Organisations of all sizes are now trying to produce more, with fewer resources at their disposal than ever before. Unfortunately, many small and medium enterprises have already slashed as much as they can, and now are left with little to cut that will not, in some way, affect revenue generation.

For these organisations, it may be time to turn focus away form strict budget cutting per se, and pay more attention to what can be streamlined and made more efficient. One area prime for savings through efficiency is managing employees' travel and entertainment (T&E) expenses.

The manual, spreadsheet based way
Many organisations often gloss over this irritating part of the business when searching for savings. One reason is that, while a manual expense claim process is definitely a protracted hassle, it is often assumed that a spreadsheet-based system is always a cheaper option than automation for managing T&E spend.

While a manual expense claim process appears to be cheap on paper, the actual cost associated with lost productivity, additional processing support, errors and potential fraud can be overwhelming. When considering whether to implement an automated T&E management solution or stick with the spreadsheet, organisations often fail to properly weigh the accumulative, and largely hidden, cost of keeping the status quo.

The perils of manual processing
In the best case, we would be comparing the primary and associated costs of just operating manual and automated T&E solutions. Before we can do that, however, we need to look at how a manual system drains excess funds outside its operation. These types of losses come from either overpayments (fraud, fudged numbers, entry errors, late fees) or missed opportunities for realising savings.

Cumbersome, manual systems often encourage delayed expense claims. This leads to receipts becoming worn or illegible, mileage overestimated and claims on credit card interest being submitted. Along with overpayments, bookkeeping suffers when claims cross internal or external reporting cycles, which can be a major source of concern. Also, finding best value suppliers and reining in excess spenders with a manual system is often not done.

The hidden cost of a manual expense system
The amount of time a business spends on collecting, approving, reconciling, auditing and paying T&E expense claims quickly add up. For road warriors, the amount of time lost organising and submitting expenses that could otherwise be used selling or making contacts can be sobering. For the less frequent traveller, constant questions of what is in policy and how something should be submitted are often followed by some sort of mistake in their expense claim anyway. Every hour organising expenses is an hour wasted.

For the financial person, the amount of time spent handling a single monthly claim can easily take an hour or more when using a spreadsheet, organising relevant attachments and trying to read wrinkled receipts.

For example, if a business has 25 regular travellers and 10 infrequent ones, the amount of time just processing monthly claims turns out to be a better part of one employee's total working week. When you add the culminated time your travellers spend preparing those claims, the total lost productivity and expense of the organisation can easily exceed that of a single new employee.

Cutting and controlling costs with automation
Expense management will always cost something; the trick is to reduce the process' total cost as much as possible - whether it's found in additional personnel, over payments, lost productivity or software expenses. Reducing total cost is best done by streamlining and automating the process through efficiencies that eliminate the opportunity for fraud and errors to become an issue.

Automated expense claim solutions, particularly those that follow a Software-as-a-Service (SaaS) model, provide an easy-to-use, automated process that drastically reduces processing time and drives down cost. They do this by:

• Allowing employees to accurately claim expenses closer to the point of payment
• Tying claims to relevant parts of credit card data while preserving privacy if the cards are personal
• Being subscription based with full technical support
• Providing domestic and international expense and tax expertise
• Distilling data to identify how money is spent and where savings can be found

• Increased policy compliance by over 30%
• Reduced expense claim processing costs by 80%
• Increased T&E spend visibility by over 58%
• Significantly decreased processing, approval and reimbursement times