When designing the Travel Expense Reporting process, it is important to consider the proper balance of business controls, potential fraud risks, and the effort required to both process expense reports and for travelers and their managers to submit them.  When it comes to process improvement, the one thing consistently better than automation is the elimination, and this is certainly true for receipt requirements.  It is a major effort for travelers to collect and submit receipts, for managers to review them, and for processors to review and then file them just in case the auditors want to take a look.  With compensating controls in place, many companies are deciding that receipts are often no longer required.

A recent Peercast featured a $7B global manufacturing company that makes products in 14 countries and sells them in 70 countries around the world.   Their Travel Expense process is administered regionally, with U.S. and Canada managed by the North America Service Center.   Here are highlights from their project timeline:

• In 2004, they moved from Excel expense reports to the SAP TRIP system, while keeping the requirement for receipts of $25 or higher to be faxed or mailed.  Receipts were scanned, reviewed, and attached using SAP’s workflow.
• In 2011, they raised the receipt requirement to $75 for the U.S. with other countries set based on local regulations.  They also allowed employees to scan or fax receipts, and they eliminated the collection of physical receipts.  Many expenses are pre-populated to the expense report from an automatic feed from the card provider, which significantly reduces the traveler’s effort to complete their expense report.
• In 2013, they moved receipt processing from North America to an offshore global processing center. 

For our feature company, raising the receipt limit dramatically reduced the number of receipts that were required, saving significant time for the traveler, and their managers, and for the team processing completed expense reports. The company is now considering eliminating the receipt requirement entirely for non-hotel expenses made on the company credit card.

Based on the supporting iPoll¹, 33% of reporting companies set the limit to the highest possible amount and another 11% have recently increased the limit or are considering doing so.  A surprising 56% of the companies have not recently considered making any changes to their receipt requirements.  While some of this 56% may already have high limits, the more likely scenario is that the current limit is $25 or less (with many who require 100% receipt compliance).

Answers to the iPolling follow-up question, “What is the status of allowing employees to submit receipts using mobile devices?” were interesting, with no companies deciding against it, and 48% of the companies have already implemented it.  Here are the details:

Comments from iPolling participants illustrate the full range of receipt requirements:

·         We require employees to submit receipts for all expenses; however, we do not pursue missing receipts if the amounts are small (e.g. for tolls).

·         We raised receipt limits from $10 to $25 when the Corporate Credit Card is used, and, if not used, a receipt is required. This helped drive credit card compliance to 94.4%.

·         We require receipts to be provided for all out-of-pocket expenses over $25 and for hotel and business meals on the corporate travel card.

·         We require receipts for every expense type, with the exception of meals, tips, and parking/tolls.  Receipts are required only if the expense is equal or greater than $75. If a receipt is missing, we have a form that their manager is to approve.

·         We follow the IRS rule that credit card transactions require receipts for anything $75 and over. Currently, we require receipts for any cash out-of-pocket items $25 and over but are considering changing this to require all cash receipts.

·         For our U.S. operation, we use the $75 IRS limit.   We are in the process of implementing the SAP T&E system for global expense reporting and are currently evaluating its capability to capture receipts from handheld devices.

Are employees allowed to submit receipts using a mobile device?  How recently have you reviewed your receipt requirement thresholds?  Are you considering eliminating all receipts for travel expenses that are charged directly to a Company credit card?

Who are your peers and how are you collaborating with them?

“Peercasts^TM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer Mail^TM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

¹ “iPolling” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer Mail^TM, members can easily communicate at any time with others who participated in the iPoll.