As business travel ramps up again, companies need to ensure their travel and expense management processes are prepared to handle this demand. T&E management tracks and streamlines employee spending on work-related costs, such as travel or office supplies. Keeping track of business expenses gets easier when you leverage technology.
Traditionally, travel and expense management would involve lots of tedious paperwork. However, modern tools like Human Resources Management Systems (HRMS) with T&E management software have greatly improved the process.
Choosing the best HRMS with a travel and expense management system lets employers create expense policies and specify claims for employees directly in the software. The software also manages receipt submissions through a dashboard that allows for easy creation, validation or rejection of claims with just a click.
In fact, the pandemic made most companies realize that paperwork no longer cuts it when it comes to travel and expense management. As a result, in 2022, almost 80% of companies reported more digitized practices, from 67% in 2020.
Importance of Travel & Expense Management Software
Travel and expense management is a multifaceted function. It is all about documenting and processing business costs so that it is within budget, meets tax requirements and does good to the business. A travel and expense management software automates the entire process while integrating it with the company’s expense management strategy.
In general, managing employee travel and expense costs such as per diem payments, business-related travel expenses, equipment purchases and so on is a cumbersome process. Employees spend a lot of time collecting receipts, submitting reimbursement requests and ensuring they receive the amount in their accounts. On the other hand, the finance team faces the gruelling task of verifying expense claims and processing requests.
Automating all these tasks with a T&E system streamlines the entire process and makes life easy for employees as well as finance.
Advantages of Travel & Expense Management with HRMS
Here are the many benefits a travel and expense management software offers across the organization:
1. Easy Receipts Submission
Often, employees put off the task of filing travel expense claims until the last minute. Since it takes up a lot of work time, many find it frustrating. But, in the end, it is unavoidable.
A travel expense management tool equipped with a mobile app allows employees to take photos of receipts and instantly upload them to expense reports. This largely reduces their workload.
2. Faster Approval Processes
Approvals are hardly a walk in the park! Budget constraints and changes in approval policies could often lead to more time in scrutiny resulting in frustration for employees.
Automated T&E system improves this process by ensuring budgetary standards and limits. This reduces system complexities and takes employee experience to the next level.
3. Better Regulatory Compliance
A robust travel expense management software ensures built-in compliance with regulatory standards, making it easy for employees to adhere to policies. It integrates requests, expenditure, and travel management with a user-friendly interface. Organizations can also incorporate in-system training and tips (where necessary) which can enhance compliance.
4. Real Time Updates
Travel has undergone a sea of changes in the past two years. This means there has also been a shift in the way the travel and hospitality industries operate. A comprehensive travel and expense management software provides insights into these changes with real-time industry updates.
This simplifies travel planning for both employers and employees. For instance, even after trip approval, notifications and alerts ensure fast action can be taken which helps in cost-effective cancellations or rebooking.
5. Easy Finance Management
A travel and expense management system automates nearly all operations, from booking trips to reimbursing costs. Most importantly, all of this happens within the company’s budgetary and financial constraints.
Employees get an overview of their spending limits, so that they can easily plan trips within the company’s travel and expense policy budget. The system notifies them of any deviations from travel guidelines in real-time.
Moreover, digitized T&E management expedites reimbursements. Organizations can establish a system where employees receive reimbursement upon approval from the finance team. Employees receive regular updates on the status of their reimbursements which makes them feel relaxed.
6. Higher Flexibility
At times, if flights are canceled by airlines or tickets need to be canceled by employees, unused tickets often go to waste. Travel and expense management allows companies to track and manage these unused tickets efficiently. It avoids wastage of resources reduces associated costs.
This flexibility also empowers employees to work with adaptable travel arrangements without unnecessary financial loss.
7. Greater Employee Autonomy
When it comes to business travel, managers often face the daunting task of manually having to review expense claims. A travel and expense management system provides managers with a holistic overview of all requests including cost details alongside receipt visuals for quicker audits.
Automating all these aspects greatly enhances the employee experience. This approach gives employees more autonomy while effectively eliminating the need for endless email chains for permission requests, document sharing and follow-ups.
8. Better Audits
Often, auditors have a hard time when they are processing claims from business travellers. In non-standardized systems where travellers aren’t guided through claim filing, auditors are the ones who face the burden. They need to meticulously verify each claim, including receipts, expense details, taxes and other cost elements.
A travel and expense management software simplifies auditors’ lives by automating much of this repetitive and high-volume work.
9. Faster Claim Processing
Reimbursements often lead to frustration because of duplicated efforts and delays, especially when claims are returned for incomplete information.
Effective T&E procedures streamline this process by setting clear quality checks upfront. This means all necessary paperwork, reimbursements, information and approvals are accurately submitted from the start. Such efficiency improves claim processing times to a great extent.
10. More Transparency
Every company has its own travel and expense policies, which can be complex and vary across different employee segments. To address this, travel and expense management systems offer clear expense guidelines. These guidelines can be directly communicated through the travel expense management solution which brings more transparency and trust.
Before approval, the system automatically evaluates costs to ensure policy compliance, reducing disputes and misunderstandings. Guidelines can be applied based on groups or individuals and are done automatically. Enhanced transparency leads to a positive culture and improve overall employee experience.
11. Easy Integrations
Today, companies rely heavily on a host of tools to manage diverse tasks. Tight integration between HRMS and expense management software is imperative for better collaboration and transparency among HR, finance teams, approvers and employees.
Advanced T&E software offers huge benefits through its extensive integrations. It easily integrates with enterprise ERP systems, project planning tools and more, reducing time spent on administrative tasks. For instance, a travel and expense management software can automatically log employee travel hours as part of their workday. This minimizes operational friction and allows employees to focus on their work without worrying about minor data entry lapses.
Parting Thoughts
Travel and expense management has evolved significantly in recent years. Understanding its impact on the overall employee experience and adapting to changing travel regulations, companies are increasingly digitizing their processes. What is the most challenging part of managing business expenses? Let us know in the comment section!
