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travel payment reconciliation

Into the Light: Travel Payment Reconciliations

July 13, 2015
by WEX Travel

Doing their part to help control costs and ensure appropriate resource allocation, travel managers are feeling the pressure to provide C-level executives with actionable insights about their organization’s business travel expenses. That means their data has to provide clear details about employee spending—a challenging task when your travel expense management process fails to deliver the goods, and keeps everyone in the dark.

Research from the Global Business Travel Association found that corporate travel managers are struggling to accurately report their organizations’ travel spending, using up to 442,000 hours in staff time (or $22.7 million) per year to manually reconcile and clean travel data. In fact, 82% of study participants reported that they have to manage multiple data sources to answer questions from management about travel spending. In addition,

  • 73% say they have challenges reconciling differences in reports due to data formatting
  • 58% feel they spend too much time reconciling and cleaning what they do have to overcome inaccuracies
  • 64% do not trust that they have complete data to calculate the total cost of a trip

What’s more, leaders within the travel industry itself are contending with wrangling the data they need to effectively reconcile their expenses. In their white paper, Travel & the Cost of Getting Paid, PhoCusWright revealed that next to manual payment processing, invoice reconciliation is the biggest demand on travel firms’ staff resources.

The Sticking Points in Reconciliation

Effective reconciliation is critical to keeping a businesses’ employee travel spend aligned with the company goals. For travel companies, executives need to uphold profitable relationships with their suppliers, identify customer purchase trends, and more. Aside from getting an overall picture of your spending, reconciliation helps you identify any areas of overspending—on banking and credit card fees, for example. And you need to make sure money isn’t being fraudulently withdrawn from an account and that your financial institution hasn’t made any errors.
Yet there are multiple factors standing in the way of efficient reconciliation, including:

  • Overpayments due to combined payments or system errors
  • Underpayments due to unrecorded discounts, partial payments, or system errors
  • Lack of identifying numbers or other tracking information on invoices
  • Different forms of payments or data required by different customers and suppliers
  • Insufficient documentation entering the system
  • Legacy systems
  • Paper-based processes

The biggest challenge for corporate travel managers and travel firms alike may be inherent: a lack of internal control fueled by a manual process. Unfortunately, manual process can allow too many details to slip through the cracks and compromise data integrity. Expenses that aren’t captured or accounted for properly within the accounting or expense management system do nothing to help paint a picture of how resources are being used and potentially impacting the bottom line.

The Way to Better Reconciliations

In an effort to get reconciliations and their associated analytics under control, many organizations are implementing digital processes wherever they can. By taking advantage of electronic payments, particularly virtual payment cards that eliminate the need for plastic or paper in any stage in the game, they’re handing much of the number crunching over to technology and learning to manage by exception.

With a virtual payment method, individual transactions are given a unique “card” number, enabling easy and automatic matching and a streamlined payment flow. More information comes back into your system for reconciliation. And since companies set controls for spending in the first place, they can save millions of dollars annually by automating this process. On the back end, the digital process provides more accurate, higher-quality data that can be used to improve the surrounding reporting and accounting processes.

By adopting an electronic solution, travel managers and travel industry professionals alike can overcome their reconciliation challenges and enjoy a more streamlined workflow, higher quality system output, and access to insights that are sure to delight the C-suite—and shine the spotlight on their administrative success.

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