Travel and expense management also referred to as T&E management, refers to the policies surrounding a company’s travel expenses for employees for necessary business trips.
A solid T&E policy needs to outline how these expenses are managed, what your company will cover for your employees, and what it will not. Seek to reduce the costs of business travel as much as possible and report those expenses to senior management. One efficient way to reduce travel expenses while leveraging the fleet is by considering fractional jet ownership. Purchasing a share of the aircraft allows you a specific number of flight hours throughout the year without the costs associated with full ownership.
For any company, large or small, there are certain stages that will need to be walked through in regard to business management. Being aware of these stages should give you a clear view of where your company is at, so you can then know which stage you will need to take your business to next.
Here are the four stages of travel and expense management:
Stage 1 – Manual Tracking
The first stage of travel and expense management is manual tracking, meaning that certain employees have to manually track company travel expenditures in an Excel spreadsheet or something similar.
Such an approach is outdated in today’s world, not to mention that it’s very time-consuming and prone to errors as well. Nonetheless, it’s incredible how many big companies even today still have their business expenses tracked manually, such as with spreadsheets and receipts rather than online tools.
In today’s world, manual tracking for business travel expenses is only a viable option if your employees travel very rarely. Otherwise, you will need to automate as much of your travel expense tracking and processing as you can, and that means taking things to the next level which is…
Stage 2 – Using ERP Software
The next stage from manually tracking your business travel expenses is to make use of ERP software, which will help your organization manage all financial business processes, including that of business travel.
In contrast to simple spreadsheets, ERP software is an advanced tool that automates your financial operations for you. Besides tracking and processing company travel costs, it can also be used for budgeting, reimbursements, and financial reporting.
Effective travel and expense management is essential for businesses aiming to manage expenses, ensure compliance, and control costs efficiently. With the ever-evolving landscape of business travel, organizations need streamlined processes to track and manage expenses while adhering to regulations. Utilizing dedicated travel and expense management software enables businesses to automate and simplify these tasks. Such tools allow employees to report expenses in real time, enabling faster approval workflows and reducing the risk of errors. By integrating policy rules and compliance checks into the system, businesses can ensure that expenses are aligned with company guidelines and industry regulations. Moreover, these platforms provide comprehensive insights into spending patterns, helping organizations make informed decisions to control costs and optimize travel budgets.
In today’s dynamic business environment, implementing effective travel and expense management solutions is crucial for businesses to efficiently manage expenses compliance and control costs, ultimately contributing to their financial stability and growth.
If you have employees who need to travel regularly for business, then utilizing ERP software to automate the tracking and processing of expenses should be the bare minimum that your company uses for T&E.
Stage 3 – Cloud Based Solutions
The next stage in travel and expense management should be to use a cloud-based solution as a step above an ERP solution.
This is a step above ERP solution, in that it gives your employees mobile apps that allow them to capture receipts and other proof of business travel, and then sync that data in the cloud with your organization’s expense records.
Your employees should be allowed to take photos of their receipts, track mileage if they have to travel via car, and become linked to your corporate credit cards. This is the overall next best solution to take if you have a significant percentage of your employees who travel regularly, or if you have hired travel agents who need to monitor and reimburse employee business travel expenses.
In other words, this is automation taken to the next level.
But there’s still one more stage after this one that’s even more advanced, and that is…
Stage 4 – Utilizing Advanced Analytics
This stage is where you take T&E to the next level from cloud-based solutions. The idea here is that you can use analytics to accurately predict your company’s business travel expenses before they even have.
Machine learning capabilities and data-driven management will enable your company to make much smarter decisions and spend significantly less amount of time going over and analyzing data on spreadsheets.
For example, you can use artificial intelligence to capture employee receipts and then generate statistics based on the data it collects. It can recognize patterns in this data and then suggests ways that your organization can reduce the cost of travel as a whole.
This is the best T&E solution if your company has a lot of data that necessitates interpretation and if your travel agents or employees are unable to keep up with your organization’s travel expenses themselves.
The Stages of Travel and Expense Management
In summary, the above four stages are the stages that any company will need to go through in regards to advancing their travel and expense management policies and approach.