Companies spend highly on travel to carry out numerous business-associated activities. Employees usually travel to develop business, serve customers, and attend conferences, trade fairs, and training seminars. The expenditures must be compiled systematically after completing a business trip for efficient travel expense reporting. It help businesses to claim tax returns on travel expenses. Therefore, employees must attach tickets, bills, and receipts as supportive documents for travel expenses.
What’s included in travel expenses?
The expenses for business travel comprise transportation, accommodation, meals, local transportation, communication expenses, and other incidental expenses. A standard travel expense report example may include the following elements.
- Name of the employee with the designation
- Date of travel
- Starting point and destination
- Departure time and arrival time
- Journey fare
- Accommodation expenses
- Meals and other food expenses
- Local transportation expenses
- Communication expenses
- Other expenses, like stationary, etc.
- Total expenses
Travel expense reporting can be for a single trip or multiple business trips in a particular period, such as a week, fortnight, or month. The report should provide details of expenses under various categories at a glance.
Why a travel expense report is important
Travel managers must have thorough insights into transportation and accommodation costs, as travel expenses are the principal contributors to overall costs. The following may help you understand the significance of travel expense reporting.
1. Valuable cost-cutting tool
Every organization implements several cost reduction measures by streamlining travel expense management. Identification of unnecessary and lavish expenses helps travel managers implement corrective actions to limit travel expenses for certain expense categories or employees.
2. Access to analytics
Automating the travel expense reporting ensures real-time analytics, besides expediting the reimbursement process. Corporate travel managers and TMCs can use analytics to monitor expense patterns for better control over costs. It is easier to detect overspending instances and take timely corrective measures.
3. Preventing expense fraud
Frauds are common in travel expense reporting, as employees may resort to forgery and other fraudulent practices for inflating expenses. Companies can reduce or eliminate expense fraud by mandating original bills to substantiate.
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Best practices for travel expense reporting
Most companies adopt online travel expense reporting after the emergence of online reporting platforms. Advanced travel management software have an in-built expense reporting facility to reduce the complexities of expense reporting. It saves staff hours as employees can create and submit travel and expense reports through the smartphone app on the go.
1. Adopting the right software platform
Best practices for travel expense reporting involve integrating online expense reports with a travel management program. Companies can reduce reimbursement requests by enabling the scanning of reports and consolidation of bills by implementing these best practices.
2. Import travel expense data with scanned receipts
Corporate travel managers do not require a typical business trip travel report sample, as expense report automation avoids filling out complex forms. You can instantly import the travel expense data with scanned receipts from the SaaS-based travel expense management program.
3. One-stop travel booking
An efficient travel management platform like Paxes used by various TMCs allows travel booking control and monitoring. Encourage employees to leverage the platform’s booking feature to save time. It reduces travel costs by enabling access to a large inventory of transportation and accommodation options. The portal helps extract travel expenses as a monthly report.
4. Integrating travel and expense management
Integrating a corporate travel platform with expense management will help merge tax-deductible expenses for the convenience of return filing and auditing. It will also improve cost savings by embedding the travel policy into the travel management platform.
5. Leverage corporate credit cards
Corporate credit cards reduce storing paper or scanned bills. These cards help improve the travel experience of employees. Travel cost control and monitoring are better if employees use corporate credit cards, as the company can set spending limits for employee levels and expense categories.
Suggested Read: A Guide To Prevent And Detect Business Travel Expense Frauds
Conclusion
Travel expense reporting is crucial to enable companies to claim eligible expenses for tax savings. Manual expense reporting can be time-consuming with the possibility of errors and fraud. Digitization of expense reporting helps reduce complexities and improves compliance with travel policy. Integrating travel expense reports with travel management software enhances cost control measures with real-time insights into spending patterns. Paxes is a great platform to book and manage various flights, hotels and other traveling requirements. The platform provide efficient prices well within the company’s travel policy.
Travel Expense Reporting FAQs
How to improve receipt management?
Using the smartphone app of travel management software simplifies receipt management. Employees can scan copies of receipts and upload them to the system. The finance department can access these receipts as necessary.
What business trip expenses qualify for tax deductions?
Travel, accommodation, food, and incidental expenses during business trips qualify for tax deductions.
Why are companies shifting to online travel expense reporting systems?
Paper-based expense reporting is cumbersome and prone to errors. These reports do not support real-time analytics and cannot detect travel policy violations. Manual reports make it difficult to assess travel spending patterns. Online travel expense reporting allows instant analytics for every category of travel expenses.
How do you select travel management software?
Choose a customizable travel and expense management software that supports seamless integration with the travel policy. It should support the Duty of Care and have easy access to inventories. The software should have a mobile app facility to enhance the travel experience of employees with the ability to book travel and submit expense reports.
How does an expense management solution help travel expense reporting?
An app-based expense management software enables the creation and online submission of expense reports saving time. It eliminates the possibility of errors and provides real-time analytics to track and monitor patterns of travel expenses.
