Travel and expense management (T&E) - Ultimate guide
As you expand your business, it’s no surprise that you’ll also be met with more reasons to do business travel. Whether it’s to meet potential investors, attract new clients, or simply collaborate with teams in different locations, you and your employees will want business travel to go as smoothly as possible.
This is why corporate travel and expense management is crucial, especially when many of your employees are involved in business trips. You want to develop a proper travel and expense (T&E) policy and utilize tools that can help you manage all your travels. Here is why travel and expense management is so important and what you can do to streamline it.
Broadly speaking, corporate travel and expense management is the process of managing any expenses involved in business travel. This includes making travel bookings, managing budgets for business trips, recording expenses, and reimbursing employees who had to make out-of-pocket expenses during their travels.
Businesses must be able to record and track all business expenses incurred during travel to be able to budget efficiently and effectively. The goal of business travel and expense management is to control your spending during business trips and ensure that every expense made is done appropriately.
One or two business trips may be easy to manage without having proper travel and expense management systems and tools in place. But as your business grows and more employees start going on business trips, you’ll need a process in place to help you track your travel expenses.
Without corporate travel and expense management services, you’ll have a hard time tracking your travel expenses. You may end up with unwanted surprises, with bigger spending numbers than you anticipated.
When you don’t have a process in place to manage and report travel expenses, it’s difficult to get any visibility on how your funds are used, meaning that budgeting for future expenses will also be tough.
Before you can manage your travel expenses properly, you’ll need to prepare an expense policy. This will serve as the base for your travel and expense management. Every expense made must comply with this policy.
Your expense policy should also include details and guidelines on how to request funds, authorized transactions, expense reports, reimbursements, and any other processes related to company expenses. It’s a good idea to have a section specifically on travel as well, to make sure that every employee is on the same page about it.
By utilizing a travel and expense management automation platform, you can streamline travel request processes faster. Managers will be notified of any new requests and can approve, reject, or ask for more clarifications instantly.
Some software will also allow you to make travel bookings right on the same platform, making business travel and expense management much easier. All your bookings will also be recorded for ease and convenience when tracking them in the future.
While there are some things that you and your employees can book in advance, such as hotels or plane tickets, there are also other expenses that will be made during each business trip. Employees will have to pay for meals, transportation, and other expenses such as client dinners.
There are several ways these expenses can be made. You could provide your employees with cash in advance for their travel expenses, ask employees to make expenses out of pocket and be reimbursed later, or equip them with a corporate card.
Employees will need to be sure to store receipt data for every expense they make during their trip. Traditionally, this can be done by saving every paper receipt that they receive, holding on to them until they get home, and submitting them in the office.
With a business travel and expense management platform, you have a digital alternative that lets you and your employees simply snap pictures and store them in the cloud. Some software will also offer OCR, which allows for automatic recordings of your receipts.
Depending on what the expense policy for your company is, simply uploading receipts may not be enough. There might be additional details that you require from your employees.
Regardless, you want to ensure that you have a standardized expense reporting process. Make it easy for your employees by automating the process, allowing them to do it quickly from anywhere. Some travel and expense management services have mobile apps where your employees can fill out details in just a few clicks.
Suggested read: Paperless expense reporting to streamline expense management
Having an approval process in place ensures that everyone involved in managing travel expenses is on the same page and guarantees that no out-of-policy transactions are happening.
Expense claim approval workflow can be lengthy and complex. There are many steps involved and multiple approvers to go through. One of the best ways to bypass complicated steps while still maintaining a diligent review process is by utilizing travel and expense management software for better viewing and faster approvals.
Many companies rely on employees making out-of-pocket expenses during their business trips, promising to reimburse them after they’ve sent in their claims and receipts when the trip is over.
Depending on what your travel reimbursement process look like, manually processing your reimbursement claims can take a long time. Crediting funds to your employees’ bank accounts may take up to a month or more after the claims were made.
Theoretically, your travel and expense management process can be concluded when all expense reports have been made and approved and reimbursement claims settled. While this is true for each trip, however, you’ll have to think about compliance and audit as part of the bigger picture.
By doing regular audits, you can ensure that all travel expenses that were made comply with your company policies. This is also the best way to detect any fraud attempts and nip them in the bud.
The bigger your company gets, the more difficult it can be to ensure that every single employee is complying with your business travel and expense management policies.
Unauthorized travel bookings, for example, may happen from time to time. There are many reasons why this is, starting from unawareness to internal fraud attempts.
While you could enforce expense reporting as part of your travel and expense management policy, you still run into the risk of misplaced receipts and lost travel documents.
It’s difficult to ensure that every single expense is tracked fully. This is especially true when employees have to save and carry their receipts until they return home to submit them.
When your employees have to wait until they return from their travel to have time to submit their travel expense reports, you have little to no visibility on what expenses are made while they are away. Neither managers nor travelers will be able to tell whether they are still within the budget or not.
Master the art of expense tracking. Delve into our insightful article to learn effective strategies for tracking expenses, and gaining financial visibility.
There are so many aspects involved in corporate travel and expense management. It’s no surprise that there will also be many things to consider when drafting your T&E expense policy. Due to the complexities, it’s possible that you may miss several things in the process, creating a grey area and leading to a lack of clarity.
One challenge that you may face with business travel and expense management is navigating around your expense workflows.
For one, getting approvals from necessary personnel could take a lot of time. This could be a problem when an employee needs to make a payment quickly. Similarly, there could be many complex steps involved in doing expense reports after the trip.
Without a platform to help you automate your corporate travel and expense management processes, your team will be stuck with time-consuming manual data entry and paperwork.
From collecting and hoarding receipts to manually keying in each transaction made during business trips, it’s a lot of work for everyone involved and could decrease productivity.
Expense fraud could be in the form of internal fraud such as employees purposely making unauthorized transactions or external fraud that results in criminals stealing your funds.
Regardless, not enforcing travel and expense policies or controlling your spending carefully can result in multiple fraud attempts. Some may even go unnoticed.
With no standardized and streamlined process, booking plane tickets, transportation, and accommodation can get complicated and take a long time.
Your team may be stuck wasting too much time trying to get approvals for travel bookings. It could also lead to a ‘pay first, report later’ habit, making it difficult to control which bookings have been authorized.
Business travel can happen both domestically and internationally. Travel and expense management for the latter, however, is often more difficult due to foreign currency conversions and fluctuations.
For travel reimbursements, for example, you’ll have to decide whether the conversion rate is at the time of purchase or when the reimbursement is processed.
Before you go into which tools to use to help your business travel and expense management process, you want to set the foundations first.
To do this, you’ll need to build a clear and comprehensive expense policy, with details about travel expenses in particular. Set up guidelines for everything starting from what expenses are allowed to how to submit expense reports. Make sure that all details related to expenses are answered by your expense policy.
Create a corporate travel policy that streamlines processes, ensures compliance, and maximizes savings. Dive into our article for essential tips, best practices, and expert guidance.
With your expense policy already set up, you’ll want to communicate it with your employees. It’s important that you educate your employees on the importance of corporate travel and expense management and how travel expense policies can help.
Familiarize your employees with your policies and conduct training sessions on how to use travel management platforms. Having everyone on the same page will ensure that managing your travel expenses goes smoothly.
Trying to do your corporate travel and expense management manually is time-consuming and increases the risk of human errors. Whether that is errors in the data entry process or misplacing paper receipts, it’s difficult to be sure that all your records are accurate.
However, when you implement automation tools in the process, you’ll be able to cut down the time you need to make, record, and track your travel expenses.
You might also like to read: Paperless expense reporting to streamline expense management
Booking one or two plane tickets or hotel rooms can be done easily manually. But when you have multiple employees going on business trips consistently, having to manually enter travelers’ data and sort through every single booking gets old.
It’s much easier to do multiple bookings at once by using a corporate travel booking platform. You can also track what bookings you have made and paid for, making it easy to analyze travel habits.
You want standardized approval workflows for travel that your entire organization is aware of. To make things even easier, it’s recommended that you use travel and expense management software that allows you to automate your approval workflows.
Employees can place travel requests through the platform, which will then be routed to approvers who will receive notifications. It’s much faster to process and review requests. Managers can also request details and clarifications and notify employees in return.
Expense policies are only as good as they are implemented. You want to make sure that your employees are complying with your policies and that no unauthorized travel expenses are going undetected.
Conducting regular reviews and monitoring your expenses will allow you better control over them. While it may feel like preparing for and doing audits once a year will suffice, it’s actually much more efficient to maintain regular reviews to ensure that yearly audits go smoothly.
Instead of having separate processes and tools, the best way to manage your travel expenses is by centralizing them in one place. There are many business travel and expense management software that could help you manage your travel bookings, record transactions, and track expenses through a singular platform.
Even if you split it across two platforms, —such as one for travel management and another for expense management—it’s best to get platforms that can integrate with each other.
While you may have the most detailed and comprehensive expense policy, the key to effectively running your business is to be adaptable.
By regularly reviewing your travel expenses and analyzing data from your travel and expense management services, you’ll have insights on what you travel spending habits are. You’ll want to adjust your policies and processes accordingly to help you budget better. Make sure that you’re also always open to new optimization opportunities.
Automation plays a crucial role in streamlining the travel and expense (T&E) process. Here are several ways in which automation can help:
One of the most time-consuming steps of the travel and expense management process is expense reporting. Having to wait until employees are back in the office to manually enter each expense made is also a hassle considering that they will have to try and recall every expense.
By using an expense management platform, however, expense reporting can be faster from anywhere through a mobile app.
Instead of having to keep a mountain of receipts from different business trips, using automated travel and expense management services will let you simply snap pictures and upload your receipts onto your platform.
Optical character recognition (OCR) technology can scan your receipts to record transaction data without any manual data entry process. With cloud storage, you can access your receipts from anywhere.
You can incorporate your expense policy into your travel and expense management tool. By setting custom limitations, you can ensure that any out-of-policy or suspicious expenses are flagged by the system.
Approvers will be notified so that they can swiftly review the expenses and act accordingly. It holds employees accountable and encourages them to comply with your existing policies.
Getting approvals for travel-related expenses can be an unnecessarily complicated process, especially when you have multiple levels of approvers. Instead of having to go desk to desk, you can automate your workflows by using a corporate travel and expense management platform. Every time an employee submits an expense report, managers will automatically be notified and can review them through a dashboard or mobile app.
One advantage that you don’t want to miss out on by automating your travel and expense process is how much more visibility you’ll gain. You can get real-time updates on how company funds are being used by employees on their business trips, especially when card transactions are made and automatically recorded on your management dashboard. Your data will also be easy to sort through, enabling you to answer questions about your spending patterns.
You won’t need to search through file cabinets for piles of receipts when it comes to audit season. With all your data easily searchable and accessible to you through your business travel and expense management software, it’s much easier to prepare for audits.
Skip all the manual processes that typically come with auditing. It’s faster, simpler, and also allows you to detect fraud attempts and unauthorized transactions without hassle.
Automating your travel expense processes using corporate cards can reduce the need for expense reimbursements altogether.
However, if employees are paying for corporate travel expenses out of pocket, automation can still streamline the reimbursement process. Claims will be automatically forwarded to the finance team for review and can be settled through the same platform.
With integration, reimbursements can also be reconciled in just a few clicks.
Undoubtedly, there are a lot of purchases involved in business travel. Using expense management software can help you automate your corporate travel and expense management.
All corporate card expenses or reimbursement claims can be viewed on the same platform. It’s easy to pull up all transactions from one trip and see how much money was spent on it.
While expense management platforms are great for travel and expense management, making your travel bookings and expenses themselves will be even easier with a travel platform. You can add your employees to the platform and allow business travellers to make their own bookings, create travel approval workflows, and manage expenses and itineraries.
Should receipts of business trip purchases get misplaced before your employees return home and file their expense reports, these expenses could go untrackable.
A receipt management tool that allows you to upload receipts and store transaction data can ensure this doesn’t happen. Employees will only have to snap a picture of their receipt after every purchase.
Instead of giving your employees cash in advance or asking them to make out-of-pocket expenses that are later reimbursed, it’s most convenient to manage all travel expenses with corporate cards. By utilizing corporate cards for your travel purchases, you can also easily have all your transactions recorded in one place.
You’ll need to do more than just manage your bookings with travel and expense management services—you’ll also need to be able to get a record of your travel expenses.
Tools that can help you pull data, generate reports, and provide insights will make corporate travel and expense management easier. Review existing expenses and budget better for future trips.
You may have drawn up a clear and detailed travel expense policy. However, you’ll need help enforcing these policies. With tools that can help you manage your policies, you can automate approval workflows and ensure that every step of the travel and expense management process is adhered to correctly and approved.
Managing your business travel can be simple and stress-free with Volopay. As an all-in-one travel and expense management platform, you can utilize Volopay’s payment and corporate card features to easily make travel bookings. Everything will be automatically recorded on your dashboard, enabling not only faster bookings but also easier tracking and better analytics.
You won’t have to worry about untracked or out-of-policy expenses. Every expense can be accounted for, with easy expense reporting processes that allow your employees to upload receipts on the go.
Get an expense approval workflow that gives you full visibility while taking no time at all. Controlling, managing, reporting, and budgeting for travel can all be done in one place.