Controlling Travel Expenses with a Sound Travel and Expense Process

When your employees are sharply focused on lead generation and finally closing that deal halfway across the world, the last thing that should be on their minds is a cumbersome travel and expense management process. A strong T&E policy relishes the benefits of automated software for faster, more accurate transactions while taking human error out of the equation.

Far too often business managers trust their habitual travel management processes. Only to run into inaccurate travel expense reports, non-adherence, and potential fraud at the end of the month. Developing a sound travel and expense management policy negates a significant portion of these issues. It also requires an intimate knowledge of the expense management process – which we will address in finer detail in this post.

Breaking Down Travel and Expense Management

Business travel marks one of the most complicated types of expenses for any company. Come tax season, finance departments scramble to compile and collect these expenses for tax deduction purposes.

Travel and expense management is a systematic approach to collecting, analyzing, and tracking employee travel expenses pertinent to any corporate trip. Corporate travel and expense management has one goal – to collect, document, and write off travel-related costs for tax deduction purposes.

And, unless you have an actionable T&E management plan, your expense management process is destined for a series of avoidable challenges. Travel and expense management further aims to standardize and control the entire travel and expense process, driving cost savings and efficiency for the organization.

>> Related: 71% of CFOs Say T&E Management Absorbs Too Much Time <<

Why T&E Management Can Be Challenging

As with any business process, travel and expense management is not without its own set challenges. 

Take implementation, for instance. Limited access to funds and a general lack of support from management can and may hinder the successful implementation of a digitized travel expense management program.

Where sensitive financial information and personal data is involved, a high security risk becomes a chief concern for business managers, forcing them to rethink their T&E process. Guaranteeing the security of employee data is a priority for any organization that wants to avoid falling victim to costly security risks.

In order to overcome these challenges, organizations need to focus on migrating from antiquated, manual processes, tighten their cybersecurity posture, and gain clarity on employee spending.

Outdated and cumbersome travel and expense management systems often result in a poor user experience. Shifting from plastic credit cards to virtual cards assigned to employees in your online booking platform of choice, for example, reduces payment and reconciliation issues for everyone involved.

The Travel and Expense Process (At a Glance)

In a business setting, managing travel and expense processes can often be riddled with complicated yet time-consuming processes, from the initial travel approval to reimbursement. Organizing your travel and expense process calls for a clear and coordinated approach as follows:

Travel Request Submission and Approval

Employees typically submit travel requests through an online platform or directly to their managers in paper format. These requests are then evaluated in comparison with the company’s travel policy, which outlines the specific guidelines for acceptable travel expenses and preferred vendors.

Some companies accept auto-approval for certain types of travel requests. For example, a well-defined corporate travel management policy may include parameters for auto-approval of domestic travel within a certain cost limit.

Submitting Projected Expenses for Review

Real-time visibility into your employee’s spending of company resources provides invaluable insights into the performance of your travel expense policy. When employee travel requests are approved, the projected expenses can be recorded and submitted to finance and accounts for review.

Should these expenses not align with the company’s travel policy, the travel manager may reject the request or ask for an amendment.

Travel expense management software simplifies the process, where employees can simply submit digital copies of their expense projections and fill out the necessary details such as the purpose of the expense, date, and amount ranges for meals, accommodation, and transport.

Thorough Travel Compliance Checks

The benefits of achieving 100% compliance in travel expenses include improved forecasting and better control over travel budgets. One sure way to increase adoption and compliance with your travel and expense policy is to ensure that traveling employees understand the implications of non-adherence.

>> Related: How Much Is T&E Policy Compliance Worth? <<

Advanced automated expense management tools are infused with adherence features, such as spend categorization and predetermined spending limits to instill responsibility for company resource usage. 

Employee Reimbursement

Once an expense has been authorized by finance, it remains subject to reimbursement. With manual systems, it takes an extended time period to compensate employees for out-of-pocket expenses in the discharge of their duties. Automation fosters timely reimbursements, sparing valuable time and effort.

Expediting the Travel Expense Management Process

From a technical standpoint, the travel and expense management process can take longer than anticipated, depending on your internal processes. Kickstarting faster reimbursement and review and implementation of the expense management policies can lead to improved financial efficiency and overall cost savings in line with the company’s budgetary objectives.

Minimize or Eliminate Manual Processes in Travel Expense Management

The benefits of a paperless policy are numerous. It simplifies the expense reporting process for employees, reduces the likelihood of errors or lost receipts, and provides greater visibility and control over company spending. Eliminating manual processes promotes a more efficient and sustainable approach to managing business expenses.

Employees can simply upload receipts and fill out expense reports digitally, not only saving time, but also reducing the environmental impact of printing and storing paper documents. 

Keep Your Travel Expense Process (and Policy) Updated

Updating your T&E policy regularly is essential to greater efficiency in expense control. Start by examining reports from your expense management system to identify cost-saving opportunities. Look for trends and patterns in spending to determine where adjustments can be made. 

Specify your preferred suppliers for various expenses to take advantage of volume discounts. In essence, updating your travel expense process regularly not only saves money but also ensures consistency in service and quality.

 

Communicate Expectations in Plain Terms

Providing clear expectations in your travel and expense policy keeps your staff and management on the same page. For starters, you may require all travel and expenses to be pre-approved by a travel manager or supervisor. 

Additional expectations can be laid out further, for example:

Expense Reimbursement:

Viable Flights and Hotels:

Ground Transport Guidelines:

Such clear instructions as the examples above set the foundation for adherence and accountability for traveling employees.

Consolidate T&E Management with an All-Inclusive Travel Management Platform

As evident in many small businesses, uncoordinated travel management efforts only bring more unnecessary frustrations than solutions. TravelBank centralizes your travel expense management endeavors on a true end-to-end solution, streamlining expenses, tracking employee spending, and providing greater travel cost control.

With TravelBank, all travel expenses are managed in one central place; an integrated experience that not only simplifies your travel and expense process, but also creates a complete overview of your travel expenditure.

Conclusion

Regardless of company size, having a user-friendly system that can handle transactions in adherence with company policy can alleviate a significant portion of frustrations and challenges faced by employees, streamline the expense reporting process, and ensure compliance with local laws.

FAQs

What should you look for in the best travel expense management software?

When searching for the best travel expense management software for your business consider its user-friendliness, where employees can easily input expenses and navigate the system hassle-free. Scalability is important for growing businesses, as your ideal software should be able to grow with your business over time.

What is the best way to keep track of business expenses?

The best way to keep track of business expenses is through your automated expense management software. Mountains of paperwork not only introduce room for error, but also make the process more difficult than it has to be. Automated expense management software allows for easy expense tracking, report generation, and compliance. 

What is the importance of expense reports?

Expense reports provide financial visibility of the company’s transactions, capturing all expenses incurred by employees in the discharge of their duties. With greater visibility comes adherence and better accountability for company spending.

How can we track expenses for a small business?

Tracking expenses for a small business starts at a detailed breakdown and accurate categorization of all business costs involved. These categories can include office supplies, travel, utilities, and more. Expense tracking software can help your business record and monitor all expenses in a structured and more organized manner.