The business landscape in 2024 is anything but static; decentralized workforces, a resurgence in business travel and a dynamic macro environment create unique expense management challenges that no organization is immune to. To sustain growth and keep costs under control, effective expense management is paramount to business strategy. Here are some of the top trends shaping travel and expense management this year:
Credit Card Usage is Rising
More small to medium-sized enterprises are issuing corporate cards to their workforce. Recent data shows that a quarter of SMEs plan to increase their use of corporate cards this year. With a rise in the distribution of corporate cards, the adoption of corresponding expense management software lags behind, leaving employees and finance teams with the burden of time-consuming paper receipt submission and manual end-of-month reconciliation. As a result, productivity and the bottom line suffer setbacks. Many corporate cards are now tied to innovative software that enables real-time visibility into every dollar spent, removing headaches around manual expense reporting, and eliminating the need for employees to carry expense balances on their personal cards, especially in fields such as construction and professional services.
Decentralized Workforces = Decentralized Purchasing and Decision Making
The work landscape in 2024 remains predominantly decentralized. According to Gallup, 80% of remote-capable employees are working a hybrid or fully remote arrangement, with only 20% going into the office full time. Remote and hybrid workforces create more opportunities for spend leakage, as purchasing decisions are harder to track and control. These distributed workforces are reinforcing the need to equip remote and hybrid workers with corporate cards, empowering employees to individually manage their own expenses, as fewer employees have shared access to cards. Although many employees are returning to the office at least part time this year, hybrid work arrangements will continue to shape the next generation of travel and expense management. This shift is driving a demand for streamlined visibility and management of employee expenses as businesses look to reduce leakage.
New Year, Same Pain Points
Year in and year out, finance leaders report the mainstay challenges of historical expense management systems; time spent manually filling out expense reports, arduous onboarding processes that are intended to help end users understand and follow expense processes, and laborious credit card reconciliation. Luckily, emerging technologies such as AI, automation, and machine learning are making the entire expense process easier to manage. As software becomes more ‘intelligent’, the burden on both employees and CFOs is lessened, freeing up more time for productive, role-critical work. The days of the spreadsheet aren’t behind us just yet, but as software solutions become smarter and more easily integrated into a business’s existing processes, that may change sooner than we think.
Business Travel is Back
Corporate travel is expected to surpass pre-pandemic levels in 2024, driving a need for tighter management of travel expenses. While the last few years have been up and down for business travel, we are now settling into a new normal and business travel is taking a different shape, with a sharp increase in ‘bleisure’ travel. Bleisure is the rise of employees maximizing business travel by inserting personal leisure activities, which can make sorting out work vs. personal expenses more complex. As businesses seek tighter control over travel expenses, taking employee experience into account with corporate booking tools is an important consideration, and can be the difference between controlling spend and off-platform booking that ultimately perpetuates unintended leakage. With this in mind, finding the right balance between consumer grade experiences that employees have become accustomed to and financial control is key.
Policy and Compliance Are At The Forefront of Fiscal Hygiene
With scattered workforces and rising business travel, policy and compliance can no longer be an afterthought. According to recent survey data of over 200 finance and accounting leaders in the US, fewer companies report having a written, well-maintained policy (39%) than in previous years with that number decreasing 10% from two years ago. A third of respondents also reported their company having out of date expense policies, and 22% said their company lacked a written policy. Thankfully, as automation makes expense management more intelligent, there is no need for companies to manually update policies and disseminate all changes to employees. Companies can leverage automation to strengthen compliance by populating spend guardrails, applying universal, real-time policy to expenses, and automatically flagging out-of-policy spend, making it easier to keep policy top of mind.
Teams Are Tired of “Shelfware”
Businesses are weary of paying for tech they aren’t making full use of. According to research from Bain, customers expect to more than double their use of consumption-based software models in the next couple of years. Subscription-based models have long ruled the B2B software realm, but that may not be the case moving forward with the rise of options that can offer pricing flexibility for companies with tighter budgets. With more options for software, ROI for businesses takes precedent. Tools will become more configurable to a business’s unique processes, while ‘one-size-fits-all’ fixed price software bundles fall by the wayside.
The Bottom Line
As hybrid work proves to be a mainstay, inflation continues to increase, and the economy remains turbulent, a need for modern expense management solutions has become glaringly apparent. Businesses of all sizes are seeking tools that provide greater visibility, seamless onboarding, data-driven insights, and ultimately-tighter control over employee expenses without getting in the way of innovation. Flexibility, configurability, and integration will continue to remain key to any effective expense management system going forward. Businesses seek solutions that meet their unique needs, are cost-effective to deploy and maintain, and satisfy the expectations of today’s workforce and finance teams.
Naveen Singh is CEO and Cofounder of Center. He is passionate about next-generation technology rewriting the future of finance. He brings more than a decade of experience in financial services and has a deep understanding of how Center’s efforts can empower innovation across the spend management ecosystem. Naveen began his career at Concur, where he worked in product and business development. It’s also where he developed and cultivated his strong product orientation. He attended the University of San Diego and lives in Seattle.
Expense management and business travel stock image by Gorodenkoff/Shutterstock
