Importance of the Travel and Expense Management Process: Tips for Success

Travel and cost management: what is it? 

When employees go on work trips and journeys for business purposes, it is important for companies to effectively record, document, and monitor the costs involved. Managing these expenses linked to travel helps in understanding spending clearly. This process, known as the Travel and Expense Management Process, ensures that companies can efficiently track and control their travel-related expenditures.

Check out this article on practices for handling business travel expenditure within your company.

  

Why is it crucial to control expenses and travel? 

According to a study by Hubspot nearly 44 % of businesses have no intention of investing in a travel and expense ( T&E ) management solution because they feel satisfied, with their existing methods. However this approach could be causing them to miss out on benefits. 

• Don’t you think dealing with costs can be really annoying?  

• Which is managing tasks that consume a lot of time and effort; correcting numerous mistakes; or not having clear insight into where the money goes?  

• Employees often express frustration with the chores of keeping track of receipts, submitting expense reports and waiting for reimbursements.  

• I’m sure you know how frustrating it can be, for finance teams when they have to deal with reconciliations and verifying policies or processing settlements and rejections.  

  

Automation is increasingly common in managing travel and expense (T&E) processes; however, it seems that numerous businesses continue to depend on methods, for this task. This does not result in a loss of time. Automation in T&E management also diminishes employee efficiency by requiring them to invest hours tracking travel specifics manually.

 

 

The process of managing travel and expenses has 5 steps. 

1. Placing a travel request

• In a travel procedure you need to submit a travel request and await approval before proceeding with the booking process. Whereas in an automated travel and expense management system, handles both the requests and approvals concurrently.  

• Your supervisor has the option to review and approve the travel request manually or seek information through a web-based platform platform or mobile application, for enhanced convenience.  

• Some companies use travel management software that lets their employees book flights and taxi services easily and directly online while various software vendors team up with Travel Management Companies (or TMCs, for short) providing a selection of travel choices. 

• During this procedure the software compares reservations with the corporation’s travel and expense guidelines to spot and resolve any breaches automatically.

 

2. Travel approval

Do you think that waiting for approvals after spending money is one of the reasons why reimbursements get delayed?  

Travel and expense management software tackles this issue by obtaining approvals during the expense incurring process itself. By having access to the data in real time enables both you and your finance team to exert better control over the complete expense management procedure.  

Furthermore, the approval process is made efficient by enabling managers to examine the expenses and request further clarification (some platforms even provide, in app chat) enabling them to promptly approve or disapprove expenses. 

 

3. Expense report

Nobody eagerly anticipates the task of handling travel and expense paperwork post a work related journey – sorting through receipts to tally up expenses and getting approval can definitely be a chore!    

Travel and expense management software can make the process more efficient: 

• Employees have the convenience of using an application to scan and upload their receipts, these receipts are then seamlessly connected to their expense reports.  

• During the journey employees can regularly update their expense reports in time to stay organized effectively.  

• Expenses are quickly sent to the departments or supervisors for approval so that employees can finalize their trips without any delays in processing and verifying their claims.  

• After approval is granted for the transaction, the system will check the payment method. Begin processing the payment.The software is designed to connect with accounting systems and other relevant platforms to ensure that all required transactions and transfers are carried out automatically.  

• After their trip is over employees can view a report that outlines the details of their journey the expenses they’ve submitted for reimbursement and the total amount settled. 

 

4. Expense claim approvals

According to a study, by Hubspot 34 percent of the businesses surveyed are looking to simplify their process for approving expenses.    

When streamlining approval processes, for travel and expenses. it’s crucial to establish a policy, for guidance is a set of important queries to ponder: 

• Many companies face challenges when it comes to employees submitting expense documentation smoothly and efficiently. It is crucial to streamline processes and reduce obstacles for workers in handling expenses. For instance, Appmocx’s expense tracking application simplifies the process, by allowing users to snap photos of receipts and effortlessly submit them for approval.  

• How many levels of approval are there in place currently? Having layers of approval is acceptable long as the process is well organized, however manual procedures may cause delays.  

  

Using expense management software such as Appmocx can streamline workflows across levels efficiently.   

• Have you thought about utilizing company credit cards for business expenses? These cards offer convenience by saving time and help in monitoring expenses. Moreover, when connected with an expense management system they can automatically match transactions without the finance team having to verify employee reimbursement requests. 

 

5. Reimbursement

Reimbursement for travel expenses signifies the conclusion of the travel and expense management procedure.  

Opting for transfers or credits, to employee’s bank accounts can help you save time and effort while ensuring that employees receive their funds promptly.  

In order to enhance this procedure effectively it is crucial to establish a robust feedback mechanism. Collecting feedback from employees following each journey can offer perspectives.  

Regular feedback and regular updates to the process will ensure that workflows stay efficient and productivity is enhanced overall. 

 

 

Manual travel and expense management process 

An Impending Audit Concern:  

According to Tallies 2019 study, on travel and expense management trends for finance teams, across industries it was found that a large number of professionals surveyed only 27% of the 600 finance professionals utilize systems of automatically identifying out of policy expenses.  

 

The conventional methods of handling the expense and travel procedure 

• Workers must provide an expense report after they come back, from a work trip with all their details like name and contact info along with the dates of travel and every cost made during the journey including hotel stays and currency conversions and also taxi fares plus any expenses for meals with clients and the, per diem rates as the distance covered in miles.  

• Once the task is finished and all details are in place as needed for review and approval by the Human Resources department (or the relevant team) the employee then submits the expense report, for processing and validation.   

• If everything goes according to plan and we get all the approvals, in place the settlement will be processed as expected.  

• The time it takes to complete this whole process may change depending on things, like how expense reports there are and how well the claims are handled accurately and efficiently and the time it takes for verification and approval, from managers.  

• It’s important to have all the paperwork, for your expense report such as flight tickets or train receipts and rental agreements along with receipts for expenses incurred during events and confirmation emails, for accommodations. 

 

 

Problems and difficulties associated with inefficient T&E procedures

1. Manual processes

“Did you realize that more, than half, 53% of the individuals surveyed in Tallies study pointed out ’employees losing receipts and submitting expense reports without them’ as their main difficulty?” 

This problem often comes up due to time consuming travel and expense processes.Lets delve into some of these challenges.  

Manual or automated procedures often require a large amount of time and can distract employees from engaging in more valuable activities within your company.  

Some significant challenges linked to methods of managing travel and expenses include; 

a) It is unorganized and ineffective 

Frequent transactions often lead to mistakes made by employees and management alike which can cause mismanagement and impede growth.  

  

b) It is expensive 

The Global Travel Association conducted research showing that businesses that manually process expense reports spend an average of 20 minutes and roughly $58, on each report.More time is spent correcting errors in these reports – 18 minutes on average – which adds, about $52 to the total cost. 

 

c) Does not help employee experience 

Employees are most frustrated by the delays in receiving reimbursements and settling claims.  

Frequent business travelers often find it frustrating to manage claims while starting trips and dealing with unclear travel expense rules that may result in stressful situations and inaccurate expense reports. 

 

2. Lack of visibility

You’ve likely come across the expression “time is money “. It truly holds weight when discussing travel and expense management practices that not only consume time but also lack transparency in tracking travel costs.  

The main problem is that important financial information often becomes old by the time you or other involved parties get to see it resulting in business choices, than proactive ones. 

 

3. Travel policy enforcement

Challenges arise in organizations due, to travel and expense claims that do not meet the required standards of compliance, with company policies and procedures.However the primary obstacle stems from the nature of monitoring and confirming travel related expenditures and other incidental costs. 

 

4. Difficult approval procedures 

As companies expand their operations and teams grow larger in number and scope of work. This can result in approval processes that ultimately cause delays in processing reimbursements. 

 

5. Risk of fraud

Fraud in travel and expense processing may appear minor but it is a concern overall.In the APAC region specifically reimbursable expenses and cash transactions lead to 30 percent of fraud cases, in expenses.  

It has been reported that around 14.4 percent of employee expense claims are suspected to be either deceptive or misused with the fact that uncovering fraudulent or non compliant activities can sometimes require, up to two years.  

Dealing with fraud may prove to be the hurdle when it comes to handling travel and expense procedures. 

 

6. The trip policy is unclear

Unclear instructions and frequent revisions often lead to travel expense claims that do not meet the requirements.   

It could be necessary to revise your travel and expense policy to address situations where employees submit expenses or unauthorized travel arrangements and use mileage rates to ensure clarity and completeness. 

 

 

A travel and expenditure policy: what is it? 

Before embarking on a trekking adventure Have you considered the item to bring along first If you are thinking about a map or a guide You’re absolutely right Having a guide is vital because it can prevent you from getting lost and feeling frustrated within minutes of starting your journey 

 

The goal of a sound policy is: 

Consider the travel and expense policy as a guide that sets out whats allowed and whats not permitted—it lays down the rules and guidelines to adhere to when going on a work related journey.  

The management of travel and expenses covers every aspect of business trips; the policy, on travel and expenses provides a direction for both employees and employers, in the company. 

 

Drafting a good policy: 

• Provide a list of expenses that can be reimbursed and those that cannot be reimbursed.  

• Ensure that all employees are aware of their responsibilities in handling and overseeing travel and entertainment expenses.  

• Provide instructions on how to submit and claim travel expenses to maintain transparency in the process flow. 

 

 

How should a travel and spending policy be created? 

• Before embarking on the journey of you. Make the decision, between opting for the route or committing to the trek. Ensure you have all supplies to successfully complete the journey. Map out your route. Stick to it, without deviating. 

• An organizations policy regarding travel and expenses should explicitly outline the expectations, for employee travel methods (such as air travel or ground transportation like trains or buses) as specify spending limits that could differ based upon the individuals position, within the company.  

• Ensuring clear accountability helps employees grasp the repercussions of not adhering to the policy.  

• It’s almost impossible to address every detail of managing travel and expenses therefore it’s an idea to view your policy as a flexible framework that can adapt over time.  

• Curious to delve into creating a travel and expense policy? Check out our handbook, on travel and expense guidelines, for insights. 

 

 

What is T&E automation? 

Automating travel and expense processes greatly cuts down on workloads. Saves valuable time during month end financial reporting and reconciliations. It boosts your expense management by granting access to information and enhancing visibility into spending with a simple click of a button!  

Automating travel and expense processes involves using software, for Expense Management that effectively records. Manages employee travel expenses to streamline the entire workflow and enhance productivity while ensuring adherence to regulations throughout the process. 

 

What makes T&E automation necessary? 

If your business currently manages travel expenses using manual methods  it may be worth exploring approaches: 

Research conducted by the Global Business Travel Association (GBTA) indicates that processing an expense report costs, around $58 on average. For example; if your company has 10 employees who travel for business and each files an expense report, after their trip you could end up spending $580 in total just to handle those reports.  

Furthermore if a lot of your staff members often go on business trips and face any of these difficulties it might be an idea to consider getting an expense management system. 

 

1. Compliance

One of the obstacles you might encounter when using automated expense tracker software is making sure that everyone follows the rules properly Once the system is set up with all the guidelines and regulations, in place automatic notifications will become a regular part of the process.  

When you send in travel expenses that go over the approved amount limit by mistake or intentionally the system will quickly catch it and either deny the request or notify for permission instead.  

Ensuring complete adherence results, in reducing costs associated with infractions and deceit while improving the precision of predictions. 

 

2. Faster reimbursements and reconciliation

Generating expense reports automatically enables tagging of advances and receipts while also ensuring compliance details are easily accessible, from a location.  

Now everyone can see expense trails clearly. This makes reimbursements and reconciliations quicker and more precise. 

 

3. Pre-approved online travel booking platforms

Expense management tools, like Appmocx offer integrated travel booking platforms that work closely with leading travel agencies.  

Travel portals make it easier, for travel purposes such as trips and air travel, by finding the most competitive options that align with employee travel policies and budget limits. 

 

4. A single point of view above all costs

Isn’t it amazing to be able to get information, on your spending at any given moment?  

You can check your expenses before deciding on purchases, which helps with managing cash flow and making expense predictions more precise.  

Using automated tools, for managing expenses allows you to have a view of your companys spending on a dashboard that is constantly updated in time. 

 

5. Advanced analytics

A sophisticated expense tracking system has the ability to convert your travel expenditure information into insights that enable you to secure improved agreements on deals ‌ and save costs ‍ ‍‍ well as improve compliance and streamline internal operations.  

Here are some questions that T&E software can help you with:  

1. What portion of the budget is dedicated to travel and entertainment expenses? 
2. What expense category makes up the part of the company’s spending budget? 

•  Flight ticket prices 

•  Accommodations 

•  Meals 

•  Renting cars 

•  others 

3. What brands are commonly bought by employees in your company? 
4. Which airline has the expenses, among all the airlines, in operation? 
5. Which accommodation provider is commonly chosen for expenses? 
6. Which industries or locations do your employees visit frequently? 
7. Which category of expenses shows the level of non adherence? 
8. What is the real price of selling a product or service?

 

6. Storage and auditing

Conventional approaches frequently add complexity to the task of examining or auditing expenditures which prolongs the duration for organizations to uncover activities efficiently. By doing with methods of hoarding stacks of receipts and expense documents businesses can enhance the efficiency of their processes.Leveraging tools and technologies can expedite this endeavor significantly.  

An automated system, for managing expenses converts paper receipts into format. Generates detailed reports that allow quick access to individual expenses when required. 

Online expense management systems also offer data backup, for up to eight years to meet obligations effectively. 

 

 

Best strategies to enhance the procedure for expenses and travel 

There are plenty of ways to enhance your travel and expense procedures; nonetheless are a couple of suggestions to kickstart your efforts.

1. Spend visibility cannot be compromised

Using automated software for managing travel expenses and mobile apps for tracking expenses and booking travel can provide a summary of your spending habits that’s highly beneficial.  

  

Just think about the ease of going through reports. Promptly responding to questions, like this. 

• Were there any employees who purchased first class tickets?  

• How much money was spent on plane tickets in total?  

• How much money was spent with a vendor, for things, like accommodation or other expenses?  

  

These tools help you gain understanding of your travel and expense procedures and make changes as required. 

 

2. Travel experience for employees is essential

You’re probably more inclined to get things done when you genuinely enjoy doing them, especially if its effortless!  

Fostering a work environment motivates employees to adhere closely to travel and expense guidelines.  

Enhancing the travel experience for employees can be achieved by offering a self service booking tool to streamline the process effectively. 

 

3. Payment choices that are convenient for employees

Using a company credit card makes things easier for employees since they don’t have to rely on their credit cards for work related travel costs.   

You could also choose to use a travel management company (referred to as TMC) which guarantees that travelers are protected from having to pay for travel expenses in advance. 

 

4. Go paperless

The advantages of transformation extend to all members of the company team. Using an expenditure management platform enables staff to effortlessly file their expense reports, making the process more straightforward for them. 

This change also eases the paperwork load for finance teams alike while greatly improving efficiency. 

 

5. Create more rapid workflows

Simplify your work processes by approving expenses automatically.  

For example, you might configure denial for class tickets while immediately endorsing meal costs below a specific limit.  

Furthermore, establish a system of approval levels that streamlines and speeds up your reimbursement procedures. 

 

 

How might software for managing expenses and travel aid in streamlining the T&E process?

1. Expense capturing:

Using expense tracking applications as part of transformation improves user satisfaction by simplifying the process of managing expenses efficiently. There is an integration of OCR technology, in these applications to capture receipts and other documents related to expenses; all you need to carry out is scan the receipts. Arrange them into an organized expense report.  

This speeds up the process of work. Allows employees to report expenses before their trips end. In fact, they can record expenses as they happen in time. 

 

2. Expense filing:

After coming from a work trip employees often find it tedious to keep track of their travel receipts and submit expense reports.   

An expense tracking system simplifies this task, by allowing staff to digitally submit their expense reports using a platform or a mobile app.   

By submitting all receipts and transactions the report is automatically put together and sent to the relevant supervisor or the companys travel department, for review streamlining the entire process of filing expenses without the need, for paper and stress. 

 

3. Approval stage:

No matter how complex your compliance procedures are structured to be; a strong expense management system can smoothly handle the approval of expenses, with ease.  

When a staff member sends in an expense report it pops up away as a task, on the manager’s dashboard.  

This removes the requirement for teams to seek approvals and guarantees that managers effectively manage their pending approval tasks without any inconvenience. 

 

4. Travel compliance

Appmocx Smart Audit function enhances adherence to rules by reducing instances of expenses. It also identifies spending patterns automatically. This leads to an 80% decrease in the time needed for verifying expenses. 

Managing expenses efficiently requires the use of software to ensure compliance and control overspending within an organization by identifying and filtering out inappropriate claims.  

By using platforms such as Appmocx services enable you to tailor the system according to your companys protocols and standards. When staff members file a travel reimbursement request the program verifies it against the organizations regulations. If any discrepancies are detected the platform highlights the issue. Promptly notifies you with actions customized to suit your business requirements.  

Automated expense management provides an advantage by ensuring compliance leading to improved precision in financial predictions and the avoidance of unnecessary expenses related to noncompliance and fraudulent activities. 

 

5. Accounting

One of the difficulties in handling travel and expense matters is confirming the validity of expense requests, which frequently results in delays due to the necessity for clarifications between staff and supervisors who are awaiting approval.  

By setting up a system in place for the finance team to use it benefits them by providing access to expense information so they can quickly deal with any problems that come up.  

Moreover, the use of automation guarantees that the organization is always prepared for audits. Take Appmocx’s audit feature, as an instance. It boosts control measures while improving efficiency and accelerating processes throughout the company. This ultimately results in reimbursement cycles of five days or fewer. 

 

 

Selecting the Best Software for Expense and Travel Management

1. Business needs and features

In every business setting there are needs that require attention and resolution.The initial step involves evaluating your existing operations and recognizing the obstacles you face.Gaining this insight will enable you to set objectives that will steer you towards prioritizing aspects during the decision making phase. 

 

2. Budget:

It’s time to set up the budget for the project now that we know what features are needed in the travel and expense software you’re looking for – consider checking out automated service providers offering these features at the prices around.

 

3. Customization:

Different companies have different travel guidelines in place. It’s important to choose travel management software that lets you easily incorporate all your policies. Also make sure you can adjust these policies in future without causing any issues. 

 

4. Ease of use:

When it comes to travel software boosting efficiency and making users happier go hand in hand. So don’t forget the user features that can enhance the travel experience! Here are some key questions to ponder;  

• How easy is it to navigate the interface and overall user experience?  

• Does the company provide services that work on multiple platforms? 

 

5. Support:

When choosing travel management software, it’s important to prioritize the quality of customer support since frequent travelers might need help while on the move.   

Make sure the company you select provides a travel and expense system that comes with round the clock assistance, through different communication channels. 

 

6. Integration:

Travel information plays a role, across departments within a company. For access to this information is crucial that travel management software seamlessly integrates with your existing systems, like HRMS, CRM and ERP.  

Finally, you should contact the companies that offer these software solutions to schedule demonstrations and include all parties in choosing the option, for your needs. Consider factors such as how the product stacks up against competitors in terms of features and the level of customer support offered by the vendor when making your decision. 

 

 

Appmocx – Best travel and expense management software 

Appmocx offers cutting edge software solutions for managing travel and expenses that are customized to fit your companys needs. We strive to lead the way in innovation within the industry by pushing the limits of what’s possible. Our unique features set us apart from the competition. They are a testament to our commitment, to excellence. 

 

1. Power Apps – can quickly build custom business apps that connect to your data stored either in the underlying data platform (Microsoft Dataverse) or in many online and on-premises data sources  quickly build custom business apps that connect to your data stored either in the underlying data platform (Microsoft Dataverse) or in many online and on-premises data sources   
2. Power Automate – build workflows that automate time-consuming business tasks and processes across applications and services. 
3. SharePoint – Used to create websites. You can use it as a secure place to store, organize, share, and access information from any device. All you need is a web browser 

 

Our company offers business solutions and complete travel and expense automation that allows you to monitor all your travel costs, from a platform effectively.Our smooth integration, with travel management firms,EPRs and HRMS systems ensures data sharing making it simple to handle information. 

  

Here are a few methods we improve your travel and expense experience: 

• Planning for your trip has never been easier thanks to trip organization combined with automated approval procedures.  

• Effortlessly record your travel costs while on the go.  

• Appmocx policy engine guarantees that you always adhere to company policies without fail.  

• Speed up the process of approving expense reports. Make sure to keep employees informed about their progress.  

• Access consolidated and up-to-date data effortlessly, for reconciliation processes. 

• Turn your spending information into conclusions and useful outcomes. 

 

Turn your information into insights, for better decision making. 

 

Conclusion 

Automating the process of managing travel and expenses gives your company a view of T&E costs with the entire process automated from capturing expenses to settling claims, within a system streamlining operations for efficient audits and improving the overall experience, for employees. 

 

FAQs about Travel and Expense Management

What exactly does a Travel and Expense Audit entail?

An audit of travel and expenses involves reviewing costs associated with business activities, like flights and hotel stays as meals and other purchases made by staff members to ensure that the reported expenses align, with the supporting documents provided by the employee.  

 

What kinds of dangers are associated with managing travel expenses and expenditures?

Managing travel expenses comes with risks that need to be considered such as the reliability of getting approvals, from managers and the challenges that can arise from auditing just a small random sample of transactions instead of all of them systematically. Moreover there are issues related to fraud and mistakes made by individuals during the process. 

 

What is the significance of adhering to travel and expense regulations?

Adherence to company guidelines, known as compliance expects employees to handle business expenses similarly to spending habits as outlined in the travel and expense policy that sets standards, for staff members.  

 

What exactly constitutes a travel management system?

An employee or a travel desk manager can use a Travel Management System (also known as TMS). It helps in organizing and booking travel arrangements, for business trips while also ensuring that the organizations travel policies are followed accordingly.