©2000CorporateExecutiveBoard1-21LGMWORKINGCOUNCILFORCHIEFFINANCIALOFFICERSProjectSupportDeskNovember2000AUTOMATINGTRAVELANDENTERTAINMENTEXPENSEREPORTINGCONTENTSTHEOCCASIONFORINQUIRY(Page1)MEETINGTHECHALLENGE(Page2)T&EExpenseReportingBestPractices(Page2)T&EExpenseReportingBenchmarks(Page2)T&EExpenseReportingSoftware(Page5)PreparingfortheselectionandimplementationofautomatedT&ESolutions(Page5)DeterminingaPlatform(Page5)SoftwareSolutions(Page7)COMPANYPRACTICES(Page10)BIBLIOGRAPHY(Page18)ExecutiveSummaryTravelandentertainment(T&E)isasignificantcostformanycompanies.Infact,forsomecompanies,T&Eexpensescanaccountfor10to30percentofindirectoperatingexpenses.AccordingtoAmericanExpressCorporateServices,U.S.businessescollectivelyspentover$175billioninT&Ereimbursementsin1998.Mostbusinessesareapproachingthecost-containmentchallengeusingfourbasicstrategies:enforcingtravelpolicies,negotiatingbettertravelprices,implementingmoreefficientpaymentmethodsandreengineeringthereportingprocess.T&Eautomationdirectlytargetsthelatter,butautomationcanbebeneficialtoallareas.WorkingCouncilresearchindicatesthatthecostofprocessinganexpensereportrangesfromlessthan$10perreporttomorethan$100.Onaverage,itcosts$25toprocessoneexpensereportfromcreationthroughreimbursement,withcompaniesprocessinganaverageof20,000reimbursementsper$1billioninrevenue.AccordingtotheHackettGroup,companiespayeachT&Eprocessormorethan$40,373peryearonaverage.Also,theMetaGroupestimatesthataccountspayabledepartmentsspend40percentoftheirtimehandlingtravelexpenseforms.Butbyautomatingboththecollectionandapprovalprocesses,companiescanreducethe$25toaslittleas$1.75perexpensereport.AccordingtoVISA’sT&EBestPracticesManagementGuide,travelersincompaniesthatimplementautomatedexpensereportingsolutionsspendanaverageof33percentlesstimepreparingexpensereportsthantravelersincompanieswithoutautomatedsystems.WithIRSrulingsonT&Eexpensereporting,allbarrierstoautomatingT&Eprocedureshavebeenremoved.InOctober1995,theIRSruledthatbusinessesnolongerneedtoprovidereceiptsforbusinesstravelandentertainmentexpensesunder$75,althoughanexpensereportordiarymustbemaintainedfordocumentationpurposes.InMarch1997,theIRSissuedProcedure97-22,statingthatproperlywarehousedelectronicdataissufficientdocumentation.01020304050LessPaperworkBetterInformationonTravelReducedClericalTimeLowerCostsofTravelServicesFewerErrorsMadeBenefitsfromT&EAutomationPercentageAccordingtoaRunzheimerInternationalsurvey,lesspaperworkandbetterinformationontravel(tonegotiatepriceswithvendors)werethetopbenefitsofautomatingtravelandentertainmentexpensereporting.AUTOMATINGTRAVELANDENTERTAINMENTEXPENSEREPORTINGPAGE1NOVEMBER2000©2000CorporateExecutiveBoard1-21LGMI.THEOCCASIONFORINQUIRYWorkingCouncilresearchindicatesthatcompaniesareimplementingautomatedtravelandexpenseprogramsforthefollowingreasons:1�T&Eexpensereportcostscanbereducedtoaslittleas$1.75perexpensereport,accordingtotheHackettGroup.AmericanExpressbelievesthisnumberis$2;IBMexpectstoreach$4perreport;Libbey-OwensFordreached$1.29;EDSreduceditto$2.50;andJohnsonandJohnsonreachedalowof$2.�InexpensiveportablePCsandubiquitouse-mailismakingiteasiertocollectanddistributedataontheroad.�Onlinebookingpracticesattravelagenciesandcreditcarddatadownloadsaremakingiteasiertoautomatethetravelprocessfrompre-expensetopost-expense.�AnIntranetoffersthebenefitsofclient/serv...
