Expense Management: A Lesson for Colleges & Universities
Posted by Jessica Tatlow
When my sister was a varsity athlete in university she travelled a lot. I never considered how she paid for food and other expenses incurred on her travels at the time. The surprising answer is that the university handed each person a $50 bill for their weekend expenses. Yes, that’s right – cold, hard cash. This wasn’t in the dark ages of paper and pen – it was within the last ten years, well into the digital age. No receipts were submitted and no change was given. What a strange way to run expense management, right? But maybe that was easier than asking a bunch of teenagers to keep track of paper receipts, follow expense policies and submit claims in a timely manner.
Many businesses (who employ adults) still have similar policies for the smaller expense items, like per diem allowances for food. But as the saying goes, especially in markets with increasingly tight budgets and under intense public scrutiny, a penny saved is a penny earned – or in this case, one that could be put to better use in service of said athletes’ student success, for example, instead of supplementing the celebratory beer fund.
Expense management solutions are not a high profile technology, but expense management is, in fact, the second largest controllable cost for any business, including colleges and universities! Travelling researchers, instructors, recruiters and student delegates can have a big impact on an institution’s reputation, so you want to maximize the efficiency of their expenses so you can do more of it – and keep your road warriors happy!
Expense Management Research – Testing our hypothesis
We recently published research, conducted by Ruigrok | NetPanel, that revealed that North American travelers hand back billions to employers in unclaimed expenses every year – and that these unclaimed expenses can manifest as worrisome frustration, disengagement and dissatisfaction with employers. The main reasons for unclaimed expenses are familiar challenges:
- Opaque policies
- Complicated, time consuming processes
- Lost or forgotten receipts
- Low value claims
The Expense Management Problem - Conclusion
In an era of tightly controlled funding and costs for higher education institutions, with highly mandated transparency, many universities still rely on manual systems and outdated policies for travel expense management. The error-prone data entry necessary to submit paper expense claims creates backlogs and silos which can lead to the dreaded cash flow disruption.
Typical business challenges, from late and unforeseen expenses to lack of visibility and non-compliance, are common in university and college finance departments. Basically the problems boil down to poor usability of expense systems and understanding of policies and processes.
Wouldn’t it be great to be able to control cash flow, have transparency into expenses and budgets, automate compliance, and improve the timeliness of expense claims?