Why expense approval systems need to adapt to a hybrid future
Thanks to Travolution for posting our thoughts
Gavin Smith, director of Element, says traditional traditional expense management systems don’t cut it in the new post-COVID reality
Before COVID, approval for employees to travel was based on a person asking to spend company money on a flight, hotel, rail, or rental car. The employee booked via a travel management company or other travel service provider. Approval was growing as businesses sought to control how their employees spent their money.
As the lines blur across commute or business trip and the stationary cupboard is not available, it is time to recognise that using a corporate booking tool as your approval tool is no longer going to work for your business or your employees. There is little regard given to sales reps who live in the city they sell in. I have been one of these sales reps for most of my life, working mostly in London but occasionally needing to travel to other parts of the UK where I use my car or jump on a train.
I could go into London, have four meetings in a day, no need for approval as I used my travel card, which is paid for by me with no need to get formal approval for this. Why would I need to? I did not need an air ticket or a hotel.
Is trip approval via online booking tools fit for purpose?
Employees spend company money in many ways such as travel, entertainment, and other non-travel related expenses. Using an online booking tool (OBT) to approve travel or other company spend will not continue to work in the change that COVID has forced on us. The OBT only allows approval to spend company money on air, hotel, train, or rental car.
Companies examine all their costs, including travel and expenses spend and the approval of it. It is likely that large companies already have a process in place, but small and medium size do not. This is where a solution that uses expense software that includes travel and entertainment and non-travel and entertainment purchase requests is the answer.
Approval of all company spend should sit in one place, with real-time approval and visibility of what is going on and people in finance should be communicating with those who look after non-travel and entertainment spend. As we move towards hybrid working companies should be looking at their approval processes and the software used, as it should be changed.
Developments in software to manage the new way of working.
SME businesses need to be looking at how they can move away from Excel and paper-based expense processes, with people not being in an office. It will never be a great employee experience now having to pop down to the post office to send off expenses. Business expenses and costs continue to be a focus for finance teams.
Making sure you have a real time view of employee expenses and travel costs is going to be key. Waiting to see what comes in versus the budget is not the way finance teams want to work. They want to visibility to real time costs incurred before they are sent thought via the expense process.
Expense software companies are responding to the new mix of home and office or a move to working from home. They are now supplying features and functionality that allow the purchase of non-travel and expense items. As people are not in the office, the stationary cupboard is not something they can use, so keeping travel and expense separate from general procurement is key.
Even if the employee is using a corporate card, there will be different suppliers and approval for this expenditure. Enhancements in software provide a central platform where employees can request authority to travel, entertainment, and most importantly, purchase things that they normally get from the stationary cupboard.
We have moved to a hybrid working environment and companies should be looking at their processes and policy around employee spending and recognising that their existing management systems just do not cut it in a post-COVID world.