International expansions, business mobility and globalization contribute to increased travel expenses for many companies. These challenges frequently fall under five primary categories, and you need to overcome them to regain control over the company's expense accounts.
1. Unclear Travel Expense Policies
Travel expense policies may be confusing or difficult to understand. If employees don't know exactly what falls under an acceptable payment, then they have no way to avoid running into issues.
Common travel costs, such as hotel and food, should be clearly written out. If your organization has a partnership with specific chains or a preferred list of businesses, provide a convenient reference sheet to save time and reduce complexity. Some employees look for low-priced hotels to save money but end up paying more than they would with the partner company.
A mobile app containing this information would work out the best for your business travelers. Employees should be able to quickly pull up the relevant policies and information so they don't end up in a situation where they're under suspicion of padding their reports. In many cases, they simply lacked the data necessary to make an informed decision.
2. Poor Expense Visibility
Do you know the top spending categories in the travel expense accounts? How about the average amount an employee pays for food every day during a business trip? If you lack visibility into this data, you face major hurdles during an auditing and optimization process.
Your current system may be insufficient to display the data in useful forms. For example, if you can only view a limited set of reports, you may miss out on important insights. Information from other databases may shed additional light onto particularly tricky situations, but only if you have a way to pull this data into your accounting system. For example, you may see unusual purchases in an employee's report. If your expense system could integrate with other applications, you would see that the employee had to go to an urgent care clinic and pick up antibiotics for a sudden illness.
Structure your reporting so you can quickly pull up a wide variety of reports. You shouldn't need to click on multiple programs to compare data sets or figure out why the numbers seem off. A single panel view gives you an at-a-glance look at the most important metrics.
3. Inefficient Processes
Are you entering expense information into a spreadsheet? Manual processes make it difficult to stay on top of the incoming costs, particularly if you have hundreds of employees sending their information. This problem gets even worse if you handle paper receipts, as they may be hard to read or provide an incomplete record into the costs.
You need an overhaul of your travel expense management processes to overcome this roadblock. Throw out the spreadsheets and get an automated system in place to eliminate your data entry. Streamline how employees enter expenses so you don't have to see another paper receipt again. The process should be quick, easy and intuitive for both sides. Some of our favorite applications include Expensify, Tallie, Concur and Nexonia.
4. Delayed Employee Reimbursement
How long does it take to approve or deny employee reimbursement? If you handle travel expenses after the fact, you don't want to leave staff waiting to get their money back. You could end up with people refusing to go on business trips or building up resentment with the organization.
Many factors lead to delayed employee reimbursement, from waiting too long to process an expense report to missing key information. Audit your current process and look for the problems that contribute to the speed issues. You may need to limit the time that employees can submit the necessary paperwork or have a list of fast approval expenses.
For example, if you have an amount for hotel and food costs that always get approved, you can automate these reviews. The system takes care of those employees for you, so you have the time to look at the special cases. By limiting the amount of hands-on work you need to do, you can improve the efficiency of reimbursement. Finally, by employing a bill management system such as our personal favorite, Bill.com, you can expedite the reimbursement process via ACH directly into your employees' accounts.
5. Overlooking Employee Travel Expense Trends
A spreadsheet or similar system reduces your data visibility to a single point in time. You have no way to tell if an employee's expenses are atypical to their normal pattern because you can't see the other puzzle pieces in the picture. Some employees may be padding their accounts slowly or have unexpected expenditures.
You need to compare historical trends to the company and individual employee average. A robust accounting system gives you the necessary information and shows you where to begin your investigation. You can quickly look at different trips and determine whether inflation is naturally bringing up the costs or the employee is going right along the edge of allowed expenses.
Effective travel expense management is a tricky process, especially if you have outdated or inefficient systems lying underneath. By identifying your problem areas and putting the right solution in place for each, you can improve the way your organization addresses travel expenses.