How to make your business travel reporting more efficient

Accurate, efficient business travel reporting is an essential component of expense management. Yet everything from manual errors to inefficient booking processes can inflate a travel budget with lost productivity and unnecessary fees.

To reveal these hidden costs and reverse inefficiencies, start by automating systems using spend management software while taking a data-driven approach to expense analysis. In this article, we’ll share how to audit business travel expense reports more effectively and overcome common challenges in the travel reporting process.

What is travel expense management?

Travel expense management describes the process of organising, approving, tracking, and analysing all expenses incurred during work-related trips. It follows the stages of business travel expenses from travel request to receipt submission, along with reimbursement and reporting.

Travel expenses are tax-deductible in many countries, so it’s important for companies to track them carefully to reduce liability. This includes any travel-related expenses like food and beverages, business hotels, flights, trains and taxis. It can even include the cost of entertaining clients, depending on company travel expense policy.

Analysing travel expense data allows businesses to identify patterns with employee spending, while identifying potential areas to cut costs and create a more efficient travel budget.

Understanding travel expense reports

Travel expense reports are used not only to document all trip-related costs, but also to analyse employee spend and manage budgets.

These documents are usually generated by travel expense tools and include itemised lists of all expense related to work travel. Structure varies, but typically a travel expense report will include the following components:

1. Employee details: Name, department, title, travel dates, and travel reason
2. Itemised expenses: List of all work-related travel expenses, including ground transportation, accommodation, food, beverages, and airfare
3. Expense categories: Each cost is assigned to a category for financial reporting and compliance
4. Proof of expenses: Documentation such as receipts, flight invoices, hotel invoices, and restaurant bills
5. Expense summary: A calculation of the total trip cost and purpose
6. Approval for processing: Managers or finance teams should sign off on business travel expenses to verify compliance with company travel policies

What is a travel and expense audit?

An expense audit dives deep into travel expenses reports to uncover inefficiency and errors. This process investigates the expenses submitted by a company’s employees for work-related travel. A thorough expense audit will not only look for reporting errors, but it will also ensure that all submitted expenses are compliant with the organisation’s travel expense policy.

The goal of a travel expense audit is to:

• Monitor business travel spend
• Prevent occupational fraud
• Detect manual errors
• Determine hidden costs
• Forecast potential changes in travel and expense policies

Where the process uncovers errors or non-compliance, finance teams can suggest improvements to corporate travel expense policies as required.

To get started with a travel and expenses audit, follow these steps.

Step 1: Review travel expense policies

Read the corporate travel policy carefully for an understanding of allowable and non-allowable expenses, along with travel allowances.

Step 2: Review travel expense reports and receipts

Match receipts with expense submissions, ensuring all figures align.

Step 3: Investigate employee expense claims

If employees have submitted expense claims that don’t match company policy, these need to be carefully investigated. This may be an indication that the travel policy is outdated or there are areas of confusion. Are employees regularly going over their daily travel allowance? Are they claiming for expenses that aren’t allowed under company policy?

Step 4: Identify spending inefficiencies

It’s not just overspending or human error that a good expense audit will look for. The auditor should search for missed credits, like unclaimed VAT refunds on items purchased during work-related travel. The auditing process will also examine whether businesses are optimising itineraries by booking at advantageous times and using cost-saving travel partners.

Step 5: Verify records and create a report

Finally, go over all financial records again and create an audit report stating all findings and recommendations.

Analysing the data from travel expense reports

While every finance department deals with the odd missing receipt, business travel analytics help identify when reporting errors become a pattern.

According to IBM research, 58% of midsize and large organisations are still using travel expense spreadsheets to manage expense data. Switching to spend management software automates expense tracking to reduce errors. Look for spend analysis tools like Coupa and Expensify to streamline and process data collection.

Data is collected from sources including corporate credit card transactions, expense claims, and receipts. Travel analytics tools consider factors such as average business trip costs and preferred supplier metrics.

AI-assisted tools are capable of processing mass quantities of data gleaned from overall travel spend. With advanced analytics and analysis, businesses gain a clearer understanding of employees’ spending patterns while travelling. You’ll also assess whether your average spend matches industry averages and determine whether average trip costs are rising or falling over time. This enables finance teams to identify fresh cost-saving opportunities.

Common challenges in travel expense reporting and compliance

Even with a well-organised structure and clearly defined policies, travel expense reports present challenges that can lead to cost inefficiencies.

Manual errors

Many businesses have already switched over from manual travel expense spreadsheets to automated travel expense reporting, and here’s why: human error.

Employees might submit duplicate travel expense reports or fail to include all itemised expenses. Even a small typo in data entry can lead to lost productivity, and the problem is widespread. According to the GBTA, 19% of expense reports contain errors. Companies spend up to 18 minutes and $52 correcting a single report, so those small errors can be quite costly.

Multistage approval workflows

If your company travel expense policy requires a multistage workflow, with pre-booking approval from multiple departments, this increases the chances of costly noncompliance and reporting errors. Traditional travel and expenses management required handling high volumes of paper receipts and going back and forth with emails. An audit of submitted business travel reports should look for these inefficiencies in the approvals process that slow down the finance team.

Consider using travel and expense management software to automate approvals, digitise receipts and streamline data transfers. This will also help with tax compliance, ensuring you don’t miss any expenses that could be claimed for relief.

Lack of real-time expense tracking

Real-time tracking systems allow business travellers to upload receipts during their trip, which gives valuable data and insights. With data analysis in real time, you’ll be able to be more agile with financial forecasting and budgeting, identifying the precise costs that could be inflating a business travel budget. This also makes it easier to identify expense fraud, rather than combing through backdated receipts during an audit.

Noncompliance with travel expense policy

Writing a clear, coherent travel expense policy is the first step to keeping costs within budget. Up to half of business travellers surveyed stated that they don’t follow their company’s policy, and even more (60%) found it difficult to understand.

This can prove costly to businesses when employees file business travel expense reports that don’t meet company standards. This is usually unintentional, taking the form of meals that exceed daily limits, for example. However, there will also be cases of noncompliance that cross over into expense fraud. Organisations lose up to 5% of revenue per year to internal fraud, and with business travel it may take the form of things like duplicate receipts or inflated expense reports.

It’s vital to audit reports carefully to uncover these discrepancies. You can also use a corporate travel management system that integrates with travel policies, automatically red-flagging expenses or bookings that fall outside of approved parameters.

Inefficient booking procedures

Businesses often give travelling employees some degree of flexibility over their own plans, using approved platforms for comparing flights and hotels. Yet even when booking through preferred suppliers, employees may not be optimising these costs. They might wait to book their tickets closer to the date of departure, inflating costs, or upgrading hotel rooms without approval.

Provide a travel platform like Booking.com for Business that allows employees to streamline corporate travel incorporating exclusive discounts and preferred booking options.

How to improve the expense process within your organisation

Identifying cost inefficiencies throughout the reporting process is the first step towards improving your organisation’s expense management procedures.

Follow these strategies to improve compliance and accuracy.

• Automate travel expense reporting using expense management software
• Digitise documentation using expense tracking apps with receipt-scanning capabilities
• Use mileage tracker apps to log travel using GPS technology for accurate reporting
• Use a travel management solution that integrates with corporate policies
• Analyse traveller data in real-time with AI-driven spend analysis solutions
• Simplify travel planning using a central platform with online booking tools

Is there an app to track travel expenses?

Yes, there are numerous apps designed for this purpose. Apps like Zoho and Expensify streamline expense tracking and receipt management by allowing travellers to digitally upload and submit receipts in real time.

Optimise your travel expense reporting

To find out whether your organisation is paying more for business travel than necessary, it’s important to carefully examine all travel expense reports. With a combination of automated travel expense reporting, real-time tracking, auditing processes, and AI data analytics tools, you’ll be able to identify those hidden factors that can drive up a budget.

A combination of expense management software and travel management platforms optimises the expense reporting process. With the right tools, you’ll be able to customise your travel policies to improve compliance and gain traveller insights, all while reducing manual work.

Partnering with travel management companies also yields significant discounts for businesses, as these team with prominent airlines, hotel chains, and car rental companies to offer inventory at the best corporate rates. You can even make advance travel payments to better control expenditure.