Corporate Travel Management – 3 Min Read

While some businesses struggle with the typically messy and tiresome task of processing employee reimbursements, numerous others find it an absolute breeze. The difference between these companies is that one relies on outdated travel management systems, and the other uses dedicated T&E management software. 

A 2020 survey of travel buyers captures this by revealing that 66.5% of respondents preferred a travel expense reporting platform with mobile functionality, while only 2% opted for traditional spreadsheet-based systems. 

The overwhelming preference to employ state-of-the-art online expense reporting tools indicates the value and impact that dedicated travel management solutions have allowed businesses to achieve in a short period. They increase the simplicity and accuracy of expense reporting, reconciliation, and reimbursement from the get-go. 

This article explores expense reimbursements, their challenges, and why it is driving the paradigm shift for numerous businesses to move away from outdated expense management systems to innovative T&E software solutions.

What is employee expense reimbursement?

It is common for travelers to spend out-of-pocket for numerous work-related expenses that arise during their domestic or international business trips. Employee expense reimbursement refers to the process where the business assesses the legitimacy of these expenses and awards the reimbursements back to the employee. 

Moreover, what constitutes a legitimate reimbursable expense may vary from company to company, depending on their corporate travel policy rules. As straightforward as it sounds, it is, in actuality, one of the most time-consuming challenges for businesses to perform when they employ outdated travel management systems. 

What expenses should a business cover?

For a corporate travel policy to be optimally effective, businesses must detail what it covers and does not. The policy delivery method must also be considered to increase its overall effectiveness. 

Travelers with a thorough understanding of the corporate policy are less likely to make mistakes, suffer fewer hindrances in reconciliation, and have a smoother reimbursement process. 

Most travel policies cover unavoidable costs such as airfare, accommodations, rental cars, public transportation, taxi fares, training, telephone plans, and meals as reimbursable expenses. Expenses incurred by the employee on leisure or other non-work-related activity may not constitute a reimbursable business expense. 

In other words, most travel policies barring a few exceptions, should cover expenditures that have a bearing on the business trip’s goals and productivity.

The challenges with employee reimbursement

Businesses engaging in traditional T&E management systems post-trip completion require their travelers to save and submit physical invoices corresponding to every expense to the finance team for manual reconciliation. 

During reconciliation, the finance team gathers all the invoices, reviews them one by one, and tries to spot any discrepancies. Only when the expense has no discrepancies can it be reimbursed to the respective employee. 

One of the significant challenges with employee reimbursements begins with the numerous inaccuracies that emerge from the redundant and error-prone manual reconciliation processes. 

In traditional travel management systems, gathering, preserving, and producing physical copies of travel invoices for reimbursements is a flawed and tedious practice prone to errors. While most employee travel allowances and reimbursements are not taxable in India as long as they have a legitimate business purpose, any unfortunate loss or damage of the invoices creates taxation issues for the traveler as they cannot prove the legitimacy of the expense. 

In such situations, when an employer cannot grant a reimbursement due to insufficient evidence, then per India’s taxation rules, they will be required to withhold tax for the expense from the employee’s paycheck. 

Ultimately, the employee fails to recover their money and is also subject to taxation due to an outdated and flawed process. 

How to streamline employee reimbursement

In traditional T&E management systems, there have been several cases where employees perform fraudulent reimbursement filing by inflating the cost of a T&E expense on their reports. Other common cases involve travelers filing fabricated expenditures for reimbursement. The worst part is that businesses often fail to validate and unknowingly approve fraudulent filings. 

Begging the question, as a business owner, how do you enhance your overall T&E internal controls and budget utilization transparency to prevent such occurrences? 

The answer is to employ a streamlined T&E management solution that simplifies invoice management, expense reporting, internal controls, and processes to make the employee reimbursement processes quick, seamless, and accurate. 

Let us look at the simple actions businesses must consider to perform quick and accurate employee reimbursement.

1. Use a dedicated ERP software

A corporate policy may stipulate that employee meals during business trips are reimbursable expenses. At the same time, the same policy may not consider dining, room service, and mini-bar snacks as ‘meals’ per its guidelines. 

In another example, consider an organization that ambiguously specifies that employees may use taxi cab services only when public transport is unavailable. An unaware employee who inadvertently breaks the rule may have to provide supporting documents and justify to the finance department why they did so. The employees need to know these distinctions. 

Even worse, finance departments remain in the dark about trip expenditure until trip completion, when the invoices are submitted. Until then, they remain oblivious to mistakes and fraudulent transactions due to the lack of internal controls and real-time visibility of the T&E expenses. 

After this, the added duration for the team to review the transactions in question causes even more delays in the reimbursement process. 

In contrast, dedicated travel ERP software allows businesses to automate travel operations such as planning itineraries, automating day-to-day processes, promoting inter-departmental real-time transparency, and managing business travel, ultimately enhancing the speed and efficiency of the reconciliation and reimbursement processes. 

2. Use a mobile app for employees

Consider a situation where a business trip’s productivity might be contingent upon an employee sponsoring an impromptu lunch with a prospective customer or client or another circumstance where an employee needs to secure an airway ticket before its price increases. 

In such instances, traditional systems allow travelers to act after submitting a formal request detailing the expense and justification for approval. The proposal then passes through the management hierarchy for review via tiresome back-and-forth emails, after which it is either granted or rejected. The duration for many of these requests to get accepted often exceeds the limited time frame the employee has to carry out the activity. 

In some situations, operational delays due to a lack of transparency and visibility place an employee in the difficult decision of spending out-of-pocket to achieve their trip goals. Unfortunately, some of these transactions may not qualify for reimbursements if they are later found non-compliant, even if it was for the company’s benefit.

On the other hand, mobile T&E applications have made the travel process much more efficient by enabling employees to perform these crucial time-sensitive travel tasks seamlessly without suffering delays and inflated costs. 

Through mobile applications, employees can forward requests, tag multiple stakeholders, and send expense reports directly to the handheld devices of the relevant authorities. The management can then review the travel requests on the go and grant approvals down to mere minutes or hours, considerably speeding up the otherwise sluggish process. 

Mobile solutions also help businesses to clearly and efficiently deliver the policy to the traveler, leaving no room for doubt. When these apps automatically generate expense reports and improve policy compliance, processing reimbursements become quick and seamless. 

3. Control expenses from one dashboard

While real-time expense reporting and automated report generation are notable features of a dedicated travel ERP platform, an outstanding T&E solution delivers all T&E expense information to stakeholders via dynamic dashboards. 

These KPIs allow businesses to spot issues such as potential overspending early and track the employee’s progress toward achieving their trip goals. 

Furthermore, they make it easy for the finance team to collect valuable trip-specific expenditure data and actionable insights to optimize future travel budgeting. This increased visibility also improves the reimbursement process, which gets cut down to mere days from months by enabling the finance team to monitor the expenditure of every traveling employee on a granular level leaving no room for guesswork. 

Such a high level of transparency combined with automated reconciliation is how dedicated travel ERP systems streamline the employee reimbursement process.  

4. Automate expense reconciliation

Flaws in expense reporting are bound to complicate and delay the travel expense reimbursement process. When an organization’s finance team routinely reviews hundreds of physical invoices from multiple travelers, it is bound to make such errors. 

Facing such a large volume of transactions may cause employees to skip steps and employ guesswork to reconcile the transactions as quickly as possible. Such mistakes commonly occur when dealing with damaged, lost, or ambiguous receipts where the finance department may speculate the source of the expense, omit those with insufficient information, and ultimately process incorrect reimbursements. 

Such practices often lead to employees failing to receive a deserving reimbursement, receiving multiple payments for a single transaction, or incorrectly receiving a refund for a transaction that doesn’t comply with the travel policy. 

Another major problem with manual reconciliation is that finance teams often fail to log expenses into the correct expense category. Only correctly tagging expenses to the proper cost center can result in accurate expenditure data collection, which enables the finance team to devise optimal trip-specific budgets. 

Automating the reconciliation process is an excellent way for companies to increase the speed and optimize travel budgets, reducing the volume of reimbursable expenses.

5. Digitize receipts

Businesses and their finance teams need not wait anymore for travelers to complete their trips to get a clear picture of the trip expenditures. Supporting digitized receipts enables organizations to monitor expenses closely in real-time and enforce manageable dynamic budgets accordingly. 

The traveler takes a picture of the invoice through their phone camera and uploads it to the mobile application. Once the image is uploaded and posted onto the platform, it is immediately viewable to the finance department and all other relevant stakeholders. 

Beyond that, there is no need to carry, store, transport, submit, or review the physical receipt, as the relevant information is instantaneously made available to stakeholders. This functionality undeniably proves how well modern travel ERP software leverages the convenience and accessibility of mobile phones and their cameras to improve T&E management tremendously. 

In conclusion, modern T&E management software simplifies processes and reduces delays, making business travel planning, implementation, and reimbursement much smoother. Additionally, it improves employee satisfaction by significantly reducing the time it takes to recover reimbursable expenses. 

If one of your primary goals as a business is to streamline your business travel, optimize budgeting, increase reconciliation accuracy, and dramatically cut costs, modern T&E management software is the best solution. 

Simplify employee reimbursement with Tripeur

Tripeur is a fully integrated business T&E management and reimbursement platform that significantly reduces corporate travel expenditure while keeping employees happy. 

We have always been a customer-first company that focuses on designing our products and modules with specific consideration of customer needs. And through some of our prominent clients, we learned of an immediate requirement to provide an adequate expense reconciliation tool that addresses, solves, and simplifies all challenges facing employee reimbursements once and for all. 

Our fully transparent and easy-to-use software requires no additional learning curve to master and guarantees 100% adoption from your traveling and non-traveling stakeholders. 

Our platform’s expense module, real-time invoice management, automated reconciliation, and mobile features keep the finance department in the loop through expenditure alerts and reports through all stages of the travel booking experience. 

Contact us to find out today how our platform can help you eliminate employee reimbursement problems, lower costs, reduce process inefficiencies, and simplify T&E expense management.