Business travelers are navigating their return to travel amidst concerns about COVID-19 variants, unclear travel regulations, and travel industry staffing concerns. Now is a good time to take some of the stress out of the equation by improving the whole expense management process. Nobody needs the additional burden of filing time-consuming expense reports or deciphering complex policies right now. And finance teams always have more important things to do than deal with non-compliant expense reporting or look for missing receipts.
As corporate travelers start to head to the roads and into the skies again, businesses need simple, easily understood T&E management processes with clear spending policies that are easy to comply with. In this article, we dig into the challenges that get in the way of T&E efficiency, and how you can solve them.
Why T&E is difficult for finance teams to control.
When it comes to T&E, some finance teams can’t do much more than set a budget and a policy, because it is almost impossible to control how employees spend company money while traveling without the right processes in place. Many teams simply issue a corporate card to the traveling employee (or ask them to use their personal card), and hope for the best when the employee files their expense reports.
This process creates three big problems for finance teams.
Problem #1: The finance team’s only means of control is a (toothless) expense policy.
Without rule-based policies in place, the most that finance teams can do to control T&E spend is lay out a written expense policy that isn’t easy to enforce: Up to 20% of T&E expenses fall out of policy. And, to make matters worse, fraudulent expense reporting has risen since the onset of the COVID-19 pandemic.
Problem #2: Expense information lives in different systems.
HR relies on a travel management system to book hotels and flights. Employees using corporate or personal cards rely on an expense management system for reimbursement. Finance teams rely on expense reports and corporate card statements to reconcile T&E expenses.
With three different systems at play, T&E reporting can be error-prone and time-intensive.
Problem #3: Reconciliation and reimbursement is conditional on expense reports.
Following up with cardholders to resolve errors can take accounting teams hours or days, which delays the monthly close. Employee reimbursements are also delayed, which can cause problems for employees’ personal money management — not to mention possible resentment for the wait.
David Coffman, Controller at Doximity, told us how difficult these errors and delays made the monthly close: “We collected expense reports on the 7th of every month. So my team didn’t have any insight into travel spend until then. We’d eventually get to the 7th only to find out some expenses were incorrectly categorized or missed receipts.”
“It felt like we were always closing the books. The minute we finished with one month’s expenses, it was time to start on the next.”
Upgrading the T&E experience.
How do you keep the ease of use of corporate cards for employees, and give finance teams more control over T&E spend?
Here’s how: With a comprehensive spend management platform, finance teams can issue virtual and physical corporate cards that follow a configurable approval policy. Employee expense reimbursements can be processed as they happen, without the need for expense reports — ever.
Upgrade #1: Pre-approved T&E bookings.
To book a flight, for example, an employee raises an expense request, filling in details such as an estimate of cost and categorization. Once approved, the employee receives a unique virtual card to use for bookings.
Alternatively, finance teams can create unique virtual cards with in-budget spend limits and save them in the company’s travel management app for employees to use.
This simple process creates invaluable benefits downstream. Finance teams can edit spend limits and review categorizations before a single dollar goes out the door. They know that an employee won’t go over budget, because a limit was applied when the card was created. The actual cost is visible right from the very beginning, not after the credit card statement arrives.
For customers with TravelPerk, AIrbase Travel Management with TravelPerk integration means Finance can set cost limits and travel policies in TravelPerk. These rule-based policies easily ensure compliance and are flexible to be configured to meet your company’s requirements. Best practice guidance for this setup can be made available.
Upgrade #2: Real-time reconciliation for POS T&E expenses.
POS expenses are more efficient when employees receive a push notification the minute they swipe a physical card to immediately categorize the expense and take a picture of the receipt for upload.
This makes downstream reconciliation incredibly easy, Amer says. Because finance teams “don’t have to wait for people to file expense reports, reconciliation happens in real time.”
“This would otherwise be 20 people using 20 personal cards and creating expense reports for us to sort through. Now Airbase consolidates all that information.”
Upgrade #3: Improve reimbursement processes.
Sometimes unforeseen circumstances demand that employees use personal funds during business trips. With a well-designed reimbursement process, these expenses can be handled easily, following the same automated workflows as any other payment method. Employees can submit for a reimbursement by completing a request, and attaching a receipt. Once the required approvals and documentation are received, the employee is paid automatically.
Take control of your T&E.
With a spend management platform, finance teams can introduce simple but robust T&E controls that benefit both employees and accounting. Virtual and physical cards, and automated reimbursements, preserve the ease of use for employees, while pre-approvals and accounts payable help consolidate the payment and reporting information for the accounting team.
Make life easier for employees who travel for work. Find out how Airbase can help. Schedule a demo today!