Let’s start with the fundamentals - what is travel and expense?
Travel and expense also denoted with the acronym T&E – are terms used when defining the summation of operational cost disbursed on business T&E management. Usually, T&E averages around 10% of the company budget which makes it an important aspect when focusing on initiatives of reducing expenses or making business processes more agile and efficient.
Why is travel and expense management important to businesses?
T&E has been identified as the second difficult operating cost to control by organizations. It is one of the key areas where a good amount of cash is drained out yearly by organizations. So, it is justified why T&E is considered when managing costs. However, the problem lies in collating and consolidating data from different places and evaluating it.
What does it mean to businesses?
Needless to say, cost reduction is vital to finance management, and as a CXO you very well know how necessary it is. You have to ensure that every operating cost is taken into consideration with business travel expenses being no exception - particularly when expenses are exorbitant and less transparent especially when it comes to T&E.
Detecting how much an organization is spending on T&E is never clear. At least not initially. A problem faced by the majority of companies. Reason, businesses still rely on outdated manual processes, resulting in human error. Such methods fail to capture expenditures correctly, leaving things unmanaged and undetected.
Additionally, most organizations think that they are spending within limits and there isn’t much they can do to save money on the expenses bill. In reality, such assumptions may be wrong and it’s difficult to break such prejudices. It is only, once they know their real spend (after using a good T&E system) they are left open-eyed by how extra they spend and what amount employees may be spending out-of-policy. This information when perceived creates room enough to manage expense patterns, track fraudulent expenses, detect duplicate invoices, etc. It saves more than 20% of the travel and expenses.
An improved T&E process has its benefits extended to business travelers. Employees making business trips for professional reasons or buying things for the company out of their pocket are eager to know how prompt the reimbursement will be. A good travel and expense management system can simplify this whole workflow. It gives enough visibility into the cash flow and enables quick reimbursement by shortening the entire approval cycle. It allows easy submission of receipts and highlights violations of the company’s T&E policy if any.
If you are planning to take advantage of the many benefits that come with a good T&E system, try TrackEx to build an expense policy and manage company costs.