Last Updated on: April 15, 2024 at 7:16 am
In 2021, companies spent $754 billion on business travel globally. Global business travel had consistently exceeded $1 trillion each year. This shows that there are many opportunities for growth as companies make a rebound from the movement restrictions introduced during the pandemic.
To maximise business travel spending, organisations need effective travel management. Travel managers and HR leaders need a system in place to organise the financial aspect of business travel to promote the wellbeing of their colleagues on the move, seamlessly process reimbursements, and easily automate administrative tasks like bookings, among others.
We have set out to create a comprehensive travel expense management guide that would help you take the first steps toward optimising your company’s travel expenses.
In this article, we'll take a look at:
Travel expense management (TEM) is the process of tracking, monitoring and reporting travel expenses. It’s a critical function in any organization that relies heavily on business travel to conduct business, but it’s also one of the most labour-intensive. One reason why this is important is that, in many countries, companies are exempted from paying taxes on business-related travel spending. To enjoy this benefit though, a company must ensure that it collects all travel expenses and apply for the lower tax liability.
However, travel expense management does more than that. Effective travel expense management requires meaningful collaboration between departments and ensures that all travel-related expenses are detailed and ordered. This visibility ultimately ensures easy reconciliation at the end of each month, allowing companies to stay on top of their budgets and avoid overspending. Therefore, travel expense management is integral to a company’s overall financial health.
In a world where digitalisation is accelerating at an incredible rate, many businesses find it complicated to keep up with the pace of ever-evolving technology. The sheer amount of resource-intensiveness involved in manual corporate travel management makes it arduous. Yet, it’s obvious that technology supercharges corporate travel management through cost savings, faster report generation, and seamless policy implementation, which all help stakeholders spend more time on actual work instead of admin tasks.
In any case, corporate travel expense management is hardly straightforward unless you have a system in place that’s geared towards efficiency. Beyond the actual travel costs such as fees for flight and accommodation, business leaders also have to consider others including associated charges (such as re-booking and cancellations), indirect fees (such as memberships and subscriptions), supporting software costs, and even manpower.
Ultimately, business leaders have to navigate the complex terrain of managing three elements: business travel itself, then finance, and people as well. After all, business travel is not possible without expenses neither can you avoid considering the well-being of your employees while they represent your company on trips. These challenges lead to poor expense management even if a company already has a travel planning system in place.
Poor travel expense management can lead to lost opportunities for growth and revenue, not to mention a heightened risk of business failure. However, such effects may not be immediately obvious unless you watch out for the following symptoms:
The next section of this travel expense management guide highlights the features of a good TEM process. Certainly, an effective travel expense management system does away with manual processes and methods that don’t prioritise employee satisfaction in trip planning.
In travel expense management planning, you should invest in TEM software if you want to:
This travel expense management guide can’t be complete without listing software platforms that are tried and tested for enabling you to enhance your business’s travel expense management process.
Volopay provides a central platform for tracking and managing all your company’s spending. Integrating financial tools from Volopay into your travel management system can help you to be more efficient and cut unnecessary costs. For instance, you can issue physical or virtual cards to employees on the go to help them make travel-related payments with ease.
Also, Volopay supports both domestic and international transactions; even if your employees have to travel out of the company, they are covered. Moreover, the software helps you to seamlessly process reimbursements when employees spend out of pocket while travelling.
Xero is an integrated accounting system for SMEs in particular. By securely syncing your bank and financial information, you can use Xero to manage your invoices, automate financial reporting, and even process tax returns.
The best feature of Xero for corporate travel management is the ability to let stakeholders collaborate in real-time, access updated information, and make data-driven financial decisions. Xero also has an app store with over 1,000 third-party apps that enable you and your employees to conduct various business transactions.
TruTrip is an all-encompassing solution for managing all things business travel for your company. TruTrip helps you automate different aspects of trip planning such as booking, reporting, policy-making, and so on.
For instance, integrating TruTrip with a platform such as Volopay or Xero can help you enhance payments and financial reporting. Ultimately, TruTrip helps you derive value from corporate trips by helping you cut down inefficiencies and lower costs by up to 30%. Travellers also benefit from much more seamless and highly satisfying corporate trips.
Veryfi is an API that can be used to intelligently scan invoices and receipts, extract information, and transform them into structured data. One of the challenges of the corporate travel sector is that many businesses are still stuck with manual methods of collecting receipts and bills; it becomes difficult to track them up.
With Veryfi, companies can smoothly transition to a digital model of storing and organising financial data from receipts through intelligent optical character recognition (OCR).
Implementing a technology-driven TEM system is not something you up and do. There are steps involved. Follow the steps below for a seamless transition to effective TEM:
TruTrip can help you reduce your travel expenses by up to 30%. You don’t have to give up on essential travel because with TruTrip, you can find great fares and rates. More so, TruTrip’s software is easy to implement and it brings clarity and transparency to your travel management processes, enabling you to identify waste points and act as appropriate.
In addition, since TruTrip integrates well with accounting platforms such as Volopay and Xero, financial matters become worry-free such as facilitating payments, preparing expense reports, and processing reimbursements.
TruTrip also includes a smart policy builder with which you can automatically customise your business travel guidelines, set exceptions, determine trip approval requirements, and flexibly adjust based on current needs.
Finally, real-time expense visibility and tracking from TruTrip ensure that you implement your smart policy in a way that aligns with your business travel goals, needs, and budget.
TruTrip offers smooth processes, full control of travel expenses, and cost reduction. Book a demo or sign up for free trial to improve your travel expense management in an instant.
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TruTrip streamlines booking, management, and reporting for hassle-free business trips.