The Impact of Faster Expenses Reimbursement on Business Travel

From car mileage to client lunches, the average business trip involves a series of expenses. And when these business travel expenses are paid directly by employees, they’ll need to be reimbursed in a timely manner. Yet an inefficient business travel expense reimbursement process can delay payments, leading to frustration and strain. 

Research makes the connection between slow reimbursements and financial stress clear, with 58% of employees concerned about the impact of these delays on their personal finances. A faster reimbursement process eliminates this strain so that travelers remain motivated and engaged.  

But it’s not just business travelers who reap the benefits of faster expense reimbursements. Travel admins and finance teams benefit as well, with streamlined processes reducing manual workloads and errors, while improving visibility over travel spend. 

Reimbursement speed creates a competitive advantage for both company culture and operational efficiency, so how can you improve your company’s processes? Below, we’ll explore the challenges that contribute to delays. We’ll also look at how to strengthen your company’s travel and expense reimbursement policy for improved compliance and efficiency.  

How does the business travel expense reimbursement process work?

Reimbursement of travel expenses is a multi-stage process covering the logistics of paying employees back for charges incurred while traveling for business. Examples of allowable business travel expenses include things like airfare, accommodation, rental cars, rideshares, train tickets, and meals. Because on-the-ground purchases are incurred throughout the course of the trip, it’s common practice for employees to use their own funds for incidentals, then submit expenses for post-trip reimbursement.

The process will depend on a company’s travel expense reimbursement policy, considering various factors like legal compliance, budget control and tax advantages. 

Here’s a step-by-step example of what traditional expense report processing usually involves.

• Receipt collection: Business travelers save all receipts for reimbursable travel expenses throughout their trip
• Expense reporting: Upon return, the traveler completes an expense report within the company’s approved timeframe
• Documentation: The expense report is supported with required documentation, including receipts, invoices, and authorization forms
• Manager approval: The traveling employee submits their expense report to management for approval
• Finance team approval: After initial approval, the expense report is submitted to the company’s finance team for verification and approval
• Reimbursement processing: Expenses are processed by the finance team, with reimbursement handled through bank transfer or payroll

What challenges delay business travel expenses reimbursement?

When handled manually, the reimbursement process is time-consuming simply due to its multiple stages. And when receipts go missing or expenses are disputed, payment approvals take longer. Workflows slow when travel expenses aren’t categorized correctly or duplicate reports are submitted, as finance teams need time to fix these issues.

Delays can also arise due to payroll processing challenges. When claims are submitted after payroll cutoff dates for the month, reimbursements may need to wait until the following pay period. 

How to speed up the travel expense reimbursement process

Many of the challenges described above can be significantly reduced with a strong travel and expense reimbursement policy. When crafting your company’s policy, consider implementing the following strategies.

• Define travel expense categories to eliminate confusion regarding which expenses can be claimed, setting limits where applicable
• Encourage timely submission of post-travel expense reports with defined deadlines
• Remove time-consuming paperwork by promoting receipt scanning apps and expense management software that enable digital expense documentation in real-time
• Create pre-approval processes for larger travel expenses like airfare and hotels
• Use all-in-one booking platforms like Booking.com for Business to streamline itineraries and corresponding expenses
• Offer corporate credit cards for travel payments to streamline and simplify reimbursements 

Creating clear workflows and processes in your policy reduces the burden on traveling employees, while improving expense report accuracy.

The role of technology in faster expense reimbursements

Many expense reimbursement pain points are caused by traditional, manual processing. Using automated technology is the best way to speed up your workflows for faster reimbursements, all while keeping data safe. 

Useful business travel management apps include tools like Expensify, Emburse, and Dext that automate the approval and reimbursement process. The best spend management software offers features including: 

• Instant digital receipt capture using mobile apps
• Automated transaction categorization and reconciliation
• Real-time policy checks to flag out-of-policy expenses
• AI-enabled expense verification for faster approvals 
• Corporate card integration with payment platforms
• Integration with booking platforms and accounting systems for wider visibility over travel spend

Through expense automation, employees get reimbursed faster, while admins and finance teams save time on processing claims. 

What are the benefits of quicker reimbursements?

Speeding up the reimbursements process carries benefits for both business travelers and finance teams. 

Benefits of quicker reimbursements for travelers

For business travelers, delayed expense reimbursements are more than just inconvenient; they can be a cause of significant anxiety. In a YouGov survey of European business professionals, 30% of respondents reported financial loss or stress due to inefficient expense processes. Further research found that two out of five employees using personal funds for work-related travel expenses experienced cash-flow problems due to a slow spend management process. 

When employees pay for their travel expenses out of pocket, they’re essentially acting as interest-free lenders to the business. Any delays to reimbursement could put them in a precarious financial position, which has a direct impact on morale and productivity. In fact, 39% of employees feel that financial struggles dampen their performance at work. 

The possibility for financial stress means that business travelers may be hesitant to spend personal funds on work trips when repayment timelines are uncertain, leading them to turn down opportunities for growth. 

By contrast, a fast process builds trust. When employees know that reimbursement processing times are swift and reliable, they’ll feel respected and financially secure during business travel. 

Apart from easing stress and improving morale, faster expense reimbursements also save time. Rather than chasing down receipts, sending multiple emails and filling out paperwork, automated, frictionless workflows free business travelers to focus on their work. 

Benefits of quicker reimbursements for finance teams

It’s not just business travelers who appreciate fast reimbursement. For finance teams, speeding up travel expense management carries multiple benefits. 

This starts with real-time spend visibility. Switching from manual workflows to an automated system gives finance teams access to current rather than historic data, for better on-the-ground budget management. At the same time, digital receipt scanning improves accuracy and compliance. With clear limits and defined categories, out-of-policy travel expenses are less likely to occur.

A faster, more efficient reimbursement process reduces the need for back-and-forth emailed approvals, as routine expenses are approved automatically by the system. And digital processing keeps documentation in a central reserve for tax purposes. 

Beyond reducing the administrative burden of business travel expense management, quick payments improve the employer-employee relationship. Reimbursing travelers on time, every time, builds trust while encouraging compliance. When employees know that they’ll be swiftly reimbursed, they’re more likely to follow company policies. 

Benefits of faster reimbursements for companies

The benefits of faster reimbursements are not just felt on an individual level; they carry company-wide impact. When employees are reimbursed without delays, this contributes to improved trust, engagement, and satisfaction. 

And when they’re repaid in real-time using apps that speed up the process, travelers feel free to make financial decisions that could contribute to a greater ROI on business travel. This might include hosting a client lunch to close a deal or networking at an evening event – both examples of ad hoc activities that could require upfront expenditure. 

Business travelers are happy and engaged, while feeling empowered to make these small investments during a work trip. In this way, a faster reimbursement process can encourage efficient business travel throughout the process and even contribute to company growth. 

Book your next trip with Booking.com for Business

Technology offers innovative solutions to improve the speed and efficiency of business travel expenses reimbursement. Our free, all-in-one business travel management solution keeps flight, hotel, and car rental bookings in one place for easier tracking and approvals – no need to chase down receipts. 

We also partner with tools like Expensify, eliminating the need for time-consuming manual data entry. Expensify’s automated spend management platform tracks receipts and handles reimbursement in just a few clicks. Business travelers can scan receipts with a mobile app, with amounts, dates, and merchants automatically captured for real-time processing. Employees can get reimbursed in seconds, while employers receive full visibility over expense reports and approval requests. 

Conclusion

Speeding up reimbursements directly impacts employee motivation and productivity. Without worrying about lengthy reimbursement processes, employees are free to focus on their core tasks during work trips. What’s the key to success? A multi-pronged approach merging clear travel and expense reimbursement policies with automated expense management technology. Modernizing your company’s expense management ecosystem pays off with faster processing times and improved morale.