Why T&E Should Matter to CFOs (Part I of II)

A controller walks into the CFO’s office and says, “we can really impact our bottom line this year if we invest in managing our travel and entertainment (T&E) expenses more effectively.” Unfortunately, to many CFOs it might seem like the start of an accounting joke, but for many companies of all sizes this is a fact, and they just don’t realize it. Second only to payroll, T&E spend comprises the largest business expense. If that is not enough to get a CFO’s attention, here are a few other statistics that might help out on that front: according to a recent study published by the Global Business Travel Association (GBTA), 2015 Global Travel Price Outlook, travel spending reached $1.1 trillion USD in 2013 and is expected to advance by 6.9% and 8.6% in 2014 and 2015, respectively. And according to a 2014 Forrester Report, The Power Of Real-Time Insight: How Better Visibility, Data Analytics, And Reporting Can Optimize Your T&E Spend, which surveyed of 348 financial decision-makers around the world, T&E ranks as the second most difficult operating expense category to control.

The following realities based on the results of Certify’s Annual Expense Management Outlook: T&E Trends and Bookmarks for 2015 offer three more compelling reasons why CFOs need to give T&E expense management its due:

1. 59% of companies state their corporate compliance rate is 80% or less with T&E policies, indicating 20% of expenses submitted are in violation of policy.

• Over 15% of companies report a compliance rate of 50% or less


• 10% of companies report a compliance rate of 20% or less


• These violations can cost companies tens of thousands, if not tens of millions, of dollars right off the bottom line.

2. T&E expense management can be painful for those charged with the administration and management of T&E at your company. The following represents the distribution of the largest pain point across six issues impacting the productivity and morale of those involved in managing your company’s T&E expenses:

• Employees failure to submit expense reports on time: 39%


• The time it takes to reconcile, review, and approve reports: 38%


• Employees losing paper receipts/submitting without receipts: 33%


• Reconciling the data: 23%


• Errors on the report (incorrect codes, payments amounts): 23%


• Reviewing for policy violations: 20%

3. The average time from when an employee submits an expense report to when they receive reimbursement is eye-opening and impacts the morale of all those who travel:

• Over 7 days for 48% for companies leveraging a manual expense management


• Over 7 days for 37% for companies leveraging an automated expense management system


• Over 12 days for more than 15% for all companies, whether leveraging a manual or automated system

The good news for CFOs is that a pain reliever for their company’s T&E headaches does exist: the right expense management solution. Part II of Why T&E Should Matter to CFOs will focus on the results that companies are seeing when aligning a proper diet of processes and procedures with the right pain reliever (expense report management solution).