The Importance of Travel And Expense Management Software

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Travel and Expense (T&E) on average account for 10% of an organization’s budget.

It is considered the second most difficult operating cost for businesses to control after payroll and benefits.

T&E is difficult to detect, especially as organizations continue to use manual methods, which are susceptible to errors and inaccuracy. This leaves expenses unmanaged and undetected.

The only way to make the process more accurate, efficient, and seamless is with T&E management software that will streamline the entire process effortlessly.

In this article, we will discuss the importance of T&E management software and why organizations should go for it.

 

The Importance of Travel and Expense Management Software

T&E constitutes a major portion of a company’s expenditure.

The management of expenses manually affects productivity. It also makes employees unhappy and ultimately affects the business’ bottom line.

A study by the Global Business Travel Association (GBTA) has revealed that on average manually processing a single expense report incurs a cost of $58.

The result is that you are incurring a lot of expenditure to save money! Also, the manual system will not be so efficient and may not work, resulting in a loss of even more money.

How do you know it is the right time to implement T&E Management software?

The indications to look out for are:

You are incurring too many expenses on business travel

• The employees responsible for tracking and monitoring T&E are overwhelmed and hassled with the workload

• Employees are not clear about the travel policies in place and are confused and have to search for all the guidelines

• Loss of expense receipts or underreporting of expenses

• Non-compliance or policies

• Cumbersome and tedious reimbursement processes

• Delay in reimbursement for employees causing employee dissatisfaction

• Occurrence of fraud in travel expenses

Why you should opt for the best travel and expense management software



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The best travel and expense management software will offer several valuable benefits to an organization.

Some of the major benefits are:

1. Quick and simple process

Since the workflow is totally automated, the obvious benefit is a reduction in both processing cost and time.

There is no need to collect receipts and get them approved or return them to the employee for revision. The software will make the process seamless. When an employee submits travel receipts and bills online, the report will automatically go to the concerned manager for approval.

When the finance manager or any other concerned person approves all the bills and expenditures, the system will generate the amount to be reimbursed to the concerned employee. This will automatically be directed to the payroll section for payment.

The T&E management software drastically cuts down on paper trails and reduces the time between approval of expenses and reimbursements.

2. Less errors and delay

The Global Business Travel Association has found that 19% of all expense reports contain errors. It also takes about 18 minutes on average to correct each error.

This happens when several employees use the manual method to add their business travel expenses on the same spreadsheet.

The T&E management software enables error-free submission. In the manual method, employees may make errors while submitting information. This may be compounded when put into the worksheets by the finance department.

Automation will replace the need for manual data entry and supervision. This is a major activity of expense management which is time-consuming.

T&E software includes features like scanning of receipts as well as direct integration with the employees’ corporate credit cards.

Further, the software will be able to take up information directly from the employees. The employee’s credit card statements can even be seamlessly integrated with corporate travel management systems.

Errors can be eliminated as employees will be able to take pictures of receipts on their mobile phones or other devices and be able to submit them as an attachment to their expenditure reports. This is possible with optical character recognition (OCR) which will be enabled in the mobile app, which is included with the T&E software.

3. Quicker reimbursement for employees

With T&E software, employees can immediately submit receipts and bills. This will be easily and quickly reviewed by concerned authorities and approval will be fast.

This will enable faster reimbursement for the employee and overcomes the frustration of all concerned over errors and delays. The ultimate result is the improvement of employee satisfaction.

4. Up to date policy enforcement

It is difficult for any manager, even a very efficient one, to be well versed or remember the latest expenses policy or changes in tax rules.

With automated T&E software, the system will immediately point out any deviations from the latest policies. These may include submission of expense re-reimbursement based on old amounts or reimbursement for a new enhancement made to the policy. The software will correct it all.

An organization can instruct the travel expense management software on which expenses are allowed and which ones are not based on the company's travel expense policies.

5. Full visibility

The T&E management software will provide full visibility about travel expenditure in real time.

Such software will mostly include a dashboard that will have details of all the expense data of an employee. The T&E management software compiles and presents this data in a simple and easy way in the form of visuals, such as graphs, charts, and other graphics.

This will make it easier for the concerned managers to understand the metrics of the expense incurred. This may include the expense the organization incurs per employee, or the amount incurred per employee category. It will also display the time taken on average to approve expense reports.

Further, the finance team will be able to track the employee’s expenses in real time with the help of automated expense reports using a mobile app. This will help them understand an employee’s travel program better.

Having the expense data in a single place will help the finance unit set up expense budgets for the future.

6. Integration with other software

It is important to allow expense data to flow through the organization’s financial system to add it to the accounting system. This is not possible with manual spreadsheets.

However, it is easily possible with most T&E expense management software as they provide easy integration with a wide range of applications in an organization. Such integrations are needed to make the travel management process seamless.

Since different Integration capabilities differ from solution to solution, do ensure that you select T&E software that integrates with everything your organization needs to get better control of expenses needs.

For example, the integration of the T&E management software with the organization’s expense and accounting functions will save a lot of time and effort. When a travel expense is reported and approved by the T&E management system, the integration will provide an automatic update in the accounting system. An immense saving of time for your finance division! Otherwise, they would have had to re-enter all the information.

In addition, the T&E expense management software will permit the export of data in various formats. This will be done without any loss of data or errors.

Integrating T&E expense management software with other applications will provide the best insights from all of your systems with the least time and effort.

7. Cuts down on expense fraud

A report by the Association of Certified Fraud Examiners has revealed that 20% of organizations with less than 100 employees and 13% of larger companies have reported expense reimbursements fraud.

T&E expense software is highly beneficial when an organization has a standardized travel expense policy in place. This policy will explain clearly what expenses are permitted. An organization is necessarily required to update its travel expense policies on a regular basis.

It may not be surprising to know that the report by the Association of Certified Fraud Examiners' 2010 found that over 15% of fraud cases in organizations are linked to false expense reports.

Employees can find innumerable ways to cheat a company and travel expenses are alluring one. However, with T&E management software in place, organizations will have a detection system that will ring the warning bells early to prevent fraud.

8. Stay on the right side of compliance

T&E management software is very important while considering the directives on tax from the Internal Revenue Service (IRS) and other local or state tax agencies.

With this software, organizations can track the expenses it is entitled to deduct and also provide easily accessible documentation (in the form of electronic copies of receipts and reports) in case of an audit.

Conclusion

As with any other software implementation project, you should keep some best practices in mind when purchasing the T&E software.

• Start with the discovery phase and understand the requirements for the T&E software that will serve your requirements

• Ask the providers what would be the cost

T&E software is here to stay. It offers the most accurate and convenient solution for your employees who deal with the organization’s travel and monitoring of expenses.

Ensure that you select the right user-friendly T&E software that employees at all levels can use easily, right from managers to travelers.

The right T&E management software provides the best possible experience for all the employees involved in the travel process.