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How to manage employee travel expenses

Employee travel expenses are costing your business hundreds of thousands each year (Source: GBTA). Inefficient processes, reporting errors, and, in the most extreme cases, expense reimbursement fraud all bring their own complex challenges. With this in mind, how can you better manage your business travel expenses and keep spending under control?

Managing travel expenses the traditional way

Historically, there have been limited options for managing employee travel expenses. Either you face the logistical headache of distributing corporate credit cards to travellers across your business, or you sacrifice control and oversight in favour of flexibility by allowing employees to make purchases on their personal cards.

Corporate credit cards are the best way to ensure you have full visibility of employee travel spend, but issuing them to everyone in your organisation isn’t a feasible solution. The distribution problem only gets more complex as you consider non-employees who may be travelling, such as contractors or interview attendees.

With all of this in mind, you may turn to a reimbursement approach. Let employees pay for on-trip expenses with their personal card and reimburse the costs later. Much simpler, right?

Unfortunately, a reimbursement approach poses many of its own challenges. Firstly, you have no visibility of total cost until travellers officially reclaim their expenses, which may happen days or even weeks after the trip itself. Secondly, you risk alienating employees who are left personally out of pocket from business trips as they wait for you to complete lengthy reimbursement processes.

Establishing expensing policies for travel

The first step to effectively managing corporate travel expenses is to establish a clear policy. Travel expense policies help employees understand the company’s expectations and can significantly reduce the risk of non-compliant payments or reimbursement requests. Your travel expense policy should be unique to your company, but there are a few key things to consider for success:

01
Define what counts as reimbursable expenses

Ensure your definition of reimbursable expenses is clear and easy for employees to understand.
02
Make sure documentation is kept

Document your policy and host it somewhere easily accessible for employees. Signpost to the policy in employee onboarding and relevant training.
03
Review your payment methods

Lengthy reimbursement processes can have a negative impact on employees who are left waiting for repayment. Using virtual cards can eliminate the need for these cumbersome processes, and reduce the administrative demand on your travellers.

Simplify your travel expense system

Reviewing the tools and technology systems that you use for managing employee travel expenses can uncover further opportunities for improvement and optimisation.

Conferma’s virtual card technology, for example, connects card issuers, TMCs, and corporate travellers to create a frictionless corporate travel payment experience. Using our mobile app, users can create or request virtual cards, push virtual cards to their digital wallets, capture and upload receipts, access corporate booking information, and review intelligent expense reporting insights.

How to use employee expense tracking and reporting for travel

Let’s say an employee goes on a business trip and pays for their on-trip expenses using a personal card. Historically, upon return from the trip, the employee is left frantically searching through receipts and uploading these one-by-one to reclaim the costs.

Your finance team then has to manually approve each expense reimbursement claim, checking each to ensure it complies with company policy. A huge drain on time for all parties.

Instead, by making use of virtual card technology, your travellers are able to digitally access company credit, rather than being left personally out of pocket or having to worry about looking after a physical company card. They can also snap pictures or upload digital copies of their receipts immediately via a mobile app, saving them from frustrating organisation tasks later.

Ultimately, both your employees and finance team have full, immediate oversight of on-trip spend, meaning no surprises when your travellers return.

Pre-approve expense with virtual cards

Virtual cards can take your management of business travel expenses a step further with pre-approved spending limits and custom spending controls.

Every virtual card that is generated has a limited value that has been set and approved by managers, meaning that employees are physically unable to exceed the on-trip expense budgets outlined in your policies.

On top of this, specific controls and spending restrictions can be customised related to geographical location, merchant category codes, and expiry date, allowing you to enforce specific policy requirements.

How our central reporting platform helps manage travel expenses

Corporate travel spend data is often fragmented and difficult to consolidate. Conferma’s central reporting platform allows you to instantly access enriched expense data from every transaction in one place.

This means you can have better control and oversight of employee travel expenses, making it easier to identify spending patterns, trends, and areas for optimisation. That optimisation could be evaluating whether your policies are still relevant and appropriate or using the data to negotiate better rates with suppliers. All of which enhances your overall travel management programme and drives cost savings.