How Best Practices for Travel Expense Management Can Benefit your Business

ANUSREE BHATTACHARYA | December 10, 2020 | 586 views

As every department is going through digital transformation in travel companies, finance processes are no exception. The advancements in technology are influencing how travel expense management is evolving. Technology is widely affecting how travel expenses are captured, submitted, audited, processed, and reimbursed. The automated travel expense management is helping most of the corporate travel companies with inclusion of the latest travel management and expense management tools.

In 2016, the share of corporate travel expense management was US$1.3 trillion; therefore, by 2023, it is predicted to hit US$1.6 trillion. Companies today are rethinking modern travel expense management policy and developing corporate travel expense management system including expense management best practices. They are actively using travel management and expense management tools to create a smoother workflow.

Looking at these developments in expense management policy, it’s important to understand what companies were facing before implementation of automated version of expense management system.

Main Hurdles While Managing Travel and Expense

  • Policy violations
  • Multiple layers of forms
  • Delayed submission of expense reports by employees
  • Increased processing cost
  • Lack of visibility into the process

Heaps of productive hours were wasted because of the manual processes involved in the expense management policy. Managing the excel reports and cross-verification for policy compliance resulted in increased costs. Delayed submission of expense reports caused late input tax credit claims, which affected businesses to generate revenue. Consequently, to minimize the hurdles of managing travel expenses, an automated travel expense management system, and some best practices for travel expense management were the need of the hour.

An Overview: Modern Travel Expense Management

Modern travel and expense management systems and its practices help employees manage the financial process in real and measurable ways. The system governs how the finance team spends company money on corporate travel and other related expenses. It includes an automated expense management process, which has drawn attention to seamless receipt generation, auditing, reimbursing, submission of finance reports, and cost savings.

To implement modern travel expense management, some best practices for travel expense management are suggested to help build a consistent workflow. Many corporate travel companies have included it to automate the expense management process but are little aware of practices that can enhance their workflow. In this scenario, it's important to know the importance of including the best practices for travel expense management.

Why Talk about Best Practices for Travel Expense Management?

In the finance department, various types of frauds such as multiple reimbursements, overstated expenses, fictitious expenses, and more always stay at the top of the mind for most CFO’s. A well-controlled travel expense management system helps prevent misuse of company assets and prohibits misconduct from dealing with such situations.

According to the Aberdeen group’s research, 43% of top travel companies and their CMOs consider T&E management a critical strategy for their company to handle travel expenses. In comparison, 48% of them say they “need to reduce expense processing costs,” which is why they implemented best practices for travel expense management.

Whether large or small, companies realize the potential benefits of a well-managed travel spend mechanism that had best practices for travel expense management to automate the expense management process. They invested heavily in expense management software, which helped them frame a consolidated expense management policy.

In the end, corporate travel policy best practices need to be tailored specifically to employees to create best-in-class expense management and improve performance. By following expense management best practices, you can also define and implement an accurate policy and ensure your employees implement potential tools to automate the expense management process. This will create an efficient finance process that will lead to a friction-free travel and expense management system. If you are updating your finance functions, this small expense management guide to the best practices for travel expense management will help you far to reach your goals.

Best Practices for Travel Expense Management

Create Ownership of the Policy

Before you start implementing T&E management as a critical strategy, defining ownership of the policy clearly is crucial. Ideally, your finance team needs to understand it thoroughly while using the best expense management software. Creating ownership of the policy will benefit as follows:

First: You will have clear ownership that will ensure that your finance team tracks the policy accurately and makes necessary changes to cater to corporate travelers and their requirements.

Second: Your employees will be able to address queries and concerns related to corporate travel a defined way. This way it will become easier for them to handle multiple queries at a time and cater to possible services.


Include Simple Policies

Your expense management policy should outline what it is accurately. It can only be practiced if you keep policies simple based on the company’s culture and its budget. Using the right travel management and expense management tools, your company’s travel expense management mechanism will be quick and easy for employees to work on expenses claimed by corporate travelers, submit, and audit them. Including simple policies will help employees track receipts through mobile applications and even upload them immediately. This entire process will help minimize errors and lessen receipt loss possibilities.


Accurate Expense Reporting

To include accurate expense management reporting is considered one of the most successful best practices for travel expense management. Around 30% of CFOs believe that to review expenses reporting for policy violation is the biggest pain point. As you automate the expense management process, the mechanism of expense reporting and expense claim management also gets smarter. There are multiple benefits to have a sound reporting system.
  • It gives budget creators a better understanding of how a specific travel expense budget is consumed.
  • Finance teams get a proper structure and create a defined spending pattern to identify transactions so that there are no fraud possibilities in the management system.
  • The reports under expense reporting become accountable because the total spends are available to senior management for a broad review.


Expense Payments Are Timely Processed

The right expense management software usage can help your employees process expense payments on time and faster to reduce errors. By implementing this expense management best practice, your employees can present expense reports timely to managers. An automated expense management system eliminates the tedious job of manually checking expense payment violations and encourages initiating flawless expense payment processing.


Creates Accountability

To keep accountability in expense management is vital for a finance manager. The automated travel and expense management system creates an opportunity to enable accountability option for your company’s expense plan so that managers are made aware of the transactions, submission of reports, expense claims, reimbursements, and more that are taking place. In order to gain high accountability in these areas, the new travel expense management process provides easy access to review and gives appropriate reports. You can easily implement this corporate travel policy best practice to your system and keep a check using expense management software that provides access via mobile applications. Practicing this will give your finance team more power and guide them to generate better revenue annually.


Conduct Regular Audits

By implementing this as best practices for your travel and expense management, you can efficiently conduct regular audits of the travel expense. Many CMOs have followed it and attained success while implementing it. Similarly, a regular audit also identifies areas of improvement and can point variances that could generate exemplary revenue. Practicing this in your finance process will also help uncover expense fraud. In this case, the Association of Certified Fraud Examiners’ (ACFE) reveals, 20% of small businesses and 13% of larger firms reported fraudulent expense reimbursements in 2019. The activities that were highlighted as
  • Access expenses
  • Non-characterized expenses
  • Fictitious expenses
  • Multiple reimbursements for the same expense

After putting your time and effort into recreating a new travel and expense management system and inculcating best practices for travel expense management in your company, it is crucial to choose the right ways to enforce it. Consistent use of best practices for travel expense management will let you save costs, and there will be no adverse impact on your company's budget. You can make effective decisions for your business as it eradicates your finance team's hurdles that were before.

Frequently Asked Questions

What is a travel and expense policy?

A travel and expense policy is a set of rules that covers the process of reimbursement and claims for expenses that are incurred by employees on corporate travel plans. This policy outlines how a company’s employees should set procedures for corporate travel.

What is business travel management?

Business travel management includes policies that set a company’s function in a strategic way. It includes various types of contracts made with airlines, hotel chains, rental car companies, and other business travel related management services.

What is expense management?

Expense management works according to two key elements—how a business pays for employee-initiated expenses and how to track all employee-initiated spending. In this, management of costs is included mainly for corporate travel, accommodation, meals, flights, and car rentals.

What is expense management automation?

Expense management automation encourages services like collection, storage, submission, reporting to function automatically. It implies the use of analytical tools to help companies maintain accountability and compliance through accurate tracking and reporting process.

Spotlight

AAA Travel

African Ample Assistance (AAA Travel) is an independent, inbound tour operator based in Cape Town, South Africa. AAA Travel has been one of the leading inbound tour operators in Southern Africa since 1997. We are well-known for our unique service, personal attention and creative travel ideas. If you can dream it – we can do it.

OTHER ARTICLES
BUSINESS TRAVEL

Which Technologies Are Transforming Travel in 2020?

Article | August 4, 2021

Like most industries, the travel and tourism sector is experiencing a tech revolution. Innovative new technology is disrupting old methods and transforming the shape of the industry. In fact, the travel and tourism sector is in a significant growth period, mostly driven by tech advancements. Certainly, tech has been the driving force behind making it easier for people to access travel. Of course, the notion of technology reshaping industries is something that is happening across sectors. When looking at how tech is changing travel, we can also see similar movements in other areas of business. For example, the gambling industry is being driven into interesting new areas by technology, with sites like bet-ny.com providing a full casino experience online. This push has allowed people to access betting in innovative new ways and from anywhere at any time, provided they have an internet connection.

Read More
TRAVEL TECHNOLOGY, BUSINESS TRAVEL

Why tourism providers are still working on travel personalisation

Article | July 20, 2022

It should come as no surprise that even as we enter the new decade, industries such as retail and travel are seeing continued investments in digital platforms and solutions aimed at delivering hyper personalisation. The reason is that millennials have risen in purchasing power, becoming the dominant driver of business and growth. Any business that market its products or services to this audience must adapt and develop innovative approaches to address dramatic shifts in customer behaviour, as well as the demands for mobile and social media.

Read More
BUSINESS TRAVEL

Travel tech pros put sustainability behind economy as key challenges for 2020

Article | June 3, 2021

Economic uncertainty is deemed to be the biggest challenge facing the travel industry, ahead of climate change and sustainability issues, according to new research. A survey by Travel Technology Europe, sister brand of PhocusWire, reveals that 53% of those polled put economic conditions at the top of the list of concerns followed by sustainable travel at 45% and climate change at 44%. The study was carried out in the run-up to the United Kingdom's general election in early December 2019, so the challenge of economic uncertainty is not that surprising.

Read More

FlightHub & JustFly on robots and travel

Article | February 10, 2020

Over the past decade the travel industry has seen waves of technological trends: mobile booking, voice search, augmented reality, and more. The use of robots in travel is one such trend. It’s changing the way people travel and taking the world literally by storm. The potential impact of robots on the tourism and hospitality sector can’t be understated. Chatbots, programmable suitcases, and security bots are a few examples of how robots may be changing the way travelers navigate the globe forever. FlightHub and JustFly discuss why robots are a technological trend the travel industry should look forward to.

Read More

Spotlight

AAA Travel

African Ample Assistance (AAA Travel) is an independent, inbound tour operator based in Cape Town, South Africa. AAA Travel has been one of the leading inbound tour operators in Southern Africa since 1997. We are well-known for our unique service, personal attention and creative travel ideas. If you can dream it – we can do it.

Related News

BUSINESS TRAVEL, AIRLINES AND AIRPORTS

Avelo Airlines Reports Strong Booking Trends from Delaware Valley

Avelo Airlines | January 19, 2023

On January 18, 2023, Avelo Airlines reported strong booking trends before the much-awaited introduction of the airline's base at Wilmington Airport (ILG). This launch will take place on February 1, and from that date onwards, the company will offer nonstop flight services to Florida from the most convenient location in Delaware Valley. Andrew Levy, Chairman and CEO at Avelo Airlines, said, "With 14 days to go, we are very encouraged by the initial demand from across the four-state Delaware Valley region. We are seeing strong booking trends across all five Florida destinations Avelo will serve from Wilmington. It is clear there is a lot of excitement about the convenient, affordable and reliable service Avelo is bringing to the region." (Source – Cision PR Newswire) With Avelo's ILG base opening in two weeks, the airline plans to provide nonstop flights to five popular destinations in Florida: Fort Myers, Fort Lauderdale, Tampa, Orlando, and West Palm Beach. In addition, Avelo will run a special inaugural flight on February 1 from Wilmington to Orlando International Airport (MCO), the busiest and most convenient airport in Central Florida, to mark the opening of its ILG base. The company will begin by placing one Boeing Next-Generation (NG) 737 at ILG along with 35 Crewmembers (employees), including pilots, aircraft technical operations and maintenance, airport customer service, flight attendants, and supervisors. In the United States, Avelo now offers service to 34 locations. By operating on overlooked routes to underserved communities across the nation, the airline has ushered in a new era of choice, convenience, and competition in air travel. About Avelo Airlines Founded in 2020, Avelo Airlines was established with a simple goal - Inspiring Travel. Through its Soul of Service culture, the airline keeps people at the heart of everything, allowing customers to save time and money, avail low everyday fares, and experience refreshing convenience. Avelo operates a fleet of Boeing Next-Generation 737 aircraft and serves 34 popular locations across the United States, with five bases: Tweed-New Haven Airport in Southern Connecticut (HVN), Hollywood Burbank Airport in Los Angeles (BUR), Orlando International Airport (MCO), Raleigh-Durham International Airport (RDU), and Wilmington Airport in the Delaware Valley (ILG).

Read More

AIRLINES AND AIRPORTS, INDUSTRY OUTLOOK

FLYR Partners with Azul to Optimize Revenue Management

FLYR Labs | January 30, 2023

FLYR Labs, an Artificial Intelligence (AI)-driven forecasting, pricing, and commercial-wide decision-making solutions provider, recently partnered with Brazilian airline Azul to implement FLYR's advanced AI technologies. The technologies will enhance the airline's revenue management strategy, beginning with fare bundles and ancillary product optimization, addressing the growing customer demands. FLYR will provide Azul with comprehensive pricing, data management, and forecasting capabilities that enable personalized offers for customers to assist the airline in achieving its goal of allowing total revenue management and dynamic offer optimization. Azul's primary source of profit is the sale of ancillary products such as priority boarding, seat selection, luggage, and fare families. The AI-based Revenue Optimization solution offered by FLYR combines all available historical and real-time data with deep learning algorithms to determine the ideal pricing and distribution strategy. The solution from FLYR will enable Azul to provide real-time prices for each customer's shopping request or as a scheduled continuous price. This allows the airline to provide travelers with the right ancillaries at the perfect price, with little change to the present shopping infrastructure. It also predicts anticipated revenues for each flight, all within an intuitive user interface. Since its start in 2008, Azul has been the fastest-growing airline in Brazil, and it now has the country's largest airline network in terms of cities served, with flights to over 150 destinations. Alex Mans, Founder and CEO of FLYR, commented, "We're excited to partner with Azul and harness the power of AI to improve their revenue management and offerings for customers." He added, "The limitations of legacy technology mean airlines have historically struggled to understand how changes in fares can affect ancillary revenues. Through our partnership, we will provide Azul with a crucial competitive advantage when it comes to boosting profitability and enhancing the customer experience." (Source – GlobeNewswire) About FLYR Labs Based in Santa Monica (California), FLYR Labs provides airlines with the intelligence and insight they need to make the best-informed decisions through its proprietary Revenue Operating System. Its vertically integrated platform combines data, forecasting, reporting, pricing, and simulation capabilities into a "single pane of glass" that informs and automates all commercial functions. The company solves complex problems with brilliantly engineered solutions that rely on end-to-end Managed Data Infrastructure and deep learning (AI) to assist leading airlines worldwide in achieving their full potential.

Read More

DESTINATION AND TOURISM, COMMERCIAL TRAVEL

KAYAK and Affirm Team up to Help Travelers Book Now and Pay Later

KAYAK | January 27, 2023

KAYAK, the leading search engine for travel, recently announced that it has partnered with Affirm, a payment network, to make its payment operations flexible and to empower its travelers in the United States. According to KAYAK search data, flight prices are rising by about 40% per year. Despite increased flight prices, travelers are still searching for flight bookings in 2023. With Affirm, KAYAK is making it easier for travelers to plan and pay for their trips this year. Now, approved KAYAK travelers can split the cost of flights, hotels, car rentals, and car sharing over $150 into monthly payments by choosing Affirm when they check out. Thus, KAYAK can reach 15 million of Affirm's consumers and 245,000 merchants, including American Airlines, Priceline, Vrbo, Vacasa, and more thereby, enhancing its new reach, overall sales, repurchase rates, and average order value. Paul Jacobs, General Manager and Vice President of KAYAK North America, says, "It's good to have choices, especially in this economy. In addition to showing travelers all their options on KAYAK, Affirm gives travelers the ability to plan how they pay." (Source – Business Wire) Geoffrey Kott, Chief Revenue Officer at Affirm, remarks, "This past fall, Affirm's consumers increased purchases at airlines over seven times compared to the prior year, demonstrating higher consumer demand for payment flexibility when booking travel." He adds, "By partnering with KAYAK, we are able to bring consumers a flexible and transparent way to pay for travel, especially at a time when many are looking for ways to regain financial control and spending power amidst rising costs." (Source – Business Wire) About KAYAK: KAYAK is part of Booking Holdings Inc, one of the world's most prominent search engines for travel. It helps people find the vacation package, hotel, rental or shared car, and flights they want. The company enables travelers to search for the best flight deals and book with flexibility, as it's pretty reliable and completely free to use. With trip planning tools like a flight tracker, trip planner, and bag measure, KAYAK ensures that travelers' overall experience is more than just a flight search site!

Read More

BUSINESS TRAVEL, AIRLINES AND AIRPORTS

Avelo Airlines Reports Strong Booking Trends from Delaware Valley

Avelo Airlines | January 19, 2023

On January 18, 2023, Avelo Airlines reported strong booking trends before the much-awaited introduction of the airline's base at Wilmington Airport (ILG). This launch will take place on February 1, and from that date onwards, the company will offer nonstop flight services to Florida from the most convenient location in Delaware Valley. Andrew Levy, Chairman and CEO at Avelo Airlines, said, "With 14 days to go, we are very encouraged by the initial demand from across the four-state Delaware Valley region. We are seeing strong booking trends across all five Florida destinations Avelo will serve from Wilmington. It is clear there is a lot of excitement about the convenient, affordable and reliable service Avelo is bringing to the region." (Source – Cision PR Newswire) With Avelo's ILG base opening in two weeks, the airline plans to provide nonstop flights to five popular destinations in Florida: Fort Myers, Fort Lauderdale, Tampa, Orlando, and West Palm Beach. In addition, Avelo will run a special inaugural flight on February 1 from Wilmington to Orlando International Airport (MCO), the busiest and most convenient airport in Central Florida, to mark the opening of its ILG base. The company will begin by placing one Boeing Next-Generation (NG) 737 at ILG along with 35 Crewmembers (employees), including pilots, aircraft technical operations and maintenance, airport customer service, flight attendants, and supervisors. In the United States, Avelo now offers service to 34 locations. By operating on overlooked routes to underserved communities across the nation, the airline has ushered in a new era of choice, convenience, and competition in air travel. About Avelo Airlines Founded in 2020, Avelo Airlines was established with a simple goal - Inspiring Travel. Through its Soul of Service culture, the airline keeps people at the heart of everything, allowing customers to save time and money, avail low everyday fares, and experience refreshing convenience. Avelo operates a fleet of Boeing Next-Generation 737 aircraft and serves 34 popular locations across the United States, with five bases: Tweed-New Haven Airport in Southern Connecticut (HVN), Hollywood Burbank Airport in Los Angeles (BUR), Orlando International Airport (MCO), Raleigh-Durham International Airport (RDU), and Wilmington Airport in the Delaware Valley (ILG).

Read More

AIRLINES AND AIRPORTS, INDUSTRY OUTLOOK

FLYR Partners with Azul to Optimize Revenue Management

FLYR Labs | January 30, 2023

FLYR Labs, an Artificial Intelligence (AI)-driven forecasting, pricing, and commercial-wide decision-making solutions provider, recently partnered with Brazilian airline Azul to implement FLYR's advanced AI technologies. The technologies will enhance the airline's revenue management strategy, beginning with fare bundles and ancillary product optimization, addressing the growing customer demands. FLYR will provide Azul with comprehensive pricing, data management, and forecasting capabilities that enable personalized offers for customers to assist the airline in achieving its goal of allowing total revenue management and dynamic offer optimization. Azul's primary source of profit is the sale of ancillary products such as priority boarding, seat selection, luggage, and fare families. The AI-based Revenue Optimization solution offered by FLYR combines all available historical and real-time data with deep learning algorithms to determine the ideal pricing and distribution strategy. The solution from FLYR will enable Azul to provide real-time prices for each customer's shopping request or as a scheduled continuous price. This allows the airline to provide travelers with the right ancillaries at the perfect price, with little change to the present shopping infrastructure. It also predicts anticipated revenues for each flight, all within an intuitive user interface. Since its start in 2008, Azul has been the fastest-growing airline in Brazil, and it now has the country's largest airline network in terms of cities served, with flights to over 150 destinations. Alex Mans, Founder and CEO of FLYR, commented, "We're excited to partner with Azul and harness the power of AI to improve their revenue management and offerings for customers." He added, "The limitations of legacy technology mean airlines have historically struggled to understand how changes in fares can affect ancillary revenues. Through our partnership, we will provide Azul with a crucial competitive advantage when it comes to boosting profitability and enhancing the customer experience." (Source – GlobeNewswire) About FLYR Labs Based in Santa Monica (California), FLYR Labs provides airlines with the intelligence and insight they need to make the best-informed decisions through its proprietary Revenue Operating System. Its vertically integrated platform combines data, forecasting, reporting, pricing, and simulation capabilities into a "single pane of glass" that informs and automates all commercial functions. The company solves complex problems with brilliantly engineered solutions that rely on end-to-end Managed Data Infrastructure and deep learning (AI) to assist leading airlines worldwide in achieving their full potential.

Read More

DESTINATION AND TOURISM, COMMERCIAL TRAVEL

KAYAK and Affirm Team up to Help Travelers Book Now and Pay Later

KAYAK | January 27, 2023

KAYAK, the leading search engine for travel, recently announced that it has partnered with Affirm, a payment network, to make its payment operations flexible and to empower its travelers in the United States. According to KAYAK search data, flight prices are rising by about 40% per year. Despite increased flight prices, travelers are still searching for flight bookings in 2023. With Affirm, KAYAK is making it easier for travelers to plan and pay for their trips this year. Now, approved KAYAK travelers can split the cost of flights, hotels, car rentals, and car sharing over $150 into monthly payments by choosing Affirm when they check out. Thus, KAYAK can reach 15 million of Affirm's consumers and 245,000 merchants, including American Airlines, Priceline, Vrbo, Vacasa, and more thereby, enhancing its new reach, overall sales, repurchase rates, and average order value. Paul Jacobs, General Manager and Vice President of KAYAK North America, says, "It's good to have choices, especially in this economy. In addition to showing travelers all their options on KAYAK, Affirm gives travelers the ability to plan how they pay." (Source – Business Wire) Geoffrey Kott, Chief Revenue Officer at Affirm, remarks, "This past fall, Affirm's consumers increased purchases at airlines over seven times compared to the prior year, demonstrating higher consumer demand for payment flexibility when booking travel." He adds, "By partnering with KAYAK, we are able to bring consumers a flexible and transparent way to pay for travel, especially at a time when many are looking for ways to regain financial control and spending power amidst rising costs." (Source – Business Wire) About KAYAK: KAYAK is part of Booking Holdings Inc, one of the world's most prominent search engines for travel. It helps people find the vacation package, hotel, rental or shared car, and flights they want. The company enables travelers to search for the best flight deals and book with flexibility, as it's pretty reliable and completely free to use. With trip planning tools like a flight tracker, trip planner, and bag measure, KAYAK ensures that travelers' overall experience is more than just a flight search site!

Read More

Events