In an era where corporate efficiency and financial visibility are paramount, the latest insights from the Center’s fifth annual Expense Management Trends Survey reveal a growing disconnect that could hamper businesses nationwide. Despite a notable uptick in corporate card usage, with nearly half of the surveyed finance and accounting professionals reporting an increase, the adoption of expense management software remarkably lags, highlighted by a mere 2% uptick. This discrepancy underscores a critical need for integrated expense management solutions as businesses grapple with compliance and visibility challenges that stifle productivity and financial clarity.
As corporate America evolves, so does the complexity of its financial operations. The survey, gathering data from over 200 finance and accounting professionals, paints a vivid picture of the current landscape. While corporate card usage has seen a nearly 46% increase, signifying a shift towards more fluid spending practices, the stagnation in expense management software adoption poses significant hurdles. Not only does this gap exacerbate laborious month-end closes, but it also revives perennial pain points such as minimal user support and policy confusion—issues that year-over-year (YoY) resurface against a backdrop of a dynamically changing work environment and a resurgence in corporate travel.
The stark reality of these findings cannot be understated. Small and medium-sized enterprises (SMEs) find themselves at a crossroads, with increased corporate card usage not matched by a corresponding increase in software solutions that could streamline and safeguard financial processes. The data reveals that the use of expense management software has barely budged, lingering between 39-47% since 2021. This stagnation is set against a tapestry of challenges, including time-consuming expense reporting, a lack of clarity in expense policies, and the arduous task of credit card reconciliation. Alarmingly, the survey notes an uptick in the average number of days to close the books to 14 days, up from the previous year, signalling inefficiencies that could be mitigated with more robust software adoption.
The decentralized nature of today’s workforce, compounded by a resurgence in business travel, further amplifies the need for enhanced visibility and control over expenses. With forecasts predicting corporate travel to surpass pre-pandemic levels in 2024 and a significant portion of the workforce operating remotely, the opportunities for spending leakage are vast. The survey’s findings indicate a 30% year-over-year increase in corporate travel spending within the $250K-1M range, with 91% of respondents expecting travel spend to remain steady or increase. This surge in travel and the decentralized workforce underscores the imperative for comprehensive policies and tools to track and manage employee spending effectively.
Yet, the survey reveals a troubling disconnect between employee spending behaviours and the policies designed to govern them. Despite more off-platform bookings, only a third of respondents have tightened policies, pointing to policy confusion and compliance challenges. This disconnect is further evidenced by a decline in companies reporting a written, well-maintained policy, dropping 10% from two years ago.
In conclusion, the 2024 Expense Management Trends Survey serves as a clarion call for businesses to embrace integrated expense management solutions. The current trajectory, marked by increased corporate card usage but stunted software adoption, is unsustainable. As businesses navigate the complexities of a decentralized workforce and increased corporate travel, the need for comprehensive, software-driven expense management solutions has never been more critical. By addressing these challenges head-on, businesses can unlock greater productivity, ensure compliance, and pave the way for a more financially transparent future.
Written by: Supaporn Pholrach
