When it comes to Travel and Expense (T&E) reporting, companies face many problems. Addressing the most common challenges can help resolve these problems. The following are a few common difficulties employees encounter in expense reporting:
Submitting Incomplete/Inaccurate Expense Reports
Incomplete expense reports lack critical information that is required to ensure policy compliance. These reports will result from loosely defined reimbursement procedures. Providing employees with clear instructions about what information is required for expenses to be approved can help address this issue. Manual processes will compromise the reliability of the expense reporting process. Switching from manual to automated expense report processing is the best move a company can make. An automated expense solution can mandate some fields when employees report their expense claims. This expedites the approval process, improves cost control, and helps Accounting get the required data for spending analysis.
Not Capturing Travel Booking Data
Failing to capture travel data is another big problem many companies face. When employees book travel outside official channels, achieving compliance can be more difficult. Not having visibility into travel plans will make it difficult to negotiate with travel suppliers. Integrating direct booking into your expense solution can help avoid overspend and result in greater visibility.
Mandating employees to use the integrated travel solution for booking trips can help assure compliance with T&E policies. Your travel solution should be able to restrict inventory selection, and multi-step booking processes designed to identify overspend can prevent out-of-policy spending. Requiring employees to use a single booking channel can be difficult at first. Integrating direct booking into travel programs can help control costs and improve compliance.
Business Travel Costs Exceed Expectations
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Expense data shows if there is an increase in average airfares, hotel rates, and car rental rates. Note that higher travel spending is not always a sign of inadequate cost control; it might result from increased travel volume. When employees make bookings is one key factor that influences your trip costs. Although last-minute business travel is sometimes unavoidable, a number of trips booked within seven days of departure could be due to oversight. Recent surveys found that bookings made within seven days before departure cost an average of 44% more compared to bookings made 15 days or more in advance. Pre-trip approval can cut last-minute travel spending but creates additional work. Scheduling recurring reminder emails for employees to book trips can help reduce fare costs.
When employee booking is not the only criterion, but what the employee books also matters, please consider the following. Your T&E solution should guide employees to choose cost-effective suppliers and ensure they spend within policy allowance. Allowing employees to book travel through a central channel by leveraging negotiated preferred rates with selective airlines, hotels, and transportation companies will help control costs. Make sure that employees follow the procedures outlined in the T&E policy. The more rules you put in place, the more direction employees experience.
Even when employees comply with their company’s travel policy, they are likely to spend more than their allowance. So, giving employees clear spending guidelines and incentives helps keep them on track. Setting benchmarks and giving employees the flexibility to choose policy-compliant and cost-effective options will help your company save on spending.