Challenges of Corporate Expense Management

Business travel expenses cost companies most significantly, which is why corporate travel and expense management becomes a major challenge for organisations. This is especially true for small businesses that have to stick to a budget. It is, therefore, important to efficiently manage the costs to maintain a competitive advantage. In this article, we explore the 5 biggest challenges of expense management and how to address them for more savings:

 

Expense management has been reported as one of the most challenging aspect of business travel. The reasons that make it hard to efficiently manage are-

 

• •  Manually entering expenses.
• •  Lack of visibility on travel expenditure.
• •  Too many processes frustrate employees and admins.
• •  Lost receipts/ invoices due to human error.
• •  Delayed approval and reimbursement cycles.
• •  Voluminous data of employees’ spending that are hard to make sense of and keep track of.

 

These are just some of the challenges, but we have assimilated the 5 biggest challenges of a travel and expense management system that prompt the need for automated processes that can simplify every aspect of business travel.

 

So, let us dwell deeper on the challenges that make corporate expense management a laborious task:

 

Multiple Processes Complicate Expense Management:

 

Employees travelling for work incur multiple different expenses as part of their job. As a consequence, all the employees, travel admins and the finance department look for an expense process that is hassle-free. An easy, efficient, and quick expense management solution, therefore, becomes the need of the hour.

 

Companies that continue to rely on outdated manual expense processes like capturing invoices, recording expenses, and submitting claims for T & E have to go through cumbersome processes. These processes include:

 

• Retaining invoices.
• Keeping note of all that is covered by the company’s travel policy.
• Manually filing for expense claims. 
• Mentally taking notes of each transaction and what it was for.
• Being mindful of not exceeding the expense limit.

All these issues can be challenging for a business traveller who already has a lot on their mind. In such circumstances, business travel and expense management software is the ideal choice to streamline and automate all these processes with just one click. 

Lack of Control in Business Expense Management:

 

One of the biggest challenges faced by the finance team handling business travel expenses is the lack of well-defined spending limits. The absence of transparent spend limits can often lead employees to partake in inefficient purchasing, thereby overshooting the company’s budget. Dealing with employees who exceed the company’s expense limits during business trips can be frustrating. Overseeing the company’s expense management process can, however, be simplified with an efficient travel and expense management product like myBiz that can customize both these aspects to suit your company’s business travel needs. Such an ideal travel expense software can help companies set up the individual as well as total spend limits, thus enabling total control over the company’s expenditure. Furthermore, it will ease the burden on the finance team by documenting the transaction history and helping them review it anytime without the hassle of having to dig through receipts. 

No Visibility of Employee Expense Management:

 

A good business practice is to be fully aware of every aspect of your company, but most importantly, the corporate expenses incurred by it. This includes the leading areas of spending as well as the average cost of corporate travel embarked upon by your employees. Having visibility over corporate expenses is, therefore, imperative for optimizing your business to climb the ladder of success. 

 

Corporate expense management addresses these concerns and enables companies to gain full visibility over their company’s expenditure by setting up a category-wise T&E policy that is integrated with the bookings. This offers consolidated expense data that can be accessed anytime, offering end-to-end visibility on travel expenses and claims. This further eliminates the need for going through multiple platforms to verify the company’s spending. A centralized travel expense management system also offers real-time reports for recording, maintenance, and auditing purposes.

 

Unmanaged Corporate Expense Solutions Lead to Delays:

 

Delays in business travel processes can cost the company large sums, in addition to being a hassle for the travel admins. Manually done paper-based or digital expense filing is often the biggest contributor to delays. Furthermore, when expenses that were to be filed months ago suddenly surface, it becomes a hassle that can quickly turn into a nightmare if it needs to be billed back to a client. Late expense submission further leads to employee reimbursement delays in the travel expense process. Added to that, when a task is shifted from one person to another, there are definite chances of further delaying the processes or minute details being overlooked. This slight oversight can turn bigger during audits, unnecessarily complicating things. 

 

On the contrary, when approvals and filings are automated with online expense management software, every stakeholder gets notified, prompting them to fulfil their role in the entire process. Furthermore, a corporate travel expense management solution helps to easily identify bottlenecks and enables remedial actions to rectify them timely.

 

Expense Frauds Without Travel Expense Management Tool:

 

Manual expense filing and management processes are tiresome and time-consuming. They also inhibit the travel admins’ capacity to cross-check the expenses filed by the employees in grave detail. This certainly creates a loophole that employees often try to exploit to get more amount in reimbursement than what was actually spent. Some of these frauds can be-

 

• •  Showcasing charges of items used for personal reasons.
• •  Seeking reimbursements for things that were not purchased during business travel.
• •  Billing travel expenses for cancelled flights or registration fees that were never imposed.
• •  Falsified receipts.
• •  Opting for more expensive options during bookings in the absence of a unified travel and expense management software.

 

All of this puts a question mark on the accuracy of the expenses filed, hence giving a boost to fraudulent practices and adding to the chaos. 

 

Online expense management tools are designed to provide solutions to the above-mentioned challenges and potential frauds in the expenditure claims process. This is possible due to the designated workflows that render more transparency to the whole procedure.

 

An expense management tool ultimately simplifies business travel-related expenditure, significantly reducing administrative burden, especially when addressing small business travel expense management. myBiz is one such tool that readily eliminates these challenges by integrating travel and expense management on a single platform. It seamlessly takes care of bookings, approvals, invoices, submissions, and reimbursements, making business travel smarter! Find out more by clicking here.

 

Frequently Asked Questions (FAQs) 

Q1. How can one make travel & expense management more efficient?

Ans. Expenditure management can be made more efficient with automated expense management solutions.

Q2. How can a company gain more visibility into their travel spend?

Ans. An online corporate expense management solution integrates the expense policy with the bookings to offer consolidated real-time reports that give more visibility into the company’s travel spend.

Q3. How can one reduce human errors in expense reporting?

Ans. With workflow automation, it is possible to enable real-time monitoring that can help in checking for errors. Analytics and reporting are the necessary factors that reduce the chances of error.

Q4. Why is it difficult to enforce expense management policies with manual processes?

Ans. It is difficult to enforce company expense management policies with manual processes because they lack transparency.