Travel and expense management has traditionally fallen into one of three categories.
1. Manager review and approval of expense reports, possibly in conjunction with audit rules that have been configured in an expense management system such as Concur or Oracle iExpense. These audit rules warn employees if they are exceeding price limits of various expense items such as hotel rooms, car rentals or meals.
2. The organization’s payables operation team performs expense report reviews. Resource constraints usually dictate that a percentage sampling of reports is conducted. Additionally, the organization processing expense reports may be generating BI-type static reports around single purpose topics such as budget vs. actual, regional transactions comparisons and vendor spend.
3. The third category covers periodic internal or third party audits, which typically involve a sampled subset of expense reports. Their purpose in doing this is more policy focused versus transaction focused. They can be a random percentage, a target list (i.e. new hires first 90 days or frequent travelers) or special conditions such as expense reports above a specified financial limit. These audits tend to be more detailed than those performed by the payables organization and may include examinations such as in-room movies expensed, car rental extras like child seats or satellite radio, airline upgrade fees paid at the airport, excessive tips, etc.
These are all excellent practices for expense management and we have found that all of our clients and prospective clients use one, two or all three of these categories in their own programs, but that doesn’t mean these management practices aren’t without flaws.
A common thread amongst all of these categories is the focus on one expense report and one transaction at a time. Unfortunately, this transactional focus does not provide the insight that an analysis across all facets of an expense report: across transactions, employees, and time, can provide.
Oversight’s Insights On Demand for travel and expense solution makes this multi-dimensional analysis possible. The key differentiator from traditional auditing approaches for T&E is that Oversight provides a centralized system to inspect 100% of our clients’ transactions versus a sampling, and in addition to just looking at one expense report at a time, Oversight’s analytics look for T&E risk across all expense reports and employees over an extended time horizon.
The benefits of Oversight’s automated compliance solution are:
- A significant reduction in compliance costs by over 50% while increasing audit coverage to 100%.
- Insight into spend patterns and trends.
- Identification of high risk merchant category codes.
- Identifying the approximate 7-10% of employees who commit the majority of fraud, waste and misuse through the discovery of patterns of behavior over multiple expense reports over time.
- Improved policy compliance by all employees through policy exception identification and subsequent communication in the form of policy reminders.
- A potential impact on total travel spend in the range of 2-5% based on client experiences.
- Our client’s experiences have found that just 0.2% saving in travel spend offered a 5 times ROI when implementing Oversight in addition to the FTE savings.
Oversight’s solution is not designed to replace the three traditional categories of travel and expense management, but rather to enhance these core activities by providing clients additional benefits and at a cost that was previously not possible.