Travel & Expense Management In 2023 – A Guide
Remember, ensuring that your business trips generate an optimal ROI depends on managing your corporate travel and expense such that it reduces your overall travel budget. Ultimately, it all boils down to curbing costs, enforcing ironclad travel policies, and automating T&E management.
In this article, we will cover the following:
- What is travel and expense management?
- What is a T&E policy?
- Challenges with T&E management
- How to improve travel expense management
- Automate and simplify T&E with Tripeur
Without further ado, here is our 2023 Travel and Expense guide to help you understand the most pressing challenges facing numerous businesses today and how to implement a robust travel and expense management system to address them.
What Is Travel And Expense Management?
T&E management is the process of tracking and managing all corporate travel expenses, including airline tickets, accommodations, meals, ground transportation, and other travel-related costs that employees may incur on their business trips.
The ultimate goal of travel and expense management is to ensure that traveler expenses are within the predefined travel budget and compliant with your travel policies.
Following the best travel and expense management practices improves the efficiency of the entire travel process, from the planning phase to the timely and accurate processing of employee reimbursements.
What is a T&E Policy?
A T&E policy is a predefined framework of rules, regulations, and guidelines to manage your employee’s travel and expenses. It should cover all scenarios where an employee travels to conduct official business and the costs they are allowed and disallowed to spend toward.
Your T&E policies guide your travelers on how and where employees make travel bookings—for instance, specifying a select group of vendors and options with negotiated accommodation rates that have a reduced effect on the corporate travel budget.
It also outlines essential details on the best practices and procedures employees must follow for bookings, approvals, reimbursements, and other business travel management processes.
A practical, well-written travel policy is instrumental in eliminating confusion, guaranteeing compliance, enhancing transparency, and keeping your costs within control.
Challenges With T&E Management
Let us look at some typical challenges businesses face with traditional T&E management systems.
1. Disparate Systems
Although your travel data has a vast pool of insights you could tap into to drive better T&E decision-making, it is impossible when you have disparate systems with multiple data sources.
Organizations that rely on disparate legacy systems with siloed T&E data find that it heavily restricts the data flow within the organization. In such situations, performing analysis, deriving actionable insights, and getting a centralized view of expenses from your travel and expense data becomes complex.
Instead, eliminate the data siloes, process redundancies, and inefficiencies of manual spreadsheet-based systems by engaging in automated T&E management systems that can unify your data into a single source of truth.
It makes all relevant T&E information readily available to stakeholders at the click of a button and can instantly improve the accuracy of your analysis, reporting, and reconciliations.
2. Vendor Management
Managing multiple vendors, such as airlines, hotels, and car rental agencies, can take time and effort. It is especially problematic when you rely on many vendors to secure your travel-related bookings.
In most cases, your admin team would be responsible for coordinating with vendors, managing travel transactions, and sourcing travel bookings from different entities. It would also be their responsibility to be the go-between the travelers and vendors on all travel requests.
The work doesn’t stop there for the admin team. They must also acquire the MIS data from numerous vendors and verify each invoice before forwarding the information to the finance team for a reimbursement review.
When you have multiple vendors, you would have to negotiate individually with each one to get feasible rates. Such a feat requires several man-hours and the dedicated focus of your staff to achieve per vendor.
This resource-heavy, time taking, and complex process is a big problem facing businesses that use manual T&E management systems.
3. No Visibility Into Spends
Overspending on business travel is a common byproduct of using legacy systems with little to no visibility into travel expenses. When you lack such expense visibility, it becomes nearly impossible to study spending patterns and identify areas where you can curb costs.
Instead, an automated travel and expense management system will provide complete real-time visibility into every transaction and accompanying details to all stakeholders. It enables your finance team to make swift data-backed decisions that keep expenses under control.
4. Lack Of Personalization For Travelers
The problem with legacy T&E processes is that they lack the internal controls to regulate travel bookings and budgets. It means travelers cannot freely book their preferred choice of accommodations, airlines, and ground commutation as it may increase the overall trip cost to the company.
Legacy travel and expense systems often assign travel administrators responsible for securing the bookings. Although administrators may be able to lower rates, they seldom factor in employee preferences and convenience in their decision-making, which could lead to a dramatic drop in employee morale and trip productivity.
It can lead to frustration as most traveling employees prefer to make their bookings from a readily available list of options.
You can quickly fix this problem by dropping legacy systems and engaging an automated T&E management system that can be used to seamlessly create and enforce a dynamic travel policy. Such a system enables you to provide your employees the liberty to make their travel bookings without it being a high cost to the company.
The internal controls offered by automated T&E management systems ensure such bookings comply with the company policy limitations. It is a win-win situation that benefits both entities and is a great way to implement desirable, productive, and cost-effective business travel.
Remember, a satisfied employee is more inclined to achieve their business goals than a dissatisfied one.
5. Travelers Have To Pay Upfront
Businesses that engage in legacy travel and expense management systems often require their employees to pay for expenses out of pocket. Upon the event of damaged or lost invoices, the employees face financial repercussions until they can provide evidence and supporting documentation of the transaction for review.
In any case, apart from the apparent delays, a lack of proper evidence in such situations can also disqualify the expense for reimbursement. During such times, the traveler may also incur interest on their official transactions using their credit cards.
However, with an automated travel and expense management system, invoices can be uploaded easily onto the software via your mobile device before it is automatically reconciled and reported to the relevant authorities. There is complete real-time visibility into each transaction, placing no need to produce physical invoices.
Better yet, these systems use AI, Machine Learning algorithms, and your historical travel and expense data to analyze and optimize your traveler budgets unique to the traveler and destination.
Automated T&E management systems eliminate the need for travelers to spend their private funds as the budget and T&E policies will support all transactions they may incur during their trip.
6. Slow Reimbursements
The reimbursement process can be a slow and tiresome process that can cause a great deal of frustration for your travelers. Sadly, almost every process redundancy or inaccuracy in manual travel and expense management leads to delayed reimbursements. It forces employees to suffer the financial repercussions of a trip for months before receiving their refunds. Such an environment could create a negative perception of corporate travel for your employees, drastically affecting trip productivity.
7. Lack Of Audit Trails
Legacy systems that cannot capture expenses in real-time fail to achieve compliance making it challenging to track and manage trip costs. Without audit trails to keep accurate tabs on the T&E budget utilization, administrators, managers, and C-suites will get clarity on the travel expenditures only after the trip is completed, the invoices are gathered, and reports are manually generated. With such a manual system, it becomes increasingly challenging to devise optimal budgets or keep expenses under control.
8. Difficult To Ensure T&E Policy Compliance
It is a preeminent problem for businesses that frequently engage employees in business travel across multiple destinations. In such instances, the T&E policies fail to dynamically address the unique conditions facing the traveler based on the travel destination, where getting your travelers to abide by the travel and expense policies requires you to succeed in three tasks:
- Create a customizable dynamic policy that can adapt to varying travel conditions.
- Clearly and concisely deliver your travel and expense policies to your employees.
- Place the proper internal controls to accurately track and manage expenses such that they comply entirely with your travel and expense policies.
Legacy systems fail to successfully achieve all three of these critical requirements making policy compliance an impossible goal to achieve.
How To Improve Travel Expense Management
However bleak the situation may seem for businesses engaging in manual travel and expense management systems, a few ways exist to turn the situation around.
Let us dive into some ways you can quickly improve your travel and expense management.
1. Centralize T&E Management
A dedicated centralized system can help streamline processes, improve visibility, and ensure compliance, and above all, it will help you with your policy creation and delivery.
Through these systems, you can easily create a dynamic travel policy that effectively reaches all your corporate travel stakeholders through their most commonly used communication channels.
Centralized travel and expense management systems will enhance your compliance and eliminate any confusion your employees may have on what’s expected of them.
2. Make Your T&E Policy Easy To Read And Easily Accessible
Your corporate policy may ambiguously stipulate that employee meals during business trips are reimbursable expenses. Yet, the same policy may not consider dining, room service, and mini-bar snacks to qualify as reimbursable expenses.
The only way for your employees to distinguish the difference is through clear communication of the corporate travel policies. Doing so helps you avoid such mistakes and makes the travel and expense policy readily available to all stakeholders to refer to at any time during their trip.
A centralized system also ensures that stakeholders remain updated on policy additions and amendments without communication gaps. You can guarantee that everyone has a consistent and centralized view of your organizational guidelines and requirements.
3. Use Mobile Technologies
Manual travel proposals begin as formal requests pushed through archaic communication channels through the management hierarchy before they can be reviewed and relayed back through the channels. The long duration for these requests to get accepted can dramatically increase costs and wasted time.
However, by using mobile T&E technology the process becomes more efficient. It enables employees to perform time-sensitive travel tasks such as approvals without suffering needless delays. The travel and expense mobile software allows travelers to send travel requests directly to the relevant administrators’ handheld devices, speeding up the sluggish process.
When employees spend out of pocket for expenses contributing to achieving trip goals, they only need to digitally capture the invoice through their mobile phone camera and upload it onto the platform.
Once that’s done, they no longer need to store or maintain the physical invoices. No problem will arise when invoices get damaged or misplaced, as the finance teams and administrators will already have received automated alerts and expense reports on the transactions.
These paperless solutions can help dramatically reduce manual work, streamline processes, and enhance policy compliance.
4. Give Your Travelers Options
Provide your travelers with the freedom to select their preferred personalized options for transportation, accommodations, and other travel aspects rather than having the administrator do it.
Setting up an automated system ensures that employees’ decisions comply with the travel policy and remain within budget. Such systems can also be programmed to remember traveler preferences to expedite the efficiency of future travel planning and implementation.
5. Automate Reconciliation
Traveler expense reconciliation is a time-consuming, complex process when performed manually. It can be avoided using automated T&E management systems that leverage digital invoices to generate expense reports and automatically reconcile expenses without special attention from the traveler or finance department.
With an automated travel and expense management system, all that is required from the traveler is to promptly upload their invoices onto the mobile platform when the transaction is made. The finance department will not need to manually review any physical invoices as the reconciliation will be automated.
Automated reconciliation instantly frees up the time and resources of your finance department, which can be refocused on accomplishing other critical financial tasks. Automated reconciliation also eliminates inaccuracies and human errors that could cause significant reimbursement delays.
6. Speed Up Reimbursement
Manual spreadsheet-based systems can cause frustration and dissatisfaction among employees who may have to wait weeks to months to receive their reimbursements. A good recommendation is to drop legacy systems requiring you to review expense reports and receipts manually.
Instead, use an automated travel and expense management system that encourages electronic payments and sets clear timelines and policies for reimbursements. Doing so ensures that your employees do not face financial difficulties or lose morale due to delayed reimbursements.
In conclusion, although corporate travel can significantly impact the travel budget of companies of all sizes, it is indeed a fixable core business function.
Automated T&E management systems are here to help you devise travel policies that are readily accessible, streamline invoice and approvals management with mobile technology, provide your travelers with customizable options, and speed up reimbursements.
Remember, the key to maximizing the productivity and feasibility of your corporate travel lies in your ability to curb expenses, the effectiveness of your corporate travel policies, and T&E management.
To begin your transition and maximize the ROI of your corporate travel, explore what a smart travel and expense management platform can do for you.
Automate And Simplify T&E With Tripeur
Tripeur is a stellar expense management platform that automates and simplifies the entire travel and expense management process for its users. Our full-scale T&E expense module addresses and solves all challenges facing your travel and expense management.
Our T&E management platform keeps the CFO, admins, managers, and the finance department in the loop through the entire T&E process, from booking to reimbursement. Apart from approvals, Tripeur’s automated expense alerting and reporting feature keeps management and stakeholders updated on the numerous costs that arise during the travel booking experience, ensuring complete policy compliance.
Engaging in our platform is an excellent way to maximize trip productivity and ROI like never before. Our user-friendly software can perpetually fix your expense management inefficiencies and dramatically curb costs like never before.
Reach out to us to learn how steering away from manual expense management and engaging in Tripeur’s automated T&E management platform can benefit you. Contact us to find out more.