Automated expense management offers real advantages to employees and management, ranging from significant cost savings to companies on travel expense processing to reducing the time it takes for an employee to fill out a spreadsheet expense report or a paper report. The technology is also designed to detect fraud and to document approval processes, which appeals to financial managers focused on Sarbanes-Oxley (SOX) compliance.

The Aberdeen Group, a Boston Consulting firm, says that the software can cut the time it takes for an employee to complete a typical travel expense report from 57 minutes to 23 minutes. Some systems can automatically shift credit card charges to online expense reports, according to a report in The New York Times.

Other companies in the industry, like SamePage Solutions, offer services to small and mid-sized businesses in the form of on-demand software, Businesswire.com reports. SamePage says that their product, ExpenseWire, allows administrators to build and enforce spending rules and speed up the reimbursement process.

Identifying fraud is another major reason business invests in travel expense management, according to the Times report. American Express, Gelco, Concur and other major providers all provide "variance reports" so that managers can see if there is any difference between the booking price for a trip and what the employee charged. Managers can also confirm that expenses comply with company policy and that employees use preferred suppliers or carriers.

An American Express survey found that the most-abused expense category was restaurants, the Times reported. "This window of opportunity to cement ties with clients is often where the most abuse occurs – embellishing, hiding or falsifying reimbursable expenditures," the survey said.

But "for small businesses and small entrepreneurs across America, restaurants are their conference rooms," said Lee Culpepper, senior vice president of the National Restaurant Association, wsj.com reports. Business lunch numbers are up with the improving economy, and bills currently in the House and Senate would increase the deductible for business meals and entertainment to 80 percent from 50 percent, according to a report on wsj.com.

Other areas where travelers frequently inflate the numbers are phone bills, taxi fares and tips, because companies will reimburse below a certain minimum without requiring a paper receipt, the Amex survey says. Mileage charges remain a frequent target in audits of state and local governments.

Rajeev Singh, Concur's president and chief operating officer, tells stories of glaring abuse, as noted in the Times report, including "the employee who buys a big flat-screen TV, supposedly to hold conferences in his home . . . or a manager who tries to lay off the costs of his daughter's wedding by inviting business clients to the marriage."