What is travel and expense report and why automate it?
In the business world nowadays we get to hear a lot about travel and expense reports whenever employee travel and expenses are the topics of discussion. T&E expenses are mostly used to explain the company’s operational costs related to business travel from T&E fraud to policies, everything has a cost. The business travel industry is a $1.28 billion industry.
Your business may be located anywhere in the world, chances are your company’s top three largest expenses consist of T&E as one among salaries and SaaS. A travel and expense report provides better employee spending transparency and helps you reimburse the employees quickly and effortlessly. However, you must be wondering what exactly is T&E expense?
What does T&E mean?
T&E stands for “travel and expense” or “travel and entertainment.” This term is used to describe business expenses that employees incur either from their pocket or through a company card for business purposes. These T&E expenses are then reimbursed directly or the credit card bill is paid after the employees submit the genuine and appropriate paperwork.
T&E is a category that includes a large variety of business expenses such as dinner with clients, business travel stay and related expenses, etc.
It consists of particulars such as meals, lodgings, air travel, local transportation, and incidentals. When associations strive to minimize expenses, they may cut down on T&E and discover paths to tighten compensation policies and maintain better compliance with them.
Importance of T&E reports
Travel and expense reports are significant for various major reasons that matter to an association, whether a small organization or a global corporation.
Fraud reduction
Unluckily, employee fraud is an unwanted element of travel reimbursement. However, you can lower your association’s subjection to these frauds by following a proper procedure.
Tax preparation
In most countries across the globe, travel is completely nontaxable, in a case where it justifies business motives. The purpose may include recruitment, sales, on-site client assistance, professional development, procurement, and more. Well, you need to present an invoice or a receipt as proof to deduct your tax legally with the IRS or related government entity.
Business intelligence
Reporting not only serves for the tax branch of the governments whose countries you carry your business in. Analyzing travel expenses is significant for your organization as well. To elaborate, with proper knowledge relating to travel spending, you can make progressive decisions to design your T&E budget. With the monthly and quarterly travel and expense reports, you can find out teams or projects that are overspending.
How can you report T&E expenses?
Expense reporting software supporting policy compliance is an additional benefit for associations planning to scale. It can easily identify policy-restricted expenses which makes it convenient for approvers to trace violated T&E expenses.
Employing an expense report template for tracking expenses
Initially, several organizations began their T&E expense tracking process on Microsoft excel sheets. Well, in the long run, this method becomes inconvenient. The expense reporting process is still carried out manually, which implies employees have to hold their invoices or receipts for a long duration. Plus, every communication is carried on through phone calls and emails, which serves to delay. Tracking the audit trail becomes complicated when expense reporting is a paper process.
Using travel & expense management software
Travel expense management software aids in simplifying the process of expense reports for business travel. It allows your employees to submit expense reports for business travel conveniently with the use of a mobile app. With the introduction of OCR technology, employees can now click expenses directly from invoices. It eliminates the requirement of holding paper receipts for a long time. Once the employee submits the T&E expense report, approvers get notified. They can approve or disapprove expenses within a few clicks.
Manage all your company travel expenses with ease
T&E reporting best practices
In the growing technological world, a T&E expense report is not a physical form anymore. Expense reporting should be unified with your business travel software. Also, the expense report for business travel process should be digital. How to simplify your T&E expense reports with invoice unification, reimbursement request reduction, and receipt scanning. Have a look at these do’s and don’ts:
Implement the right software
DO employ T&E software with automation facilities: Implement T&E expense management software that provides receipt scanning. It automatically imports the expense report form data.
DON’T manually store receipts and T&E expense reports: Avoid the use of a paper expense report template. This will only lead to manual work for your managers and travelers. Rather, your expense policy should brief how to employ your T&E software.
Book travel in one place
DO book business trips with travel and expense report management software: By motivating employees to book business trips with verified business travel and expense report management software, you can have a better command over their spending and simplify expenses into one monthly invoice. This brings down the requirement for expense reporting.
DON’T book business travel on consumer websites: The business-related expenses distribute all over the place, requiring T&E expense reports, in a scenario where your employees book business travel on consumer sites (employed by vacationers).
Integrate your tech
DO integrate your T&E software with your T&E expense management software: To compile all of your nontaxable travel expenses in a single location, you are advised to consolidate your expense management software with your business travel platform.
DON’T rely solely on a T&E software: Even if travel and expense report management software is beneficial for every kind of expense, it doesn’t assist you to spend money. It only reflects what you spent after the fact. You require a business travel platform for invoice integration and submerge T&E policies.
Use corporate cards to your benefit
DO provide business credit cards to frequent travelers: A corporate card may not save time as several associations still demand employees to prepare a travel and expense report even if they employ the provided corporate card. The latest T&E expense management software conciliates T&E expense reports with credit card transactions, so your finance team is free from the additional work.
DON’T require travelers to constantly demand reimbursements: Employees avoid making payments with their fund and then files a request for expense reimbursements. The introduction of a corporate card eliminates this system. Having fewer expense reports for business travel saves time for managers and travelers.
Digitize your travel policies
DO include your T&E policy in your travel and expense report management software: One cause why business T&E software is so significant is the capability to digitize policies. These T&E policies play a vital role during trip planning and booking, so they control expenses.
DON’T rely on a policy document to assist you to handle spending: Employees don’t usually go through T&E policy documents. If your T&E policy is only a part of a document, it might be convenient to educate employees on how to scan invoices, but it won’t control your business T&E expenses.
Related page: Why should businesses have travel request approval workflow
How can automation makes T&E expense reporting easier for your business?
Designing a travel and expense (T&E) policy and employing corporate credit card facilities is a perfect approach towards managing your employee spending. Well, in a manual process, it becomes cumbersome for the finance department to analyze multiple T&E expense reports. This is where automation plays its role.
The finance team is now free from the tiresome paperwork. Policy violated expenses are often picked out, therefore separating them from the legitimate T&E expenses. Advanced T&E software has a lot to offer you. Your finance team can study the spending pattern of the organization within seconds.
This will assist them to make amendments to the T&E policy and take appropriate financial actions. Volopay, as a corporate travel expense management software, discards all disputes associated with your expense management. Shift to paperless T&E expense accounting experience and bring down your reimbursement turnaround duration.
Related page: Automate your travel and expense management process
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