Why Expense Reporting at U.S. Companies Is Still A Mess
Skift Take
Business travelers don’t view filing reports for expense reimbursement as an enjoyable process, so much so that more than one-third of U.S. finance professionals aren’t submitting their reports on-time.
Adding more bad news, 20% of expense reports submitted by employees are in violations of their companies’ travel expense policies, such as submitting expenses for personal doctors appointments and bottle services.
Certify, an expense solutions provider, found these results and more from its annual survey for which it polled 434 U.S.-based finance professionals from the same number of companies about their travel expenses reporting processes and habits. None of the respondents are Certify clients and data was collected from December 15, 2014 to January 5, 2015.
Just shy of one-third of respondents (32%) say they use Excel/Spreadsheets to manually complete expense reporting and close by are the 37% who said they use some kind of web-based solution, including Certify, Concur and IBM.
About 43% of the employees surveyed said their companies use a manual system for expense reporting, such as Excel or other kinds of spreadsheets, pen and paper, or another homegrown method. Small businesses — those with less than 100 employees per the survey’s definition — are seeing the largest shift in expense management processes as 47% of small businesses indicated that they used Excel versus 67% last year, though this is still the largest percentage of companies using manual systems.
For companies using cloud-based or web-based systems, seeing a return on investment from the software in 7-12 months overall had the highest percentage (31%), and 25% saw a return on investment within six months of first using the software.
Roughly 78% of companies indicate having an expense policy but 65% of those companies are manually reviewing expenses for policy violations. On the whole most employees who said they were reimbursed within four to seven days after submitting their reports make up the largest percentage of respondents for the question regarding average time it takes from expenses being submitted to reimbursement.
“In many cases the company will maintain a reimbursement schedule which is either semi-monthly or based upon the payroll cycle,” said Bob Neveu, Certify’s CEO. “So while the expense report was submitted on-time and maybe even approved the same day, it may not be reimbursed until, say, the following Friday at payroll. This means the time from employee submission to reimbursement may be longer than in a manual process.”
Rocketrip’s CEO Dan Ruch is also aware of employees’ displeasure with expense reporting and came up with an algorithm he says saves companies a lot of cash.
“At the heart of Rocketrip’s intellectual property is a sophisticated algorithm that predicts what an employee would have spent without any motivation to save,” said Ruch. “We do not disclose the exact algorithm, but real-time travel data and our customers’ travel policy are two of the inputs. An average customer on the Rocketrip platform saves about 30% off existing travel spend.”
About 37% of respondents work at large enterprises (500 or more employees), 35% work at mid-sized businesses (101-500 employees) and 28% work at small businesses (less than 100 employees).