Research uncovers $1 billion problem for Hong Kong companies

Inefficient T&E expense claim processes waste over $1 billion in employee time alone; billions more potentially wasted due to lack of visibility, errors and out-of-policy spend

Hong Kong, 8th June, 2012 – Concur (Nasdaq: CNQR), a leading provider of integrated travel and expense management solutions, announced eye-opening results from research commissioned to understand how local companies manage their employees’ expense and travel claims. According to the findings, employees of Hong Kong companies spend an inordinate amount of time – equal to about $1.2 billion annually – wrestling with travel and entertainment (T&E) expense claims. And that’s just one aspect of a costly T&E expense management problem for Hong Kong companies that includes out-of-policy travel booking, missing or lost receipts, inefficient processes and manual systems that provide little to no visibility or control over the billions spent each year on T&E expenses.

According to the research results found by Ipsos, 88% of the total sample uses excel or paper form for collating T&E claims. This suggests that automated solutions are still uncommon among Hong Kong companies. This means that most organizations not only spend far too much time manually processing T&E expense claims, but also have little to no visibility into the resulting spend, making it difficult to understand how their T&E budgets are being managed.

The research also found that the account payable staff in the Hong Kong companies stated that among the errors when processing T&E claims, 65% was due to no receipt. 67% of the staff agrees that the main cause for errors is the manual process which is prone to human error.

As for business travelers, it takes them 2.6 weeks to complete the whole claim process from filing to receiving payment. Corresponding to what the account payable staff have mentioned, missing receipt (44%) is the most often encountered difficulty. Missing receipts can lead to claim rejections, and 26% of these travelers experience such incidents.

Other key findings in the research:

• 80% of the Account Payable staff report errors when processing T&E claims.
• 10% of the Account Payable staff believe the main cause for errors in T&E claims is employees trying to claim for things they are not entitled to.
• In addition to the financial considerations and inconvenience, the major issue of encountering errors is the annoyance created between account department and claimants.
• A typical traveler takes 0.9 day to submit 3 claims, total 27 claim items a month. Key claim items include meals (81%), transportation (78%), accommodation (68%) and communication (67%).
• The travelers receipt issues arise from forgetting to take a receipt (52%), or having no receipt at all (50%).
• 56% of the travelers require approval for traveling and more than 25% require multiple approvals.

“Our research show that the current manual processes can cause frustration to both business travelers and the people who manage the expense claim process. It would seem wise for Hong Kong businesses to look for a more efficient approach to save the time and resources wasted in documenting, submitting and approving T&E expense claims,” said Cara Lai, Associate Director, Ipsos Hong Kong.

Mike Eberhard, EVP & General Manager, Asia Pacific at Concur Technologies comments, “In hard economic times and with cost-management a major focus for CFOs, travel and expense management is too often seen as a direct cost rather than a revenue enabler. Indeed, smart companies are arming their employees with fully-automated travel and expense management systems to drive down operating costs – and mining the resulting data – to find valuable cost savings normally hidden from view under manual processes.”

Concur provides a solution to eliminate frustration and time-consuming practices. Concur recommends Hong Kong businesses consider deploying a cloud-based T&E expense management solution in order to create efficiency and manage costs. A cloud-based solution provides flexibility with minimal upfront. With the addition of mobile capabilities, both travelers and approvers can utilize the service on the go.

Other benefits from automation of T&E management processes include:

• Encouraging the right behavior during business travel by enforcing company policies
• Expediting expense processing by reducing the time required to submit and approve reports
• Improving accuracy of eligible expenses
• Reducing the time needed to train employees to claim expenses
• Creating greater transparency in the claim process
• Significantly reducing human errors; and
• Streamlining the approval processes.

Note to readers:

The survey has a sample size of 202, with 51 staff members who have primary responsibility for administering the payment of travel and expense claims and 151 business travelers traveling at least once a month.

The estimated cost of $1.2 billion is calculated by multiplying the average time spent on submitting T&E claims per employee with the average staff salary and projecting it to all business travelers in Hong Kong based on the incidence of business travelers and number of companies in Hong Kong.