Key points:
- As travel ramps up again, post-pandemic, businesses are thinking carefully about what travel is justified, and monitoring budgets accordingly.
- Automated travel expense reports use technology to record, track, verify, and analyze business travel expenses.
- Expense management software can save time, money, and frustration, while also reducing fraud.
While the pandemic ushered in a new era of virtual meetings and conferences — which are convenient, cost-efficient, and environmentally friendly — it also illuminated the value of in-person events, meetings, and interactions. Worldwide, business travel is expected to be back to about two-thirds of 2019 levels by 2024, according to the World Travel & Tourism Council. Already in 2021, the U.S. spent $322.42 billion on business travel. As business travel returns, so do the potential headaches of managing travel expense report policies, claims, and reimbursements.
Fortunately, the days of paper receipts and spreadsheets are over for those that have adopted travel expense report automation. Below we look at how the software works, and some of the many ways it saves businesses time, money, and frustration.
Travel Expense Reporting and Expense Management
Before automation, keeping track of all employee travel expenses was far more time-consuming.
Travel and expense management can be a significant operational business cost. If the processes aren’t streamlined it can also be a significant burden for busy HR departments. Dealing with expenses can be a source of frustration for employees as they try to save receipts, monitor their spending, file reports, and wait for verification and reimbursement.
Having a clear business expense policy that outlines allowable (and non-allowable) purchases and expenses, spending limits, and the reporting and reimbursement processes is key to effective expense management. SentricHR’s free Business Expense Policy template is a great resource if you’re looking to create your first expense policy or revamp an existing one.
Once you have published your expense policy, the next challenge is setting the processes to keep track of all expenses and make sure they are in line with your policies. This is where expense management software can be helpful. For the purposes of this post, we’ll focus on travel expenses, though the pointers apply to many other business expenses.
The State of Employee Travel & Travel Expenses Today
As business travel rebounds due to the removal of travel restrictions, automatic expense reporting becomes critical for seamless management.
Today’s businesses are thinking carefully about what travel is truly necessary for their success — after all, the average U.S. business trip costs $1,293. International travel costs are significantly higher. Business travel expenses include:
- Event or conference fees
- Transportation
- Accommodation
- Food
- Insurance
- Extras: laundry, entertainment, roaming fees for company mobile phones, etc.
With that kind of investment comes the need to monitor spending diligently.
What is Travel Expense Automation?
Travel expense automation uses technology to record, track, verify, analyze, and report business travel expenses. Traveling employees enter expenses or receipts as they go, meaning travel expense software can show, in real-time, what expenses are being submitted and if they align with budgets, expectations, and business expense policy — all without HR needing to step in. And that’s just the start.
9 Key Benefits of Automating Your Travel Expense Reporting Process
1. Replace paper (and paperwork)
Asking travelers to keep reams of receipts is not only tedious but ineffective. How many among us have lost or misplaced receipts? Plus, it can be a difficult task for HR teams to verify an envelope full of receipts against reports.
With an automated travel expense management system, travelers can snap photos of their receipts with their mobile devices. In many cases, the software will capture the relevant data automatically, reducing the need to enter it manually. Expense claims can be generated and submitted using the digital employee portal.
On the other end, HR professionals will no longer have to maintain endless spreadsheets or manually enter data. They’ll be able to resolve any expense issues quickly and move on to other, more business-critical work.
2. Accuracy
By removing manual data entry almost entirely from the process, many mistakes are eliminated. Any errors that do occur can be quickly spotted and dealt with — all the information needed is available in one place. Improved accuracy saves everyone’s time and money.
3. Maintain compliance with expense policies
Customize your automated travel expense reporting software to match your expense policies. It will then automatically verify receipts and ensure that each complies with the rules, removing the manual task of checking each receipt against requirements. Out-of-policy expense claims are less likely to slip through the cracks, making it easier to stay on budget.
4. Faster approval and reimbursement
Automated expense submission and reporting mean employees are reimbursed faster. As a result, employees are happier — and businesses have a more accurate, up-to-date picture of where funds are going.
5. Better spending visibility
Manual expense reporting rarely allows for an accurate, real-time view of expenses. Automated systems, however, track spending as it happens, allowing a window into where and how money is being spent. Insight into spending trends informs business decisions.
For example, a report on transportation costs may identify the best carriers for your business — and perhaps position you to negotiate a discount. Other reports may target spending policy violations, allowing you to close loopholes or misunderstandings.
6. Reduce the risk of expense fraud
Expense fraud accounts for an estimated 7% of fraud in small businesses, and 11% in larger organizations. It can come in many forms, including:
- Submitting receipts twice
- Rounding up mileage or otherwise “padding” receipts
- Policy violations such as choosing premium seats
- Submitting personal expenses as business costs
- Creating fake receipts
SentricHR’s expense management software has built-in audit tools that flag duplicate receipts or those that appear to go against policy. Also, by eliminating the time spent manually entering receipts, HR professionals have more time to look over all expenses — organized neatly in an electronic report — to spot irregularities.
7. Simplified reporting
Employees can submit their travel reports online, right from their employee portal, with a few taps — especially if they’ve been logging their receipts throughout their trip. Their dashboard is up to date at all times, showing claims made and tracking their reimbursements.
Expense management software also allows the HR department to generate a variety of insightful analytics reports on expenses, trips, spending violations, and more. Information is always readily available, not buried in piles of paper or spreadsheets. If expense management software is part of an all-in-one HRIS, you can seamlessly connect expenses to payroll.
8. Mobile-friendly access
Critically, travel expense reporting software is mobile-friendly, letting travelers log expenses as they go either by photographing paper receipts or submitting electronic ones. Users can log on through their employee portal from anywhere — submitting travel expenses is no longer a chore if it can be done in a few minutes while waiting in line for coffee or at the airport.
9. Make tax time easier
Audits and tax reports are made easier with solid expense reporting processes. And with automated travel expense reporting, you can be confident those expenses are legitimate business costs in accordance with company policy.
Simple, streamlined, secure expense reporting
Automated expense management software like SentricHR will help you and your employees track travel spending from anywhere. By creating a seamless flow of information from expense submission to approval and verification to reimbursement, travel expense report management is faster, more accurate, and more compliant.
Contact us today to schedule a demo or learn more.
