Easing expenses: Once a painstaking process for road warriors, expense reporting has now been simplified to just a few mouse clicks. (Information Technology).

No doubt, the economic slump is dragging down business travel. Companies are carefully pruning their discretionary expenditures on airlines, hotels and car rentals. But this cut in travel spending is positive news for providers of travel and entertainment process software. Increasingly, more businesses are opting to re-engineer their expense reporting processes to reduce their overall travel spending.

"On average, we can shave 5 to 15% off the bottom line in travel for companies that automate with our software," says Scott Anderson, president and CEO of Necho Systems Corp. of Mississauga, Ont., a supplier of travel and entertainment (T&E) software. "It generally costs anywhere from $25 to $35 to manually process a travel expense claim. We can bring that cost down by more than 50% to about $10 to $12 a claim."

T&E systems can save time for the harassed traveller and management professional alike. A recent Visa International study found that employees who use expense reporting software instead of paper-based forms spend as much as one-third less time filling Out reports, helping businesses achieve major savings, even after the initial capital outlay. The new breed of software gives businesses greater control over how travel dollars are spent, ensuring greater compliance with travel policies. As well, they provide the leverage companies need to strike better deals with travel vendors.

The programs -- and there's about a dozen or so T&E packages on the market today -- let employees enter expenses quickly and easily using their personal computers or personal digital assistants (PDAs) such as Palm Pilots. Workers can fill out their forms during so-called downtime while waiting in airport terminals or from the their hotel rooms. The software automatically categorizes the sundry items by fund. Approvals are streamlined because managers and accountants can access reports in one place without having to sift through illegible items or messy receipts, which now only need to be stored by accounting.

For the most part, corporations still depend on makeshift Microsoft Excel spreadsheets, legacy systems or outdated paper-based reporting. The roadblocks to automating T&E are the perceived costs, lack of equipment and hi-tech expertise. But unless there's a very limited number of employees, these assumed barriers could easily be surmounted.

Necho Systems Corp.'s Navigator-hosted programs, for example, reside on the software developers' servers and networks. Customers pay a per-user par-month fee that's about $10 a month. About half of its more than 100 customers go with the hosting model. The remainder license the software, which is installed and maintained in-house at about $100 per user. In most cases, the return on investment is anywhere from three to six months.

"The application service provider (ASP) model makes it more amenable for small firms with 25 to several hundred users who utilize T&E software," says Anderson. As with other software programs from ASPs, employees can automate their T&E reports via a secure Web connection. The ubiquity of the Internet is making it feasible for smaller companies to "rent" and run such enterprise resource planning (ERP) applications remotely. Web-hosting can simplify life because it means not having to buy extra computers, storage systems and networking equipment on which the ASP software runs, or hire experts to install and maintain the whole thing.

T&E systems can be deployed over LANs, WANs, intranets and wireless networks. The most robust networks can support tens of thousands of users. Besides Necho Systems, key T&E software vendors include Captura of Kirkland, Wash., Concur Technologies Inc. of Redmond, Wash., and Extensity Inc. of Emeryville, Calif.

It's still the early days for adoption of automated travel and expense reporting; however, more companies are going online as the benefits become more evident. "The market is beyond the early adopter stage. The products have been around for three or four years and have worked successfully in corporate environments. There are some very strong testimonials out there," adds Anderson. He anticipates T&E systems to gain favour in the same fashion as did automated payroll systems. In the early 1980s, company payroll was mainly manual. By the end of that decade, however, virtually everyone automated their payroll functions because of the time and cost benefits.

For financial decision-makers, one compelling argument for the specialized software is that it helps companies reconcile their billings in a more timely fashion. Corporations can lose millions of dollars each year in late payment fees when employees don't file reports on time.

For financial decision-makers, one compelling argument for the specialized software is that it helps companies reconcile their billings in a more timely fashion. Corporations can lose millions of dollars each year in late payment fees when employees don't file reports on time.

Management consultants, for one, could lose billable expenses when employees file after a project is ended or a client's account is closed. T&E programs allow employees to file immediately because the tasks are automated, so they're less inclined to wait until the last moment. As well, most can simply charge on their American Express, Diner's Club and Visa cards. The expense information can be downloaded instantaneously into T&E programs. Instead of a typical 30-day accounting wait, data can flow in real time -- if so desired.

Web expenses are usually filed daily. Credit-card expenses can be paid to employees as soon as reports are approved. Faster turnaround improves overseas expense reporting as well. Employees often estimate the currency exchange rates or the amount of Value Added Tax (VAT) on their foreign trips. T&E software provides the correct rate for each day, taking out the guesswork that could cost companies big dollars. The charges on cumbersome VAT alone can go a long way in paying for the software when one considers that 17.5% of travel expenses in taxes can be recovered in the United Kingdom and 19.6% in France.

The pre-populated fields in T&E systems also let companies mine data for greater negotiating power. Users can slice and dice the reports to see how travel dollars are spent on every airline, hotel, car rental and other sundry carriers and suppliers. Armed with the data, even small business can get better price discounts as telcos and airlines aggressively fight to maintain market share.

With the workforce becoming increasingly mobile, T&E systems vendors are forging deeper into the wireless arena. Users of some software programs can now access their expense reporting software on the fly through their PDAs, and similar interfaces are being linked for cellphones and other wireless units.

Andrew Tausz is a Toronto-based freelance writer.