Streamlining Travel Expense Management Is the First Step to Successful Business Travel


December 6th, 2018 finance   travel management  

At some point, every business struggles with managing their travel expenses. Whether you make everyone responsible for their own details, or try to impose standard policies, travel expenses can be extremely high and the process is extremely complicated. Everyone’s eager to find a way to make the process better, control costs, and reduce the back and forth.

The job to streamline the effectiveness of this area often falls on the finance department. But many finance heads are not equipped to handle the legacy of paper forms, spreadsheets, and emails to handle business travel and expense processes. Outdated travel expense management processes result in ineffective travel expense management and an incredible waste of time. That’s where you need a streamlined, automated travel management.

What Is Travel Expense Management?

Travel expense management is how a company and its employees handle travel-related expenses. This includes recording all expenses that take place before and during the trip (like flights, accommodation, meals, cab fare), creating journal entries for each expense, reimbursing the employee, and reporting the expenses to claim tax deductions.

Benefits of Streamlined Business Travel Expense Management

Compliance With Travel Policies

Ensuring that corporate travel policies are adhered to takes a huge burden off the finance team’s shoulders. It makes it easier for them to approve or reject a claim. This will also help reduce expense frauds and enforce compliance.

Visibility Into Financial Health

Finding where your money goes helps you plan out an effective budget for business trips. When you track how much money goes out with the help of a travel expense system, you get a better picture of the cash flow. You can identify areas where you’re spending unnecessarily and make insightful decisions that can help you cut down on costs.

Tax Deductions and Audits

Travel expenses must be handled in the right way in order for an organization to mark them as a legitimate expense. Without tight control over the process, you may be missing out on benefits. In addition, records and audit trails need to be present to show that you’ve properly managed travel expenses and haven’t opened up yourself to claims to mishandling funds.

Happier Employees

You can make your employees’ lives a lot easier by making it simple for them to submit their travel expenses and get faster reimbursements.

Pro Tips to Streamlining Your Travel Expense Management

While travel and expense processes can be dreary, there are a few things you can do to make it less daunting. Following a streamlined travel approval process can help you save time and avoid costly mistakes.

Use a Travel Expense Tracker

When your salespeople are out there closing deals, it can be frustrating for them to spend just as much time collecting receipts for food and travel as they do connecting with customers. It’s crucial to make the process for submitting expenses as easy as possible to that requesting reimbursements doesn’t become a full time job. A travel expense tracker with a mobile app comes in handy so employees can submit expenses even when they’re on the move.

Automate Whenever Possible

There are a lot of manual holes in the travel expense process. From paper receipts to keying in data on a spreadsheet, there are many chances to create a more automated system. Whether it is automated approvals for a particular amount or creating journal entries immediately, you can find many ways to introduce more smooth functioning.

Avoid Paperwork

The IRS requires you to keep a record of all receipts for up to three years. Paper receipts not only fade and become illegible with time, but they’re also easy to lose. So, it’s always better to scan the receipts and back them up in the cloud. This saves you a lot of time during audits and you don’t want to be at the mercy of archaeological work to decipher the lost ink on paper receipts.

Eliminate Double Entries

Connect your expense reporting system with your other systems like accounting software to avoid manually entering the same data twice. This not only saves you time but also eliminates human errors.

Set Up Online Reimbursements

When the finance team approves a claim, you can expedite the reimbursement process by setting up an ACH payment or a direct bank transfer and sending the money directly to the employee’s bank account.

How Can You Automate Travel Expense Management?

The tracking of expense claims and reimbursements can be a time-consuming and labor-intensive process unless expense management systems are used. Starting from travel requests to getting reimbursed, there are plenty of tasks that can be automated.

Introducing automation at every step of this tedious process can not only save you time but help you run a more efficient business. According to a study, businesses can save up to 70 percent of the time they spend on expense reports by automating travel expense processes. You can either use a dedicated expense tool or build your own with a tool like KiSSFLOW to automate most expense management processes.

Here are a few tasks you can automate to make travel expense management a breeze:

Start by thinking about a portal where your employees can raise a request for business trips. This can be a form where most employee details like name and reporting manager are pre-filled. Employees only have to enter details specific to the trip they’re about to make.

Travel Approval

Once employees submit their requests, they are sent for approval by one or more people. This is where having a well-defined corporate travel management policy comes handy. You can choose to auto-approve travel requests based on certain criteria. Perhaps, a one-day local trip doesn’t need to go through the lengthy approval process.

Submitting Expenses

Employees can capture expense receipts and upload them as and when they happen. This saves them a lot of time when they come back. All they have to do is ensure that their expenses don’t violate the travel policy and submit it. There are even finance management tools to capture information from a digital copy of the receipt and categorize the expense accordingly.

Expense Approval

By setting up an approval hierarchy, you can ensure that relevant information reaches the right person at the right time. You can even choose to auto-approve expense requests in certain cases. For example, if the claim is less than $20 and the expense category falls under food, you can choose to approve this claim automatically, thereby saving a considerable amount of time.

Reimbursing the Employee

After approval from the finance team, you can set up an automatic travel reimbursement process where the money gets credited to the employees’ bank accounts directly.

Track Your Travel Expenses to Improve Efficiency

A wise man once said, “What gets measured, gets managed”. It’s important to keep track and record every travel expense to identify pitfalls, avoid unnecessary expenses, and cut down on costs. When you streamline the travel and expense processes, expense claims and reimbursements get simplified. It has become necessary to automate the travel expense management process with a customizable travel request app, so everything runs as smoothly and efficiently as possible.