The strategic role of Travel Expense Management in the company
Jun 20, 2014 | Expense management
At the moment, many medium and large companies have passed through a serious process of adjustments to survive the crisis. In general, reductions in the workforce babe been prevalent, but there is still a great potential for savings in a good transformation in the functions of purchasing and expense control in the company.
Some companies have contracted the services of a consultancy to achieve optimization in their costs, and in that way, achieve a competitive advantage, and in all cases, the improvement has a necessary prior step: process visibility.
Company expenses: Management of travel expenses
To be able to improve, it is necessary to be able to measure and monitor the different factors influencing in each of phase of the different processes.
The management of employee expenses is principally a responsibility of the Accounts Payable department of the company, as it is the department where the accounting and registering of the activity generated related to this subject.
As you can see in this video, the process related to the employee expense notes can be very different depending on if we are looking at a department anchored to a traditional model or one that is up-to-date with new technologies and can count on an intelligent management model.
Having an adequate travel expense management solution can greatly improve the performance of the Accounts Payable department. But from the point of view of competitive improvement that we are discussing, an automated application will provide cost analysis and savings optimization capabilities that directly impact the company's bottom line.
Travel expense management: 3 key points
Trip Expenses
This is one of the tasks where there is the most room for savings in AP management in large companies. There is a large amount of cross-referenced information that must be checked and verified. Documentation and receipts must be assigned to each expense incurred. There is downtime between authorizations, checks, documentation collection, accounting, etc. Automation allows you to establish a workflow and a way of handling each point in the process according to set parameters. And since everything is recorded with all kinds of related data, it allows you to improve the parameterization of the process as inefficiencies are detected. Subjectivity is eliminated, tasks are resolved in real time regardless of the location of each actor in the process, and many periods of time are transformed into moments.
Purchase Effectively
It will often be important to analyze which employees are less "austere" in their business travel, and there are many other variables in expense policies that must be considered. Automating employee expenses will allow the use of analysis tools, making it possible to objectively compare one employee with another. It is essential to be able to take advantage of the relevant information generated in the process and in a format that facilitates export and representation.
Audits
The ability to activate alerts for potential fraud in employee travel expenses and ensuring accounts are in good order for external audits are two good reasons to turn to automation. But we reiterate that the ability to measure and "see" what is happening with these items in the company is a key part of the game because it will allow you to apply the business intelligence that is so necessary in future business management. From the conclusions that AP staff draw from the data, based on frequent internal audits, the Purchasing department will obtain the guidelines that should guide its negotiations with travel agencies and suppliers, or the heads of different departments will be able to evaluate the performance of their staff's commercial activities in order to optimize their actions.
