New Relief for Road Warriors
Forhealth Technologies Inc. understands efficiency. The medical device maker's new $600,000 hospital robot, the PARxD IV, accurately fills 300 syringes per hour -- a feat unmatched by man or machine. Too bad the Daytona Beach, Fla., company didn't have a similarly clever robot for its accounts payable department.
Instead, the 23-person company had relied on a single human being to process manually some 60 expense reports a month. First, she'd print out Excel spreadsheets that had been e-mailed to her from the company's traveling personnel. Then, she'd rekey each entry into the company's computer system, kicking back any reports that lacked the necessary managerial approval. Sometimes managers responded quickly. Sometimes they didn't, and what should have been an hours-long process became a days-long ordeal.
But late last year, ForHealth got the shot in the arm it needed -- a new Web-based expense-reporting system, OneMindConnect's ExpensAble. Now, not only do ForHealth's 15 business travelers get reimbursed more quickly -- in fewer than five days instead of more than a week -- but the firm's sole accountant has time for other, more important tasks. The entire system cost $3,500 to install and $500 in monthly service charges and has already paid for itself. Without it, says Spence Lloyd, chief financial officer, "we would have had to hire another person."
Keeping track of travel and entertainment expenses has long been one of the more onerous of executive chores. After all, who wants to sift through stacks of tiny, crumpled receipts, trying to remember what you had for breakfast in Omaha that morning three weeks ago? It's no wonder that many traveling executives regularly fall behind, creating untold headaches for accounting departments.
A growing number of Web-based expense-reporting systems -- including those created by Concur Technologies, Gelco Information Network, Extensity, and more than a half-dozen others -- promise to change all that. Such services allow business travelers to log on to their company's intranet from the road and record expenses as they go. Some systems go even further, automatically filling out expense reports each time a corporate credit card is swiped in a restaurant or hotel. Sure, it's convenient. But such systems can also boost the bottom line. With Web-based services, execs can file a report in just 18 minutes, compared with about 35 minutes manually, and the time and labor costs per report drop from $48 to $18, according to Aberdeen Group.
Who wants to sift through stacks of receipts, trying to recall what you had for breakfast in Omaha?
What's more, over time the electronic T&E reports create an increasingly rich database that can be mined to locate even more discounts. Sirsi Corp., a developer of library-management software based in Huntsville, Ala., with about 100 business travelers, implemented Concur Technologies' system in March. The company already is saving time and money, says corporate controller Barbara Duffey. But the real savings are yet to come, she insists. "We expect this system to allow us to negotiate better terms with hotels, car-rental agencies, and [airlines]," Duffey says. "We'll be able to look at how much we spent with each hotel branch, even down to a single location."
Electronic T&E reports also can help cut unnecessary spending by automatically flagging expenses that exceed company policy. On average, companies that adopt online systems reduce such so-called "maverick" purchases 31%, according to Aberdeen.
In general, the systems work like this: Workers file expense reports via the Internet straight to accounts payable. At the same time, the system automatically e-mails department managers that accounts payable has reports awaiting their online approval. Once approved, software extracts detailed data -- say, where the employees stayed, how much they spent at lunch -- and keeps a running companywide tally. After processing the report, the accounting department electronically transfers money to the travelers' bank accounts.
The final step: Employees send their paper receipts to accounting for filing. Alas, thanks to IRS rules, there's still no way around this one. But some services will allow you to scan paper receipts and store them on the Web or CD-ROMs. That's handy if you ever want to take a second look at your account manager's business trip to Grand Cayman.
Prices can vary greatly. But in general, if you have 100 employees who travel, expect to pay $500 to $1,200 a month. Add to that one-time installation and training fees of $5,000 to $100,000 (see table). Still, most users report that their investment pays for itself within 18 months. ForHealth Technologies, for its part, has already recouped its investment. And that's not all, says Lloyd. "Consider the intangibles," he says. "Clearly, we're saving time."
Online Expense-Reporting Software
A look at what's out there for small biz.
Fees: $12/user/month (min. $300) plus $1K-5K installation fee.
Notable: Easily integrates with Intuit QuickBooks.
Fees: Based on usage. Average fee is $7/expense report; no installation fee.
Notable: Can electronically move funds from your bank to your employees' accounts and credit card companies.
Fees: $5-$10/user/month plus $4K-20K installation fee.
Notable: Offers both hosted and licensed versions; boasts unusually robust data-mining capabilities.
Fees: $5/user/month plus $75K-100K installation fee.
Notable: Links with Extensity Travel Planner, which lets you book flights and hotels.
Fees: $5.50/user/month plus $700-1,400 installation fee.
Notable: Low price tag is offset by comparatively weak report-generating capabilities.
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