Implementing a faster, precise, and transparent business travel expense reimbursement process is crucial as travel expenditure contributes substantially to an organization’s operating costs. The process of travel expense reporting, approving, checking, and reimbursing consumes the valuable time of employees, line managers, and office staff.
Using paper-based expenditure statements can be a tedious process with a probability of errors while filling out complex forms. Advanced mobile expense software solutions and desktop platforms can eliminate the complexities of expense filing and reimbursements.
What is travel expense reimbursement?
The process of compensating your staff for out-of-pocket costs incurred during a business trip is known as travel expense reimbursement. If the employee used his wallet to pay for expenses like travel, food, etc. while on the job, the company is required to fully reimburse the employee. All over the world, businesses check the accuracy of the expenses before paying the employee back. Employees are required to provide a travel expense report detailing the actual cost in order to do that. The report is then double-checked by the corporate travel managers and finance teams to ensure its accuracy and compliance.
Fundamentals of travel expense reimbursement
Any employee who incurs expenditure for business-related activities receives reimbursement from the company. Employees may spend money on business travel, accommodation, food, or local transportation by complying with the company’s expense policy. The policy provides clarity about reimbursable and non-reimbursable expenses.
Calculate business travel expenses
To calculate business travel expenses one must divide their expenses in three sections. Once done, it becomes easy to calculate the expenses.
1. Business Expenditure: One may incur expenses to purchase stationery and other essentials for the office. These are reimbursable under the business expenditure head.
2. Travel Expenses: These cover traveling expenses to make business visits, attend conferences, review meetings, and training programs. An employee may have to spend on meals and local travels if the company takes care of flight and hotel bookings.
3. Medical Expenses: Expenses such as hospitalization or treatment are reimbursable, per the benefits of medical insurance schemes.
One may spend money on personal reasons while on a business trip, but such expenses are not reimbursable. All reimbursable expenses must cover official or business activities. Some companies have a policy of paying an advance to cover reimbursable expenses. The employee should provide expenditure details and return the balance amount within a stipulated period.
Importance of clear business travel reimbursement
The travel expense reimbursement policy of the company should have no ambiguity. It must provide clarity about all aspects of expenses and the reimbursement process. Providing clear guidelines for approval flows, timelines, and other rules will help employees and finance staff adhere to the policy with no uncertainty.
The manual process of travel expense reimbursement is inefficient, slow, and unreliable. It causes delays and errors. Employees are not comfortable filling out the forms and waiting for the line managers to approve and forward them to the finance department for reimbursement. It can destroy the purpose of an expense reimbursement policy.
1. Simplifying the employee expense filing and reimbursement process
The availability of seamless communication platforms and tailored software solutions help companies adopt automation for effective implementation of travel policy. Automation of travel expense reimbursement expedites the process without the possibility of deviation from the travel policy.
Integration of business travel policy in the expense reimbursement platforms prohibits employees from bypassing the rules. The platform can instantly raise red flags by detecting errors. The user can proceed only after resolving the error. It prevents the submission of expense statements with errors.
Travel expense reimbursement platforms are easily accessible by using smartphones. With these platforms, employees will not have to wait till the last moment to prepare an expense statement for approval and reimbursement. The platform can update expenses in real-time to reduce the entire process of preparing expense statements to a single click. It does all the work of submitting and notifying the line manager for approval.
2. Gain instant visibility and analytics
Tracking business spending in real-time is a helpful attribute of intelligent travel expense management platforms. Businesses can have real-time visibility into the spending trends for necessary corrective actions to prevent financial losses. They can detect policy violations and get advanced analytics, including risk forecasting, to help the finance teams explore avenues to curtail expenditure.
Compliance is crucial for the successful implementation of an expense policy. The platform can ensure seamless compliance across all departments, transactions, and employee levels by automating policy checks. Reliable automation platforms ensure audit readiness by enabling an audit trail recording every transaction with relevant supportive documents and receipts.
3. Promises employee satisfaction
The process of manual filing of expense reimbursement is a hassle for employees, as it consumes a lot of time and affects the core business activities. Further, while on a business trip, the employees should focus on business generation instead of doing a clerical job of filling out forms.
Travel expense reimbursement software and platform relieves employees from the repetitive and unproductive task of preparing manual expense reporting. It promises higher productivity through better employee satisfaction. The intuitive interface of such software enhances user convenience by saving staff hours.
4. Ease in calculating business travel expenses
A good travel expense reimbursement platform or software not only helps in reporting the expenses, it also helps in tracking the expenses in the duration of the business trip. Corporate travelers can upload their receipts and other expenses on the interface which will help in documenting the expenses as well as calculate the expenses for a smoother process of reimbursement.
What to look for in an ideal travel expense reimbursement platform?
One may look for the following features in the expense reimbursement platform:
1. Real-time Reporting And Analytics: Get seamless real-time visibility into expense trends and benefit from actionable analytics.
2. Automated Travel Expense Reimbursement: Allows one-click reimbursement across bank accounts.
3. Bespoke Travel Policy Adoption: Ease of configuring policies and expense parameters for different employee levels and departments
4. Easily Automate Approvals: Smoothly integrate complex workflows and one-click approvals for faster reimbursement.
One can directly choose Paxes as a travel management platform to save precious time hunting for the right solution.
Suggested Read: Are Travel Expenses Tax Deductible Or Not?
Conclusion
Travel management platforms transforms the tedious and repetitive travel expense reimbursement activity by providing a fast, reliable, and flexible app for single-click reporting, submission, approval, and payment. It eliminates errors and saves crucial staff hours for greater employee satisfaction and productivity. It enables seamless access to innovative features like real-time analytics, policy configuration, and data insights to enhance control and improve a company’s financial health.
Travel Expense Reimbursement FAQs
Who can claim reimbursement for travel expenses?
Employees of a company who spend money on their travel arrangements, like airlines, hotels, and local transportation, can claim reimbursement for travel expenses.
Can medical expenses get reimbursement?
Yes, expenses such as hospitalization and treatment will be reimbursed according to health insurance benefits.
Why integration of travel policy is important in the reimbursement process?
It prohibits employees from voiding the rules by integrating them into travel policies. The platform can detect errors and immediately set a warning signal. The user can continue only after the error is resolved.
What are the characteristics of an ideal travel expense reimbursement platform?
The platform should support real-time reporting and analytics, travel policy adoption, and hassle-free approval.
