Businesses of all sizes spent more on travel in 2013 compared to 2012, according to a new study by cloud-based travel and expense management software provider Certify. The survey, which included polling of hundreds of finance executives and business travelers at organizations across North America, indicates that business travel is on the rise.
A majority of respondents across all company sizes (58%), spent more on travel in 2013 compared with 2012. In 2014, nearly half (49%) of all respondents say they will spend slightly more on travel, while 30% say they will spend the same.
“If business travel is a barometer of the economy, these results are positive, showing that companies are loosening the reins on operational expenses,” says Robert Neveu, CEO of Certify. “Most surprising was the level of investment at SMB companies, in which one third of small companies are spending more than $50,000 annually on T&E, while 41% of midsize companies are spending $500,000 and up. Despite the advent of widespread availability of remote collaboration and conferencing tools, companies still value face time when it comes to doing business.”
Spending trends by company size
- A majority of companies spent more on travel in 2013 versus 2012, at 55%, 52% and 70% respectively across small, midsize and enterprise companies.
- In 2014, the trend is similar with 64% of midsize and 63% of large companies reporting they will spend more on T&E compared with 2013; meanwhile, 46% of small businesses said they will spend the same amount, although 42% said they will spend more.
- Most small businesses, (54 percent), spend less than $50,000 annually on T&E, while 33% spend between $50,000 to $500,000 annually.
- In midsized businesses, spending was divided, with 35% spending $50,000 up to $500,000, 17% spending in the $500,000 to $1,000,000 range, and 24% spending $1,000,000 to $5,000,000.
- More than half (52%) of large enterprises spent more than $5 million annually on T&E.
Advice from the Pros:
"The cost for hotels and flights add up, particularly when employees are left to their own judgment in procuring them. But what’s under even greater scrutiny is the resulting chain of paperwork and approval requirements that drain operational resources productivity. Automated solutions address both of these issues, enabling companies to aggregate spend to achieve greater value from providers and eliminate time spent processing expense reports."
-- Ted Pastva, VP of Finance, Seamless
The survey also looked at processes and pain points behind travel management.
- Travel booking methods: While 80% of small businesses use travel websites for booking travel, midsize and large enterprises used a mix of methods including travel agencies, websites and software.
- Travel management pain points: Employees failing to submit reports on time was the top pain point for all respondents (46%) followed by employees losing receipts, length of time to approve reports and reviewing for policy violations. The top pressure for improving T&E management processes was cost reduction (48%) followed by improving visibility into spend (35%) and the frequency of noncompliant expenses (27%)
- Areas for improvement: The expense report creation and approval process was the top area participants noted for improvement (36%) followed by travel booking (21%), systems integration (20%), and mobility (19%).
- Expense management tools: A majority of all respondents are using web-based systems for expense management (43%), followed by spreadsheets (29%) and accounting or ERP packages (18%).
(Full survey results available online here)