There are a lot of things to think about when you’re planning a trip. Where will you go? How will you get there? What will you do when you’re there? And, of course, how will you pay for everything? That’s where travel and expense management comes in. Travel and expense management is all about making sure your travel expenses are paid for in a way that is both efficient and compliant with your company’s policies.
There are a few different ways to manage your travel expenses. You can use a travel management company, you can do it yourself, or you can use an expense management software.
Importance Of Travel And Expense Management For Businesses
The process of regulating the corporate travel budget in order to have insight over expenditures and proactively cut them is known as travel and expense management or T&E. Organizations also develop a travel and expenditure policy to inform employees of how much they can spend and on what in order to establish how these costs will be controlled.
In the US, a business trip typically costs $1,286. Typically, 34% of that goes in accommodation, 27% on airfares, 20% toward meals, and 19% toward auto rentals. In addition, there are costs for conferences and client entertainment.
Take into account all the resources used for organizing, monitoring, filing expense reports, and finally, reimbursements. Organizations are digitizing their TEM activities by implementing corporate travel software from off-the-shelf vendors and specialized travel management providers in order to prevent contributing to that enormous growth.
5 Stages Of Travel And Expense Management
Here are the five stages of travel and expense management
1. Travel Request
Consider a portal where your staff members can submit requests for business trips to get started. Most employee information, including name and reporting manager, may be pre-filled on this form. Only information relevant to the trip they’re about to take must be entered by employees.
2. Travel Request Approval
Employee requests are sent to one or more people for approval after they are submitted. In situations like these, having a clear corporate travel management policy is useful. You have the option to automatically approve travel requests based on particular standards. Perhaps the drawn-out approval procedure is not necessary for a one-day local excursion.
3. Expense Report
Employees can photograph and upload expense receipts as they come in. They come back much faster because of this. They just need to submit their expenses and make sure they don’t go against the business travel policy. Even digital copies of receipts can be used with finance management tools to extract data and classify expenses.
4. Expense Approval
You can make sure that key information reaches the appropriate person at the appropriate time by setting up an approval hierarchy. In some circumstances, you can even decide to automatically approve expense requests.
Reimbursement is the final stage in the travel and expense management process. After approval from the finance team, You can set up an automated travel reimbursement system so that the funds are directly transferred to the employee’s bank accounts.
It’s no secret that corporate travel can be a significant expense for any business. That’s why it’s so important to have a good travel expense management system in place.
There are a number of reasons why travel expense management is so important. First, it can help you keep track of your spending and make sure that you are staying within your budget.
Second, it can help you get the most out of your travel dollars by making sure that you are only spending on necessary expenses. Lastly, it can help you avoid potential problems down the road by making sure that all of your travel expenses are properly documented and accounted for.