A guide to effective travel and expense management

Even though the COVID-19 pandemic has slowed travel around the world, business owners haven’t forgotten the impact of travel on their bottom line. Before the pandemic, businesses took in up to $12.50 of profit for every dollar spent on travel. It’s no surprise that many are eager to travel again — even if it’s less often than before. Some companies rely on travel to do business.

Though some estimates don’t look promising for the future of travel, we all know travel won’t stop completely. Late last year, Bill Gates estimated that half of all business travel would disappear. Still, that’s half — not all. 

Now is the perfect time to revisit all aspects of your travel and expense management process, whether that means building a system from scratch or strengthening existing policies. 

Getting ready now ensures your organization will hit the ground running when travel is necessary. Here’s where to start.

The basics

Travel and expense management is the aspect of business concerned with recording expenses employees incur when traveling for work. Think of this type of management as an umbrella term encompassing several responsibilities:

  • Aligning business goals to travel
  • Creating and enforcing a corporate travel policy
  • Tracking expenses
  • Analyzing expense reports
  • Building approval processes for travel-related requests
  • Ensuring the safety of travelers 
  • Measuring how much profit results from travel
  • Reimbursing employees for costs
  • Reporting travel expenses on corporate taxes
  • Checking expense reports for compliance

Advantages of proper management

Proper management as a whole keeps a business running. But with travel and expense management specifically, the stakes are even higher — Mastercard names corporate travel and entertainment the second-highest expense category

How you manage these expenses is critical to achieving a return on investment, reaching your key performance indicators, and keeping your business financially healthy.

At the center of travel management is a travel policy. When rules and processes are standardized, employees know what to expect. They’re held to a standard that encourages them to be efficient and honest. 

Travel can be stressful, but if you lessen the burden with simplified rules, you relieve employees of the details, allowing them to focus on client meetings, industry networking, or prospect research. Experts also suggest that communicating with employees can prevent them from breaking travel policies.

Your expense approval process is what puts these policies into practice, especially if it’s automated. In Levvel Research’s 2018 survey of 300 organizations, those without automated travel and expense procedures identified high processing costs as one of several pain points of expense reporting.

In the same survey, businesses pointed to lost expense reports, long approval cycles, and manual report entry as problems that plagued their time and expense management. On the other hand, businesses with automated software enjoyed happier employees, more accurate expense reports, and lower processing costs. 

If you don’t follow best practices in optimizing your approvals with automation, you’re going to frustrate employees, fall behind on your goals, and waste time — not to mention the money you could lose.

Simple approvals and reports with real-time expense management contribute to regulatory compliance, error-free financial projections, and steady cash flow. Accurate expense records are also vital for properly paying your taxes; they allow you to differentiate between deductible and nondeductible expenses.

Finally, improving your travel and expense management is just good business. It reaps rewards not only in revenue but also in improved reputation among your staff and peers. And it gives you peace of mind.

Establishing the right system

While technology facilitates travel and expense management, it won’t solve all your problems. Good management systems are only as effective as how well organized the human element is — meaning, the better you craft the system, the better it will run.

Here are the steps you should take to build strong travel and expense management from the ground up.

Look at your current travel needs

With the pandemic easing, determine when travel will once again be feasible for your organization. Whatever you decide, remember that your company will have to pivot because of changing travel requirements, but that doesn’t mean those changes can’t work for you. 

Touch base with your clients and others in your industry to see what travel changes you’ll have to make. Then, do some brainstorming on what travel will look like for you.

Also look at your past travel data, if possible, to see what practices you can keep. Some employees will always need to travel for industry events, but smaller teams can travel to meet with clients while others join via videoconferencing.

Consider policies

If you haven’t already, now is a perfect time to update your travel policy. Even if you have an idea what it should include, ask your employees what would be most convenient for them. 

Maybe you typically reimburse employees for their meals, but they would rather use a company credit card. Gathering ideas from your team gives them a sense of ownership over the rules. Employees will be grateful to have a voice in the conversation, and they will be more likely to follow policies they had a say in creating. 

Keep in mind that your policies should be neither too rigid nor too flexible. Strict rules stifle employees, while loose rules lead to waste. Ultimately, more flexibility allows your company to make exceptions and allowances when something doesn’t go according to plan.

Set up an approval workflow

The crux of your policy should be the expense approval process managers and other stakeholders use to sign off on a variety of (if not all) travel expenses and reimbursements. A logical approval hierarchy will save time and effort — especially for the finance department. If possible, make sure managers approve items only once, and higher-level managers approve more costly expenses.

Build your workflow with input from others in your company, especially accountants and administrative assistants. The clarity resulting from involving everyone in approval workflow formation allows workers to uphold their responsibilities and frees them to ask for help when needed. Also, the more transparent your approvals, the fewer mistakes workers will make and the less room you’ll leave for expense fraud.

Choose automation software

The key to setting up travel and expense management policies that work is using software that both implements these policies and automates your workflow. In today’s fast-paced business world, you have no reason to waste time with manual processes. 

Thankfully, more and more businesses are switching to automatic approvals. Grand View Research estimates the market for travel and expense management software will balloon to $17.4 billion worldwide by 2027.

When you’re looking for software, make sure it integrates, or at least works well, with the programs you’re already using. This will allow you to pre-populate expense claims and reimbursement forms with information from your accounting software. 

The program should alert users to unusual activity that could indicate fraud or noncompliance. You also need a platform that builds thorough expense reports that are easy to analyze and show you potential ways to save money. Some options you can research include Zoho Expense, SalesTrip, Kissflow, and Ellucian.

Research other tools as well

In addition to robust approval software, don’t neglect mobile apps. Since your workers are literally on the go, they’ll be more likely to record expenses if it’s easy to do on their phone. For instance, plenty of apps scan and digitize receipts.

Consider using booking platforms that facilitate the more headache-inducing aspects of travel management. One option is TripActions, which uses artificial intelligence to book flights and hotels and offers 24-7 access to travel agents.

Keep workers safe

Especially in the age of COVID-19, you can’t underestimate your duty of care — your responsibility for your employees’ safety. Every decision you make in travel and expense management should prioritize others’ well-being. Caring for your employees means managing risk and telling them their safety matters. 

Show them how valuable they are by allowing them to travel within their comfort levels as well as implementing safety into your travel policies. For example, you could let employees work from home for the week following a trip, or you could upgrade your travel insurance plan.

Optimize often

It’s one thing to plan — it’s another thing to execute the plan. When you put your policies and approval processes into action, you’ll inevitably experience bumps in the road. Encourage your employees to openly share problems, so you know how to improve. 

Sometimes, resolving issues takes a little more effort than tweaking a setting in your software or making sure two managers approve expenses above a certain cost threshold. Review your policies and procedures regularly for opportunities to optimize.

Using JotForm for expense approvals

Much of travel and expense management relies on properly overseeing a workflow. And the first step in a travel and expense workflow is most likely filling out a form, such as a request form in which employees communicate trip details to a manager. That’s why JotForm Approvals is an ideal workflow solution.

First, you can use JotForm’s approval builder or its collection of customizable templates — such as travel authorization or expense forms — to cover each approval step. Once you’ve designed your forms, use JotForm Approvals to build a workflow through a simple drag-and-drop interface. You can also create conditions and set automatic email reminders, making sure approvals go to the right managers at the right time.

What’s more, JotForm provides a way to see all form submissions in spreadsheets through JotForm Tables. Or you can view submissions on the JotForm Mobile Forms app, which workers can also use to submit forms. 

Other features employees will appreciate are the ability to add comments to approvals and denials and the ability to assign tasks to someone else if necessary. As for digital receipts, employees can upload those to forms as well.

When you take your travel and expense management to the next level, you proactively ready your company for its next steps. Whatever the future holds for travel, you’ll be confident and ready to take on the challenges.

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