Your comprehensive guide to travel expense management

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.

What is Travel Expense Management?

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.

Why is travel expense management a challenging part of travel management?

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. 

How poor travel expense management can affect you in ways you don’t know

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:

• In many companies, travel expenses are still processed manually by an HR representative or travel manager. This means that employees have to fill out forms, submit receipts and wait for approvals and reimbursements. In addition, this process takes time and effort from HR staff who could be doing work valuable to the business’s bottom line.
• Without proper travel expense management, employees would have limited payment options when booking trips. Some might even have to pay out of pocket for expenses that ordinarily should be covered by the company.
• Without an automated travel expensing system in place, then employees need to manually add their company cards into the booking process every time. This makes it difficult for them to track their expenses and is inefficient.
• When people manually add transactions into a spreadsheet or report, there is always a high chance that something will be overlooked or misreported. 
• Suppose approval is required from multiple managers before a trip can be booked. In that case, approval times will increase dramatically, which means less time for work actually being done by employees out on the road or in the office. This could mean that employees are also missing out on important meetings or events.
• It is impossible for people to be satisfied at work when they have to deal with a long list of restrictions and limitations imposed by their employers, especially something as ‘simple’ as planning meetings. 

What an effective travel expense management process looks like

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. 

• With an automated system, travellers can book tickets within minutes and submit their expenses online. They can also check the status of their bookings or expenses anytime they want without having to wait for someone in the office to do it for them.

• With an insightful financial report, you can easily see how much money has been spent on each type of expense during any given month or quarter so that you know where savings opportunities exist and can better manage your budget accordingly.
• Full visibility of tracking bookings and travel expenses – This will allow you to see how much has been spent on travel, who has travelled and where they have gone. It will also allow you to follow up on any discrepancies or anomalies in bookings.
• A clear travel approval process ensures that employees are following internal guidelines for business trips. The process should be transparent and easy to follow so that employees can understand the steps involved in approving their trips. 
• You can cut down on unnecessary expenses without affecting employee mobility or work performance. With an effective travel expense management system, you will be able to foresee any budget overruns before they happen, so that they don’t affect other aspects of your business plan or growth strategy.
• Make sure your system allows for easy reimbursement requests so staff don’t feel burdened by having to fill out paperwork every time they want to submit an expense claim.

Should you invest in Travel Expense Management software?

In travel expense management planning, you should invest in TEM software if you want to:

• Prioritise accurate data. The systems available today are able to manage the entire process of booking, check-in, boarding passes, baggage and even cancellations. This makes it possible to get high-quality information about your employees’ trips.
• Set up digitalised insightful reports. With these reports, you can see how much money has been spent on trips and other expenses related to travel over time. This allows you to make smart business decisions based on real facts rather than assumptions or guesses 
• Save time and expenses. Managing flights and hotels can take up too much time and energy. With a good TEM solution, it’s possible to save time by automating the process of booking flights and hotels with just a few clicks. This allows you to focus on other important activities in your business.
• Faster booking process. By using a single platform for booking tickets and managing expenses, employees can book tickets faster than ever before. The process is easy, simple and fast. Faster booking process
• Give employees more autonomy when booking their own flights and hotels. This means that they won’t need to wait for several levels of approval from higher-ups anymore before making any decisions about their trips. In this way, they save time while making sure everything goes smoothly according to the travel policy set by the company
• Ensure full visibility. Travel managers have a unique opportunity to see where money is being spent and how much time employees spend on meetings or training events. This allows them to create cost-effective strategies that can reduce spending without affecting productivity or performance.

Software platforms that can help your TEM process

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- Expense management

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 – Accounting software

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 – Travel Management Software

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 Receipts OCR & Expenses – Receipts Scanners

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).

Steps to start managing your travel expenses

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:

• First, implement a system that lets you track expenses in real-time and automatically create reports for approval and accounting. In other words, make sure that all your employee travel expenses are entered into a centralised system. This will allow you to track spending and identify areas where you can save money or enhance the experience for employees.
• The second step is to re-evaluate finance-related travel policy. It’s important for employees to know what is expected of them when they travel on company business. This includes who pays for various expenses, what types of expenses are covered, and how much leeway they have in choosing their own travel arrangements. Your policy should also be reviewed annually or when changing seasons affect the way that employees travel.
• The third step is to collect and secure information on your corporate cards. You can use this information to create a better process for approving expenses, as well as more accurately tracking spending habits across the board. This will also help you prevent unauthorised access to any sensitive data related to financial transactions made using these cards.
• The fourth step is building a solid travel approval process that helps you and your employees. This process should include clear guidelines on what types of trips require approval, how much money employees can spend without approval, etc. It should also be transparent so that everyone knows what is expected of them at all times during the trip planning process 
• Finally, do not forget to consult your team about their views on how they want their travel expenses managed. Ask if they have any questions or concerns about the program and let them know what will be expected of them once it is implemented. You should also discuss how they might benefit from using the solution you plan to implement.

How TruTrip can help

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.

Get the help you need to set up a solid travel expense management process

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.