28
AUG
2018

The most common challenges of travel and expense management for businesses

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It shouldn’t be surprising that travel expenses can end up being astronomical, and this presents some interesting problems for expense management. These increased expenses represent a real struggle for businesses in regards to cost management. In order to get control of these expenses, you need to understand the categories into which these kinds of misunderstood expenses fall.

Troublesome and Confusing Travel Expense Policies

Companies often have difficult-to-understand and confusing travel expense policies. This becomes a problem because without a clear understanding of what is covered and what isn’t, these issues rear their ugly head. Most employees would assume that a hotel and food are covered, but if it is not explicitly stated, then how is an employee supposed to know? By outlining the business chains and preference lists for the kinds of businesses to patronize, employees can save time when designing travel itinerary. Often, employees will look for low-budget options, but if that hotel isn’t covered, then the attempt at cost efficiency is wasted. A great way to structure this for employees in your company would be to create a collaborative tool or application that has relevant information and lists of expenses that are covered. Allow them to make informed decisions by having specific policies that are easy to access and understand.

Expense Visibility Deficits

Can your company enumerate spending categories and average spending? If you can’t, then you can understand the frustration associated with not having the visible expense data that allows you to optimize and audit expense accounts. Part of this has to do with the software you’re using and with your reporting procedures. By having clear expense categories and a streamlined reporting process, you can create data sets that your accounting department can do something meaningful with.

Inefficient Reporting Processes

Are your employees using Excel to log their expenses? Are you using a proprietary system? Are different employees using different systems, making it such that more time is spent standardizing the reporting than analyzing it? Add to that manual reporting or paper receipts and you can see how efficient reporting processes can make a company run smoother. Do yourself a favor and convert all reporting to a single automated system that eliminates manual entry in favor of something intuitive for employees and the accounting department.

Delayed Employee Reimbursement

If your current policies favor long wait times for approving and denying employee travel reimbursements, then you are getting in your own way. This can go two ways: you end up with employees who are unwilling to travel or foster a growing resentment with the company. Sometimes, this delay is due to financial concerns, though if this is the case, then perhaps there is a structural problem within your company. It is important that employees feel like their time is valued and that they don’t have to chase down reimbursements for work-related travel. Streamlining and automating his process will do wonders for productivity and morale.

Overlooking Trends

If your company lack policy transparency, clear categories, and has poor auditing procedures, then you might have set yourself up for a different type of employee problem: people taking advantage of travel expenses. Without analyzing the data and noting whether or not travel expenses are within normal ranges or are atypical can be the difference between paying non-work-related expenses and holding employee accountable. Track data and compare historical trends to find out what is really going on.

Take-Home Message

There are a lot of challenges facing businesses in regards to travel expense management. One of the simplest ways to experience cost creep and losses is to have it leak out the window of travel. Employees who are tasked with being on the road want to have their time valued, have a clear understanding of what is covered, and want to know that they won’t have to chase down the accounting department to have their travel expenses reimbursed. If you want to make sure that you’re not falling down in your path in regards to travel expenses and their management, then ask yourself a simple question: Are travel expenses well-defined and am I analyzing the data? Because if you are, then a lot of the problems faced by other companies won’t even be on your radar.

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