How to simplify your T&E spend (with insights from Netlify).
T&E is one of the most difficult operating costs for finance teams to control. With different systems for booking travel, different payment methods (corporate or personal cards), and accounting, employees and finance teams get bogged down in expense reports, receipts, and follow-ups after every trip away from HQ.
With travel consuming between 5%–10% of a company’s budget, streamlining T&E processes and improving controls can have an outsized impact on financial performance as well as enhance the employee experience.
In this article, we dig into the challenges that get in the way of T&E efficiency and how you can solve them with Airbase.
Why T&E is difficult for finance teams to control
As far as planning for T&E goes, finance teams can’t do much more than set a budget and a policy because it’s impossible to control how employees might need to spend company money on-the-go.
Finance teams solve this problem by working with HR to book hotels and flights beforehand, issuing a corporate card to the traveling employee (or asking her to use her personal card), and hoping for the best when the employee files her 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
Apart from defining a budget, the most that finance teams can do to control T&E spend is lay out an expense policy. It isn’t easy. Up to 20% of T&E expenses fall out of policy.
What’s more, there isn’t a scalable method to supervise compliance. 91% of enterprise companies have a T&E policy but only 38% enforce it.
Most companies either trust their employees to comply or only check transactions above a certain dollar amount.
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
The GBTA (Global Business Travel Association) reports that one in five expense reports contains errors. Following up with cardholders can take accounting hours or days. This delays the finance team's monthly close, and employee reimbursements.
David Coffman, Controller at Doximity, tells us how difficult this 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 credit cards for employees and give finance teams more control over T&E spend?
At Airbase, we’re upgrading T&E controls from faith-based policies to effective protocols that give finance controls without impacting the employee experience.
Upgrade #1: Pre-approved T&E bookings
To book a flight, for example, an employee would log into Airbase and raise an expense request, filling in details such as an estimate of cost and categorization. Once approved, the employee receives a unique Visa 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.
Amer Ali, Head of Finance and Business Operations, explained how he set up the process for his company, Netlify: “We’ve set up Airbase cards in TripActions [the company’s travel management app] by department. If anyone wants to buy a flight or a hotel, they log into TripActions, use one of the cards on file, and that’s it."
"Employees don’t have to worry about submitting expenses or filing receipts. And finance doesn’t have to work to find out what Marketing’s T&E expenses are.”
Upgrade #2: Real-time reconciliation for POS T&E expenses
Airbase’s physical cards keep the efficiency going for POS expenses. 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.”
Take control of your T&E
T&E spend is hard to control because expense policies are difficult to enforce, teams rely on multiple systems to track and pay for expenses, and expense reports delay spend visibility and analysis.
Finance teams can introduce simple but robust T&E controls with Airbase that benefit both employees and accounting. Virtual and physical cards preserve the ease of use for employees, while pre-approvals and AP automation help consolidate the payment and reporting information for the accounting team.
Airbase offers a one platform solution to manage all non-payroll spend. It provides oversight and control over spending with real-time reporting and automatic syncing directly to your general ledger. Control all payments – physical cards, virtual cards, ACH, and checks – from one place. Close faster. Empower employees. Control spend.
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