Expense management

Travel and expense (T&E) management challenges for businesses

Apr 05, 2024

Travel has always played an important role in business, whether it is about business expansion or developing your network. However, managing travel expenses can be daunting and there are many travel and expense management challenges for businesses.


From a lack of visibility into expenses to manual reporting and reimbursement processes, these challenges can hinder efficiency, accuracy, and cost control.


But there are effective ways to eliminate these challenges such as using travel and expense management platforms. But to choose the right solution for your business, you must first understand the common challenges and which ones your business is most likely to face.


Before we begin, you can also explore our article on the latest business travel trends, discover key insights on emerging technologies, traveler preferences, and cost-saving strategies. Unlock valuable trends that shape the future of business travel.

Common travel expense management challenges and how to solve them



1. Lack of visibility into expenses


Challenges


In the traditional way of managing travel expenses, an employee would go on business travel using their funds and later file for reimbursements. Due to this, organizations struggle to gain real-time visibility into their travel expenses, leading to difficulty in monitoring and controlling costs.


Solution


Implementing an automated expense management system that provides real-time expense tracking and reporting can help businesses gain better visibility and control over their travel expenses.


2. Manual expense reporting and reconciliation


Challenges


Managing paper receipts and manually reconciling expenses can be time-consuming, prone to errors, and lack accuracy. The accountant has to manually go through each receipt and match their details with the expense reports submitted by the employees to ensure that they are correct.



Solution


Adopting digital expense reporting tools that enable employees to capture images of the receipts instantly and organize them digitally simplifies the expense reporting process. It minimizes errors, enhances accuracy, and saves both the employees and the finance team a lot of time.


3. Policy compliance and enforcement


Challenges


Another major travel and expense management challenge is making sure that employees don’t spend on things that are prohibited from the company policy. Ensuring employees comply with travel expense policies can be challenging, resulting in excessive spending and non-compliance.


Solution


Implementing a centralized expense management system that enforces corporate travel policy compliance through automated rules and approvals helps organizations ensure adherence to travel expense policies.


An expense management system with corporate cards also often has a feature called ‘Merchant Category Blocking’ that essentially does not let transactions go through successfully of the specific merchant codes or category codes that your organization has blocked.


4. Receipt management and documentation


Challenges


Collecting, managing, and storing receipts can be cumbersome, leading to lost or misplaced documentation. Another issue is that the ink on receipts can often fade away quickly. This will render employees unable to report an expense and they will not be able to get reimbursed for it.



Solution


Leveraging digital receipt management solutions that allow employees to capture and store receipts digitally simplifies documentation, enhances accessibility, and reduces the risk of lost receipts.


5. Managing multiple currencies


Challenges


It is common for an employee to travel abroad and file reimbursements with receipts that are of a different currency than the one that their organization uses for all its transactions. Dealing with multiple currencies can complicate expense tracking and reimbursement processes, leading to potential errors and inefficiencies.



Solution


Utilizing expense management software that supports multiple currencies and automatically converts expenses into the organization's base currency streamlines the process and ensures accuracy.


6. Lack of real-time analytics and spending insights


Challenges


With manual processes, your finance team might gather all the expense information; but without a centralized platform, they will not be able to see the data in relation to each other. Without real-time analytics and spending insights, organizations struggle to make data-driven decisions and identify cost-saving opportunities.



Solution


Adopting expense management software that provides real-time analytics and reporting empowers businesses to gain valuable insights into their travel spending patterns and make informed decisions.


7. Slow reimbursement process


Challenges


Reimbursements are usually submitted at the end of each month. An employee has to collect and keep their receipts safe throughout the month to make sure they don’t get lost. And after this, they must submit it along with their expense report and wait some time till the next month to receive their reimbursements.


Lengthy reimbursement processes can negatively impact employee satisfaction and financial stability.


Solution


Implementing an automated expense management system with streamlined reimbursement workflows accelerates the reimbursement process, ensuring timely payments and enhancing employee satisfaction.


Dive into our article on employee reimbursement policy design to learn the best practices, compliance guidelines, and strategies to streamline the reimbursement process. 


8. Lack of integration and automation possibilities


Challenges


Manual processes through disparate systems often mean that you’ll have to constantly shift from one software to another for performing different expense management functions. Inefficient integration and lack of automation between expense management systems and other business tools lead to manual data entry and duplicate work.



Solution


Choosing an expense management solution that integrates with other key business tools such as accounting software and ERP systems allows for seamless data flow, eliminates manual entry, and improves overall operational efficiency.


9. Security risks


Challenges


Managing sensitive financial data and protecting it from potential security breaches is a significant concern for businesses. Many companies often do not invest in quality-grade IT security as it can be really expensive for them to safeguard and protect all their systems.



Solution


Partnering with a reputable expense management software provider that prioritizes data security, implements robust encryption measures, and adheres to industry standards can help mitigate security risks.


10. A complex expense approval process


Challenges


A convoluted and time-consuming expense approval process can lead to delays and frustration among employees and managers. Since most of this is done manually through emails, it can be difficult to keep track of conversations and ensure that the messages are read by the responsible parties.


Solution


Implementing an expense management system with multi-level approval workflows and automated notifications streamlines the approval process, reducing bottlenecks and ensuring efficient expense management.


A specific channel only for expense management-related approvals and queries ensures that communication doesn’t get lost amidst a sea of other conversations.


11. Expense fraud


Challenges


Businesses face the risk of fraudulent expense claims, resulting in financial losses and damage to their reputation. Intentional or unintentional, internal expense fraud is a common occurrence in the business world. False receipts, duplicate invoices, and fake vendor accounts are a few of the many examples of expense fraud that can take place.



Solution


Utilizing expense management software that incorporates fraud detection mechanisms, such as AI-based algorithms and receipt verification, helps identify and prevent fraudulent activities, safeguarding the organization's financial integrity.


12. Challenges in providing adequate training to employees


Challenges


Introducing new expense management software and training employees on its usage can be challenging for organizations. People, especially senior management may find it difficult to learn the new system and adapt to the new technology.



Solution


Selecting a user-friendly expense management solution that offers comprehensive training resources such as tutorials, videos, and customer support, simplifies the onboarding process, and ensures successful adoption.



Looking for a best business travel expense management software for your business? Then, check out our article on best business travel & expense management software in Singapore and choose the right one for your business

Volopay’s travel expense management software

Volopay offers robust expense management software designed to address the travel and expense management challenges faced by businesses in managing their corporate travel.

Expense reimbursement

Streamline the reimbursement process by automating workflows, ensuring timely payments, and enhancing employee satisfaction. Faster reimbursement submissions on Volopay mean that your organization can process them faster and ensure that employees get their personal funds back in no time. This keeps employee satisfaction high and also finance functions running smoothly.

Unlimited virtual cards

Generate virtual cards for employees, enabling seamless and secure transactions while tracking expenses effectively. Virtual corporate cards are the perfect tools to make online payments. Due to their intangible nature, they cannot be stolen or lost. They are also more secure to use for payments online as compared to normal or physical cards due to their tokenized nature.

Track spending in real-time

Gain real-time visibility into travel expenses and monitor spending patterns efficiently. Every transaction that happens through a Volopay corporate card or through the platform is tracked and recorded in real-time. This ensures that there is complete transparency and visibility of expenses at all times.

Expense reporting

Simplify the expense reporting process with automated tools, eliminating manual data entry and reducing errors. Whether it is submitting receipts for expenses made through your corporate card while traveling or submitting receipts for reimbursements, you can do both easily through Volopay’s mobile app. You don’t need to store and keep all receipts till the end of the month and file tons of paperwork.

Multi-level approval

Implement multi-level approval workflows to ensure adherence to expense policies and control spending. Using Volopay, you can set up approval workflows with up to 5 levels of approvers for making payments through the money transfer function. This will ensure no unauthorized payments are made and each responsible manager knows the travel expenses that their subordinates are making.

TruTrip integration

Volopay is integrated with the TruTrip platform. It is one of Southeast Asia’s biggest travel booking platforms. This helps Volopay customers easily book through the portal and pay seamlessly for flight tickets, hotel accommodations, or other travel arrangements on TruTrip.

Choosing the right travel and expense management software


Managing travel expenses poses numerous challenges for businesses. But with the right strategies and tools in place, these travel and expense management challenges can be overcome.


By leveraging automated expense management systems, such as Volopay's travel expense management software, organizations can streamline their processes, gain better visibility and control over expenses, enhance compliance, and improve overall efficiency.


Choosing the right expense management software is crucial for businesses looking to optimize their travel expense management and cost-effectively drive growth. To know more about Volopay’s offerings, book a demo today at your convenience.

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