Travel & entertainment (T&E) expenses can be major financial overhead for companies who fail to take stock of these costs. Every year, a significant 120 hours are consumed by businesses in taking care of expense-related admin tasks, as per a JPMorgan report. Additionally, T&E is considered the second largest expense after salaries. To top it off, inefficient reporting adds up to 10% of business spending on T&E expenses, as reported by the Global Business Travel Association. It is also the cost that businesses can reduce without affecting the expected outcome of business travel.
Companies would need in-depth visibility into their expenses through travel and expense management software. However, most businesses handle the expenses involved in corporate travel manual and spreadsheets-based processes. It will not only create blindspots in your financial processes but also expose you to fraud. This makes using travel and expense management software essential for accounting discipline.
In this blog post, we will discuss how expense management solutions can introduce standards and systems to your T&E expenses so that you have greater control.
What is Travel and Expense Management Software?
Travel and expense management software is a specialized solution that automates end-to-end management of expenses incurred during business travel. It digitalizes expense receipt capture, claim reporting, and reimbursement while ensuring compliance. With T&E expense management software, you can streamline the complete process saving time, effort, and money that manual expense management incurs.
Before we talk about the advantages of travel and expense management software, let’s quickly understand the challenges of the manual approach.
Challenges of manual travel expense management
Below are the four of the most critical challenges that companies struggle with when managing expenses through pen-and-paper.
Delay in expense reimbursement
Without an expense management tool, finance teams must rely on tedious, repetitive, and error-prone manual methods to collect, validate, and approve employee reimbursement claims. It takes a single claim weeks if not months to get the clearance. By the time employees receive refunds, they are frustrated and disappointed with the slow process.
Lack of visibility into expenses
In a traditional flow of things, employees on corporate travel use their own money and later claim reimbursements. However, management won’t know the details of the expenses until they are reported. This lack of visibility can lead to fraudulent claims.
Violation of expense policy
Employees may or may not remember corporate expense policies when they are traveling. It results in violation of these policies, albeit unintentionally, upsetting the business cash flow.
Rampant fraud and errors
Due to the chaotic reporting and verification process, it is fairly easy for notorious employees to resort to fraud through inflated bills, fake receipts, and duplicate claims.
The difference that travel and expense management software makes
Centralized data hub for better visibility
With travel and expense management software, all your expense-related information is stored on a single platform. It can be accessed through a single-screen dashboard allowing finance leaders to keep control of expenses.
Pre-approved T&E expenses
The digital solutions allow you to leverage historical data to make near-accurate estimates of expenses for upcoming business travel. With this, teams can properly budget the trip and get approvals from the stakeholders beforehand.
Digital receipts to avoid fraud
With travel and expense management software, you can enable digital receipts to replace paper-based bills. With this, employees can submit expense claims as soon as the transaction is done. It allows for expedited claims processing.
Compliance with expense policy
You can integrate corporate expense policy with the automation platform and integrated credit card. It allows employees to comply with the policy and budget by triggering alerts whenever a transaction violates the rules or exceeds the preset limit.
Expedited reimbursements via automation
Owing to digital receipts and strict implementation of corporate policy, finance teams can speed up claims verification. Travel and expense management software also enables automated approval workflow, which allows for faster disbursal of refunds.
Gain greater control over T&E expenses with Zaggle EMS
For most companies, T&E expenses often exceed budget and destabilize cash flow creating moments of panic for finance leaders. This unpleasant experience can be avoided by digitizing expense management using a robust solution like Zaggle EMS. It is an all-in-one expense management system that makes expense submission and approvals seamless. It offers the following functionalities:
- Consistent implementation of expense policy
- Automate approvals with multiple workflows
- Real-time visibility into expenses and budget utilization
- Reminders and alerts for budget overruns
- AI-based generation of reports and insights
- Easy integration with other solutions like accounting software