many will agree with me that this is even more crucial now with a slowing global economy, a lot of uncertainty and a digital revolution that is pulling companies in opposite directions. While some are forced to cut costs for short-term survival, many also wish to invest more to innovate for long-term sustainability.

Adding to the corporate conundrum is the constant push for market growth with expansion overseas, resulting in more expenses – from increasing business travel to investing in new ventures.

Given the competing interests, how should finance leaders channel spend to where the business needs it most?

There is no easy way, but I believe that the quickest and most effective approach is to review expenses that can be streamlined.

A good place to start is T&E (Travel and Expense) expenditure, which on average comprises 10% to 12% of a company’s budget. In fact, according to Forrester Research, 40% of organisations do not have a unified T&E and invoice management strategy. This means time-consuming expense tracking procedures, incorrect claims and security breaches, and a lack of oversight on employees’ safety – adding to unnecessary costs and poor budgeting.

I regularly see companies implement a ‘Travel Freeze’ to cut cost. This is inevitably short term, not sustainable and quite often bypassed.

There is actually a huge potential for greater savings here!

To unlock those savings, organisations need an intelligent and integrated T&E Management system. And there are two good reasons why.

• First, it offers clear visibility on T&E spend, helping companies plan better. Savings gained can allow budget to be directed to top corporate priorities such as growth, business expansion, risk management and digital transformation.
• Second, an effective T&E strategy lightens workloads and saves costs through more efficient and productive work processes.

How to select the right T&E tool for you?

With so many options in the market, “shopping” for the right solution can be a complex and cumbersome process.  

You can simply begin by being clear of your company’s current and future T&E needs.

To aid in this process, my team has developed a guide detailing the six key attributes you should bear in mind as you evaluate if the tool in consideration is a right fit for your organisation.

Here’s a little teaser of what has been put together based on the accumulated experience of many experts in this field.

1. Visibility and Control over Spend
Get consolidated and real-time updates of your organisation’s spend for clearer planning

A lack of proper oversight on travel spend, including “off-grid spend” made directly with suppliers, often leads to incorrect expense claims. Finance teams also typically face an influx of claims towards the end of the year, as everyone rushes to meet the filing deadline.

These can mess up financial budgets and books. A suitable T&E tool will reduce the volatility in expense reports filed through reminders to employees, and automate the process to minimise human errors. A connected T&E ecosystem will also track out-of-system bookings and flag compliance issues.

2. Organisational Size and Expected Growth
International and regional expansion means your organisation needs greater support in T&E management

With more business travellers travelling overseas frequently these days, finance teams must understand all the intricacies of foreign policies to ensure compliance.

Look for a tool that is scalable to support your growth and expansion plans. The tool should ideally provide access to an international networks of app partners who offer solutions to boast greater savings. Those that help save on Value-added Tax (VAT) and mobile roaming, and provide specialist advice on immigration and tax rules are great partner app solutions to consider.

3. Employee Experience
Having an intuitive, easy-to-use system can make a world of difference

Companies typically spend 60% to 70% of their time manually getting consistent information analysis. Some even spend three to five months processing expense claims. This hampers their ability to make quick business decisions and could result in a cash crunch for employees waiting to be reimbursed.

Improve employee experience by speeding up reimbursement and making the expense filing process fuss free. A suitable tool will help anticipate, predict, and control spending, reducing the time finance teams spend monitoring their company’s budget.

4. Duty of Care
Organisations are responsible for the safety and well-being of their employees anywhere in the world

A recent survey of 7,850 business travellers from 19 global markets, including Singapore and Malaysia, found that 54% working at companies with a formal travel policy believe their safety is not a top priority. More than 9 in 10 of respondents added that they share their location while travelling for safety reasons 58% of the time.

A T&E solution with risk management features can help an organisation communicate with its employees during an emergency. It can easily locate employees based on data captured from expenses, itineraries, mobile check-ins and so on.

5. Security and Governance
Data security and privacy are critical for business functions

Data security and privacy are particularly critical for managing T&E. Such data provide insights into cash flow and employee location – potentially making them easy targets of crime.

When choosing a Software as a Service (SaaS) provider, carefully assess aspects such as scalability, reliability and geographic reach to ensure that your data is secure, and their services are reliable.

6. Value to Business
Gain more insights as well as returns from your investment

Apart from considering the budget for a T&E tool, companies should do a cost-benefit analysis to weigh its impact on their business. Consider how much time the tool saves on planning business travel and completing expense reports, the cost savings reaped through enhanced visibility and compliance, and the improvement of employee satisfaction.

Juggling key decisions as a business leader is always a challenge. I hope the guide will help you start on the right foot as you begin your exploratory journey – and eventually help you find a suitable T&E solution that will unlock savings and benefits you otherwise would not have access to.

The full version of our Evaluation Guide to Travel and Expense Management can be found here.