Expense Management in Corporate Travel: How Does it Work?
Whether you have 5 employees who frequently travel for business or 500, expense management in corporate travel is a huge undertaking. There’s the flights, accommodation, and transport costs to keep on top of, not to mention a never-ending list of other travel related expenses and policies.
Despite its drudgery, expense management is a vital part of corporate travel for businesses both big and small. In this guide, we explain everything there is to know about business travel expense management, including how it works, why it’s important, and how you can automate the entire process for ultimate efficiency.
Table of Contents
- What is Expense Management in Corporate Travel?
- Why is Corporate Travel Expense Management Important?
- The Corporate Travel Expense Management Process
- Automating Business Travel Expense Management for Better Efficiency
What is Expense Management in Corporate Travel?
In a business, expense management refers to how employee expenses are enforced and tracked, as well as how the incurred costs are reimbursed. Therefore, when applied to corporate travel, it is the process of managing costs incurred from business related travel.
What does corporate expenses normally include?
Corporate expenses can normally include the following:
Airfares and baggage costs
Transport fees (i.e. train, bus, taxi, or ride-sharing)
Car hire costs and associated fees (i.e. tolls, fuel, parking)
Food and beverages when staying overnight
In large organisations, this job might fall to a dedicated travel manager. In small-to-medium companies, however, expense management tasks are often the responsibility of the finance department.
There are many different methods for managing corporate travel expenses among employees, however, the most popular to-date is through dedicated expense management software.
Why is Corporate Travel Expense Management Important?
Expense management in any form is vital for businesses, as it allows them to combat excess spending and keep on top of their budget. Travelling is never cheap and if businesses aren’t careful, it can significantly eat into their bottom line.
Establishes ground rules for employees
Managing business travel expenses also establishes ground rules for how employees arrange business trips, thus ensuring travel and expense policy compliance. Furthermore, correct expense management processes allow businesses to keep an organised record of travel related receipts, review expense trends, and prevent employee expense fraud.
Ensures employees never lose money
Another important aspect to expense management in corporate travel is that it ensures employees are never out of pocket for costs incurred while travelling on the job. Failure to reimburse costs in a timely manner can lead to resentment and distrust among workers. An effective expense management process, however, combats this issue.
The Corporate Travel Expense Management Process
So, how does expense management in corporate travel work? Let’s break the process down into its most simple steps.
Travel expenses are reported by employees
Managers, or those in charge of approving these expenses, verify and validate the reported expenses
The finance department audits the expense reports for compliance to the company’s policies
Employee expenses are processed and reimbursed
Records of these expenses, including receipts and reports, are kept on-file for external audits
In the past, finance departments had to reply on labour-intensive expense management processes, such as physical filing systems, storage of paper receipts, and the manual input of data into spreadsheets.
As you can imagine, this outdated method of corporate travel expense management had its shortcomings. Not only was it impossible to store so many physical copies of this information, but human error and lost receipts were also rife. With complex processes, it’s also difficult to get employees on-board, resulting in too many expense rejections or non-compliance.
Automating Business Travel Expense Management for Better Efficiency
The digital era has allowed the management of business travel expenses to become much easier, thanks to automation. Expense management software such as ExpenseIn contains easy-to-use features which take the hard work out of managing business travel expenses.
With a receipt scanning feature, employees can create and submit travel expenses in seconds. This allows the finance department to save time and skip the monotonous data extraction, whilst reducing the possibility of human error. Users can even forward email receipts straight to ExpenseIn, letting the software automatically create an expense report ready for submission.
Automated policy checks
With automated policy checks, ExpenseIn cuts down on expense rejections, thus reducing manager workload and speeding up reimbursement time. The software also increases expense policy awareness by enforcing employees to accept policies before they submit their expenses. This keeps all employees on the same page regarding travel expense policies.
Integrates existing financial software
ExpenseIn even integrates into a company’s existing financial software, which is particularly helpful come tax time. Plus, with advanced approval assignment, automatic approval alerts, and seamless delegation, managing corporate travel expenses has never been so quick or easy.