Travel expense management is all about maintaining control over the expenses that our employees incur during business travel. Our list of best practices for travel expense management will help you identify cost savings opportunities in your travel expense management program while increasing the efficiency and care with which you organize travel for your business.
12 Best Practices for Travel Expense Management from Top Finance Leaders
We've divided our list into four topics - compliance, manual labor, approval time and cost - that represent the four major challenges organizations face in travel expense management.
Identify Gaps in Your Travel Expense Management Policy
If your organization is struggling to manage travel expenses, it might be a good idea to review your existing travel management document for any gaps in your policy. Your travel management policy should include clear guidelines and exclusions for every category of travel expense, including:
Airfares and ground transportation
Hotels and accommodation
Mobile phones and internet
Ensuring that your list of non-reimbursed expenses is comprehensive and up-to-date and outlining procedures for expense reporting and reimbursement will help reduce your spending and keep travelers accountable for reporting all of their expenses on time and through the appropriate channels.
Make the Process User-friendly
Ease-of-use is a critical aspect of travel compliance that organizations often overlook. You need to make it easy for your traveling employees to create and modify bookings, submit expense reports, and track their receipts. A travel expense management software solution should be positioned as a valuable tool for streamlining the travel process and making life on the road easier for employees, as well as a cost-reduction mechanism.
Manage Exceptions and Maintain Flexibility
We want our employees to comply with our corporate travel policies 99% of the time, but it's important to have processes in place for the 1% of the time where an exception makes sense. Travel managers need the flexibility to make those exceptions along with a streamlined process for escalating an exception request when a higher level of approval is needed.
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Invest in Travel Expense Management Software
As organizations increase in size, they spend more on travel and that means more flights to book, more rail tickets to purchase, more hotels, more meal receipts and more expense reports to process. For businesses that rely on manual data entry and calculations to deal with all of this data, the paperwork quickly begins to pile up faster than it can be processed.
To meet your most optimistic financial targets for travel expense management, there is a constant need to find process efficiencies that reduce manual labor and drive productivity. A travel expense management software tool can help you stay organized and complete bookings and approvals more efficiently.
Choose a Travel Booking Solution with Integrated Expense Management
If you're choosing a software tool that helps with corporate travel bookings and management, a great feature to watch out for is integration with your existing expense management application. Organizations can connect the Deem Travel application with an expense platform such as Chrome River, Infor, Certify, Coupa, Deltek, Workday and more to automate the creation of an expense report with attached itinerary details and corresponding receipts.
Software integrations save time and money for your organization by relieving your department staff from manual data entry work that can be time-consuming and generate errors.
Automate Compliance and Streamline Data Collection
Corporate online booking tools like Deem Travel can be customized to align with your corporate travel policy, ensuring that travelers are only able to book flights and accommodations that are in compliance. When travelers use the tool, compliance is automated and there is no need for a travel manager to review every booking and expense item to ensure that it meets the guidelines of your travel policy.
Employees also benefit from streamlined reporting processes for things like flight and meal receipts. Instead of having employees save their paper receipts, make it easy for them to scan and digitize their receipts directly into an expense report. An efficient process improves speed of adoption and drives improved ROI for your travel management program.
Understand the Implications of Slow Approvals
A slow or inefficient process for approving travel expenses can have significant negative consequences on your travel budget. If your travel manager takes seven days to approve an itinerary, the price of airfare and hotels may have increased substantially in the mean-time. Delays between receiving expense reports and processing reimbursement can also affect legally mandated financial reporting requirements. Finally, slow approvals leave employees out-of-pocket, which some of them may not appreciate.
Ultimately, there are plenty of reasons why it's important to nail down a consistent process for approving expenses.
Look for Administrative Bottlenecks in the Approval Process
To find efficiencies in the approval process, take a hard look at the time and resources consumed in every step. If your employees are still using manual processes to keep track of receipts and calculate reimbursements, there's plenty of room for improvement.
Today's travel booking software lets employees use their mobile device to scan receipts directly into their expense report, where their compliance status can be determined through automated processes. Once a report is created, it is immediately available for travel managers to review and approve. Your corporate travel policy should define how reimbursement payments are made and establish a regular schedule and timeline for paying reimbursements.
Use Automation for Multi-layered Approvals
Some organizations believe that multi-layered approvals are bureaucratic and inefficient, but there is certainly a time and place where it can be useful to have multiple layers of approval. You might have executive travelers where you just want the travel manager to make sure their needs are being met, but you might also have a business development team that pays for sales travel from its own department budget. In that case, you might want to have a sales manager approve travel expenses for team members before they are reviewed by the travel manager.
Multi-layered approvals give you the flexibility to customize your approvals workflow as needed.
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Cost of Travel Expense Management
Maintain a Structured Process for T+E Management
The key to implementing effective T+E management that's cost-efficient is to focus on maintaining strict processes. To that end, a corporate travel policy needs to go beyond simply describing which types of travel expenses the organization will pay for and which ones it won't - it should clearly delineate all of the processes necessary to ensure that the expense management process runs as efficiently as possible.
Executive buy-in and leadership is instrumental in creating accountability around new T+E management processes, so it's important to get your CFO involved in training and on-boarding activities for any new implementations.
Generate Savings through Your Corporate Travel Booking Tool
We want to be able to run our expense management programs at a low price point, but sometimes we can actually find those savings by accessing more affordable booking options for airfare and hotels. Choosing an online travel booking tool with extensive GDS integrations (such as Deem Travel, which is integrated with Sabre, Apollo, WorldSpan, Galileo and Amadeus) helps to ensure that you're getting the most selection and the best price available on every booking.
Monitor Spending and ROI to Drive Continuous Improvement
Imagine what would happen if you set your travel policies today and never changed them again. What would happen after five years? Would you still be happy with the policies you created? One thing you'll notice is that with global travel increasing in cost each year, you'll need to steadily increase your spending limits to maintain quality standards for your employees.
Your corporate travel policy should never be set in stone. You should monitor trends in spending over time to discover the best ways to modify and update the policy over time. The policy should be subject to change that reflects changes in the environment and the changing needs of your travelers.
Deem's corporate travel booking tool makes it easy for companies to save on business travel. Follow our best practices for travel expense management and you too can reduce your travel spending and meet performance targets for your travel expense management program. Request a demo and learn more about how Deem supports travel expense management optimization for businesses of every size.