Expense Reporting Archives : Planergy Software

Corporate Travel Program: How To Create a Program for Employer and Employee Needs

Lyle Del Vecchio — Wed, 18 Oct 2023 12:12:58 +0000

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Where the best opportunities for savings are in indirect spend.
How to gain visibility and control of your indirect spend.
How to report and analyze indirect spend to identify savings opportunities.
How strategic sourcing, cost management, and cost avoidance strategies can be applied to indirect spend.

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Corporate Travel Program: How To Create a Program for Employer and Employee Needs

Category

Travel & Expense

Written by Lyle Del Vecchio
17 min read

Tags

Last edited

July 2, 2024

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KEY TAKEAWAYS

A corporate travel program helps balance expenses while also taking care of employees.
Developing a clear and concise travel policy streamlines everything.
Partnering with a travel management company (TMC) can help you access travel experts to make the most of your program.

Corporate travel has become essential to many companies’ operations in today’s fast-paced business world.

Employees are frequently on the move, whether it’s attending conferences, meeting clients, or visiting other branches.

This is where a well-designed corporate travel program comes into play.

In this blog post, we’ll discuss the basics of a corporate travel program, why it’s important, and how to implement one successfully.

We’ll also dive deeper into the differences between leisure and corporate trips, explain the benefits of corporate travel, and provide real-world examples.

Implementing a successful corporate travel program can significantly improve employee satisfaction, drive cost savings, and enhance overall business performance.

What Is a Corporate Travel Program?

A corporate travel program is a comprehensive set of policies and procedures governing business-related travel for employees.

It outlines the rules and guidelines for booking flights, accommodation, transportation, and other travel-related expenses.

A well-structured corporate travel program helps businesses manage costs, ensure employee safety, and maintain a consistent travel experience.

Businesses can reduce administrative burdens, improve policy compliance, and optimize their travel spend by offering a centralized, streamlined approach to managing travel arrangements.

Why Is a Corporate Travel Program Important?

There are several reasons why having a corporate travel program is essential for businesses:

Cost Management

A well-defined travel policy helps companies control travel costs and optimize spending.

By establishing clear guidelines and budgetary limits, businesses can effectively manage their travel expenses and avoid unnecessary costs.

Additionally, partnering with preferred suppliers and negotiating volume discounts can lead to substantial realized cost savings.
Employee Safety and Security

The program ensures that employees travel with reputable providers and have access to support services during their trips.

A well-designed corporate travel program prioritizes employee safety by vetting travel suppliers, providing travel risk management resources, and offering 24/7 support for travelers in case of emergencies.
Compliance and Accountability

A corporate travel program enforces adherence to company policies and regulatory requirements.

Businesses can ensure that employees comply with internal and external regulations by centralizing the travel booking process and establishing clear procedures.

This reduces the risk of non-compliance penalties and enhances the overall company reputation.
Efficiency

Streamlining the travel booking process saves time and resources for both employees and the company.

Employees can quickly and efficiently make travel arrangements that align with company policy by implementing a user-friendly booking platform and offering personalized travel options.

How to Implement a Successful Corporate Travel Program

Creating your business travel program requires careful planning, and input from multiple departments. Follow these steps to help.

Assess your Company’s Business Travel Needs

Before developing a travel program, it’s essential to determine the frequency and types of trips your employees take, as well as their preferences and priorities.

Conduct surveys, analyze past travel data, and consult with key stakeholders to gain insight into your organization’s unique travel needs.
Develop a Travel Policy

Your travel and expense policy should include a clear breakdown of booking procedures, travel expenses allowed, and reimbursement methods.

Explain the reasons behind each rule and how it fits into the company’s compliance standards, and why it matters for traveler safety.

Creating your policy document is a crucial step in setting up a successful business travel program, as it will help ensure that all employees understand the expectations and guidelines related to their travels.

Furthermore, having a comprehensive travel policy can minimize confusion and potential violations of company standards, while making travel and expense management easier.

Your policy should include information such as:
- Requirements for pre-trip approval and notifications
- Per diem guidelines, including rules about meals, snacks, and entertainment expenses
- Rules around lodging and transportation (e.g., preferred vendors or travel agencies or allowed methods of travel, maximum airfare allowance)
- Restrictions on the use of personal funds or credit cards to cover business costs
- Reimbursement process and timeline
Include Duty of Care in Your Corporate Travel Policy

Duty of Care is an employer’s legal and moral obligation to ensure their employees’ safety, security, and well-being while traveling for business purposes.

In a corporate travel policy context, Duty of Care encompasses various measures companies take to protect their employees from potential risks and hazards during their trips.

Why is Duty of Care Important in a Corporate Travel Policy?

There are several reasons why Duty of Care is a crucial aspect of a corporate travel policy:
1. Legal Responsibility
  
  Employers must take reasonable steps to protect employees from foreseeable harm while traveling for work.
  
  Failure to fulfill this responsibility can result in lawsuits, financial penalties, and company reputation damage.
2. Employee Safety and Security
  
  By prioritizing Duty of Care, employers can help minimize the risks associated with business travel, such as accidents, illnesses, or security threats.
  
  This not only protects employees but also reduces potential disruptions to business operations.
3. Employee Satisfaction and Retention
  
  Demonstrating a genuine concern for employee safety and well-being can increase job satisfaction, loyalty, and retention.
  
  Employees are more likely to remain with a company that takes their safety seriously and provides appropriate support during business trips.
4. Risk Management
  
  A robust program enables companies to proactively identify, assess, and mitigate travel-related risks. This helps prevent incidents from escalating into crises and ensures that employees receive timely assistance in case of emergencies.
To effectively integrate Duty of Care into a corporate travel policy, companies should consider the following measures:
- Establish clear guidelines and procedures for assessing and mitigating travel risks, including health, safety, and security concerns.
- Implement a travel approval process that considers the potential risks associated with each trip and ensures employees have the necessary resources and information to travel safely.
- Provide employees access to a 24/7 support service, such as an emergency hotline or assistance app, to address any concerns or issues during their trip, such as flight cancellation or illness.
- Offer pre-travel training and resources to educate employees on safe travel practices, personal security measures, and health precautions.
- Regularly review and update your Duty of Care program to ensure it remains effective and responsive to changing travel conditions and employee needs.
Choose a Travel Management Company

Partner with a TMC to help manage your travel program, negotiate supplier contracts, and provide support services for travelers.

A TMC can offer valuable industry expertise, access to discounted rates, and advanced technology solutions to streamline the travel process.

Your TMC can also access up-to-date information on travel advisories, local laws, and cultural norms.
Communicate the Policy

Ensure all employees know the travel policy and understand their roles and responsibilities.

Provide training sessions, distribute written materials, and maintain open lines of communication to encourage policy adherence.
Monitor and Review

Regularly evaluate the effectiveness of your travel program and make adjustments as needed.

Collect employee feedback, analyze travel data, and stay informed about industry trends to continuously improve your program.

Leisure vs. Corporate Travel

While leisure travel focuses on relaxation and enjoyment, corporate travel serves a business purpose.

Corporate trips often involve tight schedules, meetings, and specific goals, while leisure trips prioritize personal interests and activities.

Corporate travel policies must address unique challenges, such as managing costs, ensuring employee safety, and providing efficient booking processes.

Moreover, corporate travel programs must balance the needs of the business with the comfort and well-being of employees, creating a positive travel experience that supports productivity and engagement.

Companies of all sizes can benefit from a travel management solution.

Benefits of Corporate Travel

Corporate travel offers several benefits for businesses:

Networking Opportunities

Attending conferences and events lets employees network with industry peers and potential clients.

These connections can lead to new partnerships, collaborations, and business opportunities that drive growth and innovation.
Cost Savings and Productivity Gains

Using corporate travel programs can help reduce costs, as companies can negotiate discounts on airfare, hotel stays, and car rentals.

Additionally, employees who can book their travel through an easy-to-use online booking tool or mobile app save time compared to manual booking processes and get a better overall user experience.

Companies also benefit from productivity gains when employees avoid long lines at the airport or stress from last-minute travel plans.
Professional Development

Business trips provide opportunities for training, skill development, and staying up-to-date with industry trends.

Employees can gain valuable insights, knowledge, and expertise that translate into improved job performance and increased value to the company.
Improved Collaboration

Face-to-face meetings can help strengthen relationships and facilitate better communication among team members.

By bringing employees together in person, companies can foster teamwork, enhance collaboration, and ultimately improve overall business performance.
Increased Sales

Meeting clients in person can lead to stronger relationships and increased sales opportunities.

Face-to-face interactions allow for a deeper understanding of client needs, more effective presentations, and, ultimately, more successful business deals.

Roles and Responsibilities of a Corporate Travel Consultant

A corporate travel consultant is responsible for managing a company’s travel program.

Their duties include:

Negotiating Rates and Contracts with Travel Suppliers

An experienced corporate travel consultant will leverage their industry knowledge and relationships to secure your organization’s best possible rates and terms.
Assisting Employees with Travel Bookings and Arrangements

A corporate travel consultant acts as a liaison between employees and travel suppliers, helping to coordinate itineraries, manage changes, and ensure a smooth travel process.
Providing Support Services for Travelers, such as Itinerary Changes and Emergency Assistance

In the event of unforeseen circumstances or emergencies, a corporate travel consultant can provide critical support to employees, such as rebooking flights, arranging alternative accommodations, and offering guidance on local resources.
Analyzing Travel Data to Identify Cost-Saving Opportunities and Policy Improvements

By examining travel data and trends, a corporate travel consultant can recommend strategies for reducing costs, improving compliance, and enhancing the overall travel experience.

Tips to Create an Effective Managed Travel Program

To create a comprehensive corporate travel policy, consider the following tips:

Involve Key Stakeholders

Involve key stakeholders, such as HR, finance, and department heads, in developing your travel policy.

This ensures that the policy aligns with company objectives and addresses the needs of various departments.
Set Clear and Realistic Expectations

Set clear and realistic expectations for employees regarding travel expenses and reimbursement procedures.

Provide guidelines on acceptable expenditures, preferred payment methods, and required documentation to streamline expense reimbursement.
Regularly Review and Update your Travel Policy

Regularly review and update your travel policy to ensure it remains relevant and effective.

Stay informed about industry trends, regulatory changes, and evolving employee needs to make appropriate adjustments.
Encourage Employees to Provide Feedback

Encourage employees to provide feedback on their travel experiences to help identify areas for improvement.

By listening to and addressing employee concerns, you can create a corporate travel program that supports both business objectives and employee satisfaction.

Final Thoughts

By following these steps and tips, you can create a corporate travel program that benefits your company and employees alike.

Using the right business travel management tools, like Planergy’s travel and expense management software, can help greatly.

With a well-implemented travel policy in place, you’ll be better equipped to manage costs, ensure employee safety, and optimize your business travel experience.

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The post Corporate Travel Program: How To Create a Program for Employer and Employee Needs appeared first on Planergy Software.

The Top 8 Business Travel Management Tools

Lyle Del Vecchio — Wed, 20 Sep 2023 10:11:16 +0000

Download a free copy of "Indirect Spend Guide", to learn:

Where the best opportunities for savings are in indirect spend.
How to gain visibility and control of your indirect spend.
How to report and analyze indirect spend to identify savings opportunities.
How strategic sourcing, cost management, and cost avoidance strategies can be applied to indirect spend.

Download Free Copy

The Top 8 Business Travel Management Tools

Category

Travel & Expense

Written by Lyle Del Vecchio
18 min read

Tags

Expense Management Expense Reporting Technology & Software

Last edited

April 16, 2024

Download PDF

KEY TAKEAWAYS

Business travel management involves planning, booking, and managing all aspects of corporate travel, including flights, accommodations, ground transportation, and expenses.
Corporate travel management software streamlines business travel processes by automating tasks such as booking flights, tracking expenses, and providing insights into travel spending patterns.
Effective business travel management can lead to cost savings, increased employee satisfaction, and improved productivity.
The right travel management solution can help ensure compliance with company policies, provide valuable insights into travel spending, and streamline the entire travel process.

Business travel can be both exciting and exhausting. Between booking flights, finding accommodations, and managing expenses, it’s easy to feel overwhelmed. But fear not, weary traveler!

The right business travel management tools can save you time, money, and countless headaches.

In this article, we’ll explore the top 10 tools every business traveler should have in their arsenal and answer some common questions about business travel management.

What Is Business Travel Management?

Business travel management refers to planning, booking, and managing all aspects of corporate travel. This includes arranging flights, accommodations, ground transportation, and managing expenses related to business trips.

A well-managed business travel program ensures employees have a seamless travel experience while controlling costs.

How Do You Manage a Company’s Travel?

Managing company travel involves setting clear travel policies, selecting preferred vendors, implementing a centralized booking system, and using a robust expense management tool.

Regularly reviewing and analyzing travel data can also help identify areas for improvement and cost savings.

This brings us to the question, should you allow your employees to handle their own travel arrangements?

Allowing employees to handle their own corporate travel booking can have several advantages:

Flexibility and Autonomy
Allowing employees to book their own business travel gives them the flexibility and autonomy to choose travel arrangements that suit their preferences and needs. This can lead to higher employee satisfaction and a sense of ownership over their travel plans.
Time and Cost Efficiency
Employees may better understand their travel requirements and preferences, which can result in quicker decision-making and efficient bookings. Allowing employees to take charge of their travel arrangements reduces the burden on travel managers or administrative staff, freeing them up to focus on other important tasks.
Cost Control
When employees are responsible for booking their own travel, they tend to be more mindful of costs. They can search for the best deals, compare prices, and choose options aligned with budget guidelines. This level of cost-consciousness can contribute to overall travel cost savings for the company.
Empowerment and Trust
Allowing employees to book their own business travel demonstrates trust and empowers them to make decisions in line with company policies. It promotes a sense of responsibility and accountability, fostering a positive work environment.
Personalized Preferences
Employees may have specific preferences regarding travel arrangements, such as seat preferences, hotel amenities, or airline loyalty programs. Allowing them to book their own travel enables them to customize their travel experience and may contribute to their overall comfort and productivity during business trips.

However, it is essential to establish clear guidelines and policies to ensure travel policy compliance and manage potential risks.

Travel Policy
Have a well-defined travel and expense policy that outlines guidelines for bookings, preferred vendors, budget limits, and reimbursement procedures.
Communicate the policy clearly to employees to ensure they understand the expectations and limitations. It should clearly outline what expenses are reimbursable, whether or not they can use their personal credit card or will be required to use a company card, etc.
Approval Process
Implement an approval process to ensure that travel bookings meet company requirements and align with the travel policy.
This allows managers to review and authorize travel requests, ensuring consistency and control over travel arrangements.
Expense Reporting
Set up a standardized expense reporting process to ensure accurate and timely expense reimbursements.
Provide employees with clear instructions on submitting expense claims and the necessary supporting documentation. You should also consider introducing a dedicated app for travel and expense management to automate expense management.
Communication and Support
Maintain open lines of communication with employees to address any questions or concerns they may have about booking their own travel.
Offer support and assistance when needed, such as providing resources for finding the best deals or offering guidance on travel-related matters.

What Is Corporate Travel Management Software?

Corporate travel management software is designed to streamline and automate various aspects of business travel management.

These tools can help book flights and accommodations, track expenses, and provide insights into travel spending patterns.

They can also integrate with other systems, such as accounting or HR software, for seamless data transfer and workflow management.

What Is the Difference Between Business Travel and Leisure Travel?

Business travel refers to trips taken for work-related purposes, such as attending meetings, conferences, or visiting clients.

On the other hand, leisure travel is taken for personal enjoyment and relaxation.

While both types of travel involve similar activities (booking flights, accommodations, etc.), business travel typically has additional requirements, such as expense tracking and adherence to corporate travel program policies.

There is no one-size-fits-all approach to the best travel management software. Consider how often people travel, the types of travel, etc., when making your choice.

What Are the Benefits of Business Travel Management?

Effective business travel management can lead to cost savings, increased employee satisfaction, and improved productivity.

By streamlining the booking process, enforcing travel policies, and automating expense reporting, companies can reduce travel-related stress for employees and ensure they have a positive travel experience.

How Do You Find a Corporate Travel Management App?

When searching for a corporate travel management app, consider factors such as ease of use, integration capabilities, customization options, pricing, and customer support.

Researching online reviews and seeking recommendations from colleagues or industry peers can also help identify the best app for your needs.

Additionally, many corporate travel management apps offer free trials that can provide an opportunity to explore the features and determine if it is a good fit.

Once you’ve identified a travel management app, ensuring all stakeholders are on board with its implementation is important.

Create usage guidelines for employees and ensure everyone understands the policies for booking flights, hotels, etc.

This helps with risk management to ensure employees aren’t booking personal travel on your dime or spending excess on car rentals, meals, and entertainment.

How Do You Book Flights for Business Travel?

Booking flights for business travel can be done through a corporate travel management tool, which centralizes bookings and approvals while providing personalized recommendations based on traveler preferences.

Alternatively, flights can be booked directly through airlines or third-party platforms, though this may not offer the same level of control and oversight as a dedicated tool.

What Is a Corporate Travel App?

A mobile corporate travel app is designed to streamline and simplify booking and managing business travel.

These apps often provide features such as real-time flight alerts, itinerary organization, and expense tracking, making them an essential tool for busy professionals on the go.

The Top 8 Business Travel Management Tools: In-Depth

Planergy for Business Travel and Expense Management
Of course, this list wouldn’t be complete without us mentioning our own tool.
With our business travel and expense management software, you can easily track and manage employee travel, allowable expenses for reimbursement, create expense reports, and more.
Our travel and expense management system works hand-in-hand with our procurement software to give finance teams a comprehensive control and oversight on all spend management.
TripIt: Your Personal Itinerary Wizard
TripIt is a comprehensive itinerary organizer that consolidates all your travel plans in one place, making it easy to access and share with colleagues.
The app also sends real-time flight alerts to keep you informed about any changes to your flights.
Additionally, TripIt offers helpful features such as maps and directions, ensuring you can easily navigate your destination. With its user-friendly interface and seamless integration with your email, TripIt makes managing your travel plans a breeze.
TravelPerk: One-Stop-Shop for Travel Bookings and Approvals
TravelPerk is a comprehensive solution for booking and managing corporate travel. The platform centralizes bookings and approvals, streamlining the process and saving time.
With transparent pricing and flexible options, TravelPerk ensures you get the best value for your travel budget.
The robust reporting dashboard provides insights into travel spending patterns, enabling you to identify areas for improvement and cost savings.
TravelPerk’s user-friendly interface makes managing all aspects of your business travel easy.
Airbnb for Work: Unconventional Accommodations for Business Travelers
Airbnb for Work offers unique accommodations tailored for business travel, providing a more comfortable and personalized experience than traditional hotels.
The platform simplifies group bookings, making coordinating travel arrangements for your team easy.
Additionally, Airbnb for Work offers convenient workspaces and meeting rooms that can be booked on demand. The platform also features experiences and team-building activities, enhancing your trip and promoting team bonding.
PackPoint: Handy Tool To Ensure You Pack Everything You Need
Packpoint is a handy packing app that can simplify preparations for your business travel by ensuring you have all the items you need for your trip.
By avoiding forgetting essential items, devices, or documents you can avoid any last-minute panic, cost incurred, or time wasted trying to replace them during your trip before your presentation or meeting.
Not having to worry about missing items will avoid disruption to your schedule and ensure you can perform your tasks effectively.
Packpoint will even make suggestions based on your destination, the weather forecast, and the activities you have planned.
Egencia: Comprehensive Corporate Travel Management
Egencia is a complete corporate travel management platform that offers a user-friendly mobile app for booking and managing trips.
The tool provides 24/7 customer support and travel assistance, ensuring you have access to help whenever you need it.
With its robust features and comprehensive approach to travel management, Egencia makes it easy to stay organized and in control of your business travel.
SAP Concur: Integrated Travel, Expense, and Invoice Management
SAP Concur is a powerful platform that combines travel, expense, and invoice management in one centralized solution.
The tool allows for seamless data transfer and workflow management, ensuring all aspects of your travel process are integrated and efficient.
Customizable policy enforcement and approval workflows help ensure compliance with company policies, while detailed analytics and insights into travel spending enable you to make informed decisions about your travel program.
Google Travel: Plan and Track Trips Easily
Google Travel, previously known as Google Trips, helps you plan trips and will centralize all your travel information by linking it to your Google account.
By guiding you through the process and identifying the most useful information and best offers it simplifies the planning process and keeps everything in one place.
Not just for business travel, Google Travel is equally useful for leisure and family trips.

Frequently Asked Questions (FAQs)

What Are Business Travel Management Tools?

Business travel management tools are software applications and platforms that help organizations and individuals streamline and optimize their travel planning, booking, and expense management processes.

How Can Business Travel Management Tools Benefit My Organization?

These tools can save time, enhance productivity, improve cost control, and ensure compliance with travel policies. They provide a centralized platform for managing travel-related tasks, such as booking flights, tracking expenses, and creating itineraries.

Are These Tools Suitable for Small Businesses As Well?

Absolutely! Many of these tools cater to businesses of all sizes, including small and medium enterprises. They offer scalable solutions that can be tailored to your organization’s specific needs.

Can I Integrate These Tools With Our Existing Systems?

Most business travel management tools offer integration capabilities with popular travel booking platforms, accounting software, ERPs, and other relevant software. This ensures seamless data flow and minimizes manual effort.

Are These Tools Secure?

Reputable travel management tools employ robust security measures to protect your data. They utilize encryption, secure connections, and adhere to industry standards to safeguard sensitive information.

How Do I Choose the Right Tool for My Organization?

Consider your specific travel management needs, budget, scalability, integration capabilities, and user-friendliness. It’s also beneficial to read reviews, request demos, and evaluate multiple options before deciding.

Simplify Your Corporate Travel Expense Management With These Tools

Efficiently managing business travel is crucial for organizations of all sizes. From itinerary creation and business expense tracking to policy compliance and analytics, you have everything you need to stay on top of business travel.

By leveraging these tools, you can optimize your travel planning, save time, reduce costs, and ensure a seamless travel experience for your team.

Embrace the power of technology and make your business travel management a breeze with these innovative tools.

Download PDF

What’s your goal today?

1. Use Planergy to manage purchasing and accounts payable

Read our case studies, client success stories, and testimonials.
Visit our “Solutions” page to see the areas of your business we can help improve to see if we’re a good fit for each other.
Learn about us, and our long history of helping companies just like yours.

2. Download our “Indirect Spend Guide”

3. Learn best practices for purchasing, finance, and more

Browse hundreds of articles, containing an amazing number of useful tools, techniques, and best practices. Many readers tell us they would have paid consultants for the advice in these articles.

The post The Top 8 Business Travel Management Tools appeared first on Planergy Software.

Expense Reporting: What Is It, Templates, and How To Fill A Report

Keith Murphy — Thu, 27 Jul 2023 11:34:09 +0000

Download a free copy of "Indirect Spend Guide", to learn:

Where the best opportunities for savings are in indirect spend.
How to gain visibility and control of your indirect spend.
How to report and analyze indirect spend to identify savings opportunities.
How strategic sourcing, cost management, and cost avoidance strategies can be applied to indirect spend.

Download Free Copy

Expense Reporting: What Is It, Templates, and How To Fill A Report

Category

Travel & Expense

Written by Keith Murphy
16 min read

Tags

Expense Management Expense Reporting Process & Procedures

Last edited

July 2, 2024

Download PDF

KEY TAKEAWAYS

Expense reporting is the process of documenting and submitting expenses incurred by an individual or an organization during business operations.
Expense reporting has many benefits for businesses (including taxes and compliance.)
Manual paper-based processes can work when you’re small but often become impractical.
Software can help automate and streamline your processes.

What Is Expense Reporting?

Expense reporting is the process of documenting and submitting expenses incurred by an individual or an organization during business operations.

It involves keeping track of all expenses, such as travel expenses, office supplies, meals, and other expenses related to business operations, and then submitting a report to the appropriate party for reimbursement or accounting purposes.

Expense reporting is an important process for businesses as it helps to ensure that expenses are properly accounted for and that employees are reimbursed for legitimate business expenses promptly.

Additionally, expense reports can provide valuable insights into how much money is being spent on different categories of expenses, which can help organizations identify areas where they may be able to cut costs or optimize their spending.

Reasons to Use Expense Reports

Businesses may not think expense reports are necessary, but the truth is businesses of all sizes can benefit from them.

Employee Expense Reimbursement

One of the primary reasons for expense reports is to reimburse employees for business-related expenses they have incurred on behalf of the company. This could include travel expenses, meals, accommodations, and other costs.
More Accurate Budgeting

Expense reports can provide valuable data for budgeting purposes. By tracking expenses over time, companies can gain insights into where they are spending money and identify areas where they may need to cut costs or adjust their budget.
Compliance With Internal Controls

Expense reports can help you ensure compliance with internal policies and external regulations. Companies can reduce the risk of fraud, errors, and noncompliance by requiring employees to document their expenses and obtain proper approvals.
Tax Requirements

Expense reports are also used for tax purposes. By tracking business expenses, companies can deduct them from their taxable income and reduce their tax liability.

IRS Requirements for Expense Tracking and Reporting

The Internal Revenue Service (IRS) has specific rules and requirements for business expenses that can be deducted from taxable income.

To be deductible, expenses must be ordinary and necessary expenses incurred during business operations. Here are some of the key requirements that the IRS has for expense reports:
1. Substantiation
  
  The IRS requires that adequate records, such as receipts, bills, and invoices substantiate expenses. These records must show the expense’s amount, date, place, and business purpose.
2. Business Purpose
  
  Expenses must have a business purpose. This means that they must be directly related to business operations, such as travel expenses for a business trip or office supplies for use in the office.
3. Reasonableness
  
  Expenses must be reasonable in amount. This means that they should not be excessive or unnecessary for the business purpose. For example, a coach flight instead of a first-class seat, or a basic hotel room instead of a suite.
4. Timeliness
  
  Expenses must be reported in a timely manner. The IRS requires that expenses be reported on a regular basis, typically within 60 days of the expense being incurred.
5. No Personal Expenses
  
  Personal expenses cannot be deducted as business expenses. The IRS requires that expenses be exclusively for business purposes and not for personal benefit.
Spend Management Analysis

Expense reports can provide valuable insights into how employees are using company resources.

By analyzing the spend data, companies can identify trends and patterns in employee spending, which can help them make informed decisions about budgeting, procurement, and other business processes.

How To Implement an Expense Reporting Process

It’s up to your organization to define the expense reporting process in a way that makes sense for you and your industry.

Typically, employees will be given specific guidelines on what expenses are eligible for reimbursement, what documentation is required, and how to submit their expense reports.

This might be covered by a corporate travel policy and employee expense reimbursement policy.

This can vary depending on the organization, but the process generally involves keeping receipts, filling out a form, or using an online tool to document expenses and then submitting the report to the appropriate person or department for review and approval.

Developing an expense reporting process for a company typically involves several steps.

Define Your Expense Policy and Procedures

Start by establishing clear policies and procedures that define what expenses are eligible for reimbursement, what documentation is required, and how expense reports should be submitted and processed.

This should be communicated clearly to all employees and stakeholders involved.

As you define your company policies, consider the following:
- What type of expenses will you cover?
- What expenses are not eligible for employee reimbursement?
- Will you allow employees to use a corporate card or purchasing card?
- Will you allow employees to book their own business travel or have someone book it for them? What pricing limits will you enforce?
- What should employees do during a business travel emergency? For example, the flight is overbooked, only first-class is available on another airline, etc.
- Will you require paper receipts for all expenditures or allow employees to submit photos of receipts through a mobile app?
Choose an Expense Reporting System

Next, determine the expense reporting system you’ll use. This could be a paper-based system, a Microsoft Excel spreadsheet, or a cloud-based expense management software.

As you evaluate options, consider ease of use, functionality, security, cost, and integration with other systems, such as your ERP or accounting software.

The ideal expense management solution will work with your accounting software and allow you to establish automated workflows for data entry and accounts payable.
Set Up Expense Categories

Define and set up expense categories, such as travel, meals, entertainment, and office supplies. This will help ensure expenses are properly tracked and allocated in your general ledger.
Establish Approval Processes

Next, establish an approval process for expense reports, which may involve multiple levels of approval depending on the expense amount or the employee’s position. This helps ensure that expenses are properly reviewed and authorized.

A simple process looks like this:
1. Employee Submits Expense Report
  
  The employee submits an expense report to the appropriate person or department, typically the employee’s supervisor or the finance department.
2. Review of Expense Report
  
  The approver reviews the expense report to ensure all expenses are legitimate, necessary, and comply with company policies and procedures.
3. Approval or Rejection of Expense Report
  
  The approver either approves the expense report, indicating that the expenses are acceptable and can be reimbursed, or rejects the report, indicating that some or all expenses are unacceptable.
4. Corrections and Resubmission
  
  If the expense report is rejected, the employee may need to make corrections and resubmit the report for approval.
5. Processing of Approved Expense Report
  
  Once the expense report is approved, the finance department will process the report and arrange for reimbursement of the approved expenses.
Communicate the Process

After establishing the approval process for employee expenses, you must communicate the expense reporting process to all employees, including how to submit expenses and what to expect in terms of reimbursement.

This should be done through employee handbooks, training sessions, and other communication channels.
Monitor and Evaluate the Process

You should regularly monitor and evaluate the expense reporting process to ensure it works effectively and efficiently.

This could involve tracking metrics such as expense report turnaround time, the accuracy of submissions, and the amount of reimbursement. Based on this feedback, the process can be refined and improved over time.

For example, tracking everything in a spreadsheet may be the quickest and easiest way to handle things when you’re a small company. But as you scale, it will lose efficiency because it relies on manual data entry.

Investing in expense reporting software makes more sense to streamline and automate the expense management process.

No matter which method you choose, having an expense reporting process in place helps keep operations running smoothly.

Basic Expense Report Template

[Company Logo]

Expense Report

Employee Information

Name:
Department:
Employee ID:
Date of Expense Report:

Expense Details

Date	Description	Category	Amount	Receipt Attached

Sub-Total: [Total amount of expenses]

Receipts Attached: [Yes/No]

Approvals

Employee Signature	Date	Manager Signature	Date

Notes/Comments:

[Add any notes or comments regarding the expenses or the report]

This is just a basic template that is customizable to fit your company’s specific needs.

The expense report should include all relevant information, such as the date, expense description, category, amount, and whether or not a receipt is attached.

It should also have spaces for the employee and manager’s signatures to certify the information as accurate and additional notes or comments to aid approval.

How Travel and Expense (T&E) Software Solutions Can Help

Travel and expense management can be difficult if you are using manual processes.

Travel and expense (T&E) software can help businesses automate and streamline their expense reporting process.

Simplify Expense Reporting

T&E software can make it easy for employees to submit expenses by providing a user-friendly interface for capturing and categorizing expenses.

This can reduce the time and effort required to complete expense reports and ensure that all required information is included.

You can also automate expense reporting, streamlining reimbursement approval and cutting down on the manual tasks in the process.
Eliminate Paper-based Processes

T&E software can eliminate the need for paper-based expense reports and receipts, which can be time-consuming and error-prone. It is very easy to lose a receipt.

Instead, employees can use mobile devices or web-based portals to submit expenses and attach electronic receipts. This can be done as soon as receipt is received, reducing the possibility of missing documents.
Ensure Compliance

T&E software can help businesses ensure compliance with internal policies and external regulations by providing automated approval workflows, audit trails, and built-in compliance checks.
Provide Real-time Visibility

T&E software can provide real-time visibility into expenses, allowing businesses to track spending and identify areas where costs can be reduced or optimized. This can help businesses make informed decisions about budgeting and procurement.
Streamline Reimbursement

By automating the expense reimbursement process, T&E software can make it easy for businesses to reimburse employees for expenses. This can reduce the time and effort required to process reimbursements and ensure that employees are paid accurately and on time.

Overall, T&E software can help businesses reduce the administrative burden of expense reporting and ensure that expenses are properly documented and compliant with internal policies and external regulations.

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What’s your goal today?

1. Use Planergy to manage purchasing and accounts payable

Read our case studies, client success stories, and testimonials.
Visit our Spend Analysis Software page to see how Planergy can empower you to get more value from your spend.
Learn about us, and our long history of helping companies just like yours.

2. Download our “Indirect Spend Guide”

3. Learn best practices for purchasing, finance, and more

Browse hundreds of articles, containing an amazing number of useful tools, techniques, and best practices. Many readers tell us they would have paid consultants for the advice in these articles.

The post Expense Reporting: What Is It, Templates, and How To Fill A Report appeared first on Planergy Software.

P-Cards: What Are Corporate Purchasing Cards and How Do They Work

Keith Murphy — Fri, 14 Jul 2023 09:22:43 +0000

Download a free copy of "Indirect Spend Guide", to learn:

Where the best opportunities for savings are in indirect spend.
How to gain visibility and control of your indirect spend.
How to report and analyze indirect spend to identify savings opportunities.
How strategic sourcing, cost management, and cost avoidance strategies can be applied to indirect spend.

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P-Cards: What Are Corporate Purchasing Cards and How Do They Work

Category

Spend Management

Written by Keith Murphy
18 min read

Tags

Expense Management Expense Reporting Technology & Software

Last edited

July 2, 2024

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What Are P-Cards?

P-cards, short for purchasing cards, are essentially credit cards for businesses.

They are designed to enable employees to make purchases using a single credit card instead of going through the traditional procurement process – submitting purchase requisitions, receiving a purchase order, and processing payments.

P-cards are an efficient way of managing small and routine purchases without the need for paperwork and lengthy purchase approval processes.

How Do P-Cards Work?

When your company signs up for a P-card program, you receive a credit card with a preset spending limit.

You’ll give the card to designated employees who can make purchases only up to the credit limit.

These cards work in-person and online, just like any other credit or debit card.

Depending on the bank you use, your cards may have the Visa or Mastercard logo.

You can order multiple cards to distribute to multiple employees if desired.

For example, you may wish to distribute cards to all department heads to keep with them at all times or have cards on hand to give employees while traveling for business.

Your procurement cards can be tied to a bank account or a credit card. The issuing bank sends payments to vendors within a few business days and invoices your company monthly.

P-Card transactions can be tracked in several ways:

By employee or P-Cardholder
By department
By merchant category

At the end of the billing cycle, the card provider bills your organization for all purchases made during that period.

Most programs also provide you with reports that help track spending and monitor fraud or misuse.

Your organization also controls where purchases can be made and how much can be spent in a single transaction.

It’s possible to set per-purchase limits as well as monthly spending caps.

Some providers also allow you to set spending restrictions on the types of allowable purchases, such as no travel, entertainment, or alcohol spending.

These are set using merchant category codes, so that card users cannot attempt to bypass restrictions.

Purchase Cards vs. Corporate Cards

With the availability of corporate cards, why would you even consider using procurement cards? Corporate cards, or C-Cards, are issued to senior executives or employees with higher responsibilities within the company.

C-Cards usually have a higher spending limit than P-Cards, but their usage is monitored more strictly. Moreover, C-Cards can be used for small and large purchases and often come with many other features, including reward programs.

P-Cards are not prepaid cards, and they are not a corporate card. Both P-Cards and corporate cards are a type of commercial card, but it’s important to understand the differences for your business.

Benefits of Using P-Cards

Cost Effective to Manage Small Purchases
When it comes to smaller expenditures like office supplies, going through the formal procurement and payment process could be time-consuming.
If your processes are not refined enough you can end up spending more in employee labor costs than you would when allowing your office manager to make purchases via the Amazon Business account, for example.
This cuts down on your overall procurement costs, allowing you to funnel the savings into other areas of your business.
Easy for Employees to Track Expenses
Using a purchase card makes it easier for your staff to purchase what they need while tracking their business expenses, especially while traveling for business. (You can give them a travel card, a restricted type of P-Card, if you want to limit spending capabilities.)
With easier expense tracking comes better employee compliance. And with more accurate records, you can get a clearer picture of your overall spending habits.
Savings and Rebates
Most P-Card programs offer savings and rebates. The bank you use will determine available offers. These savings and rebates are similar to a personal credit card reward program, where you get a percentage in cash back.
Your company may be able to earn anywhere from 1 to 3% cash back or savings from your purchases.
The exact amount you’ll earn depends on factors such as:
- Volume and amount of purchases
- Number of cards issued
- Payment speed
- Average transaction size
- Whether your company purchases certain expensive products

Drawbacks of P-Cards

Vulnerable to Fraud and Misuse
Because P-Cards are not subject to the same level of scrutiny as regular procurement processes, employees may be tempted to use them for personal gain. Therefore, you must have proper P-Card policies and procedures to mitigate such risks.
Work with your program manager to block purchases from certain merchants and set spending limits to prevent fraudulent charges.
Less Flexible than Corporate Cards
Because purchase cards are tied to specific budgets or departments, you can’t use them to make cross-departmental or strategic purchases.
Could Make Overspending Easier
With fewer purchases going through the formal procurement process, it is easy to lose track of spending.
Maverick spend, or rogue spend, where purchases from suppliers who are not your preferred vendor for purchasing specific items may increase. This can result in less on-contract spend and reduce realized cost savings from strategic sourcing initiatives.
You must be able to adhere to your budget requirements and regularly monitor the transactions.
Failure to do so could mean you spend more than you meant to. While you can bounce back from minor overspending relatively easily, major overspending over a long period of time could spell disaster for your company. Monitoring carefully is a must.

Best Practices for Your P-Card Program

Establish a Clear Usage Policy
Having a well-defined P-Card policy is the first step on the road to success. This policy should be a clear guide for all employees who are issued a P-Card.
It should outline the acceptable purchases, spending limits, documentation and receipt requirements, and the consequences of P-Card misuse.
Make sure that this policy is understood by all employees and enforced consistently.
- Define the roles and responsibilities of cardholders, including the authorized use of their card and the procurement process that applies to P-Card usage.
- Set spending limits, frequency, and card usage instructions, including: frequency of P-Card use, spending limits, types of expenses that can be charged, and card usage protocols.
- Outline account restrictions, ordering practices, and daily expenditure limits.
Foster a Culture of Accountability
Incorporating a culture of accountability within your organization can help prevent financial fraud, waste, and abuse.
Having employees willing to report suspicious activity or expenditure immediately is critical for maintaining a healthy P-Card program.
Ensure that employees understand their responsibilities and have procedures in place to report malfeasance – this can be through an anonymous telephone hotline, email, or other types of reporting mechanism.
Train Your Employees
Those with authority to make purchases with a P-Card should undergo P-Card training. While it might be self-explanatory to some, others can make costly mistakes that lead to problems.
Investing time into P-Card training shows a commitment to compliance and helps prevent unintentional spending.
Whether you do in-person or online training, include the basics of P-Card usage, reporting requirements, documentation and receipt requirements, and other relevant information in training sessions.
Also, keep track of those who attend the trainings and who missed them.
Create a Strong Approval Process
Having a strict approval process helps avoid fraudulent or wasteful expenditures. Ensure that at least two people (a requestor and approver) are involved in each P-Card transaction.
The approver should verify that the listed expense is reasonable and adds value to the business before approving the transaction.
Keep a log of approvals and requests, electronically or physically, depending on the size of your company, to maintain a solid audit trail.
Analyze and Review Your P-Card Usage Regularly
Periodically review your P-Card expense usage to determine whether purchasing adds value to your organization. Identify any outliers, such as excessive spending or transactions outside your P-Card policy’s acceptable purchases.
Having an appointed person or team to monitor P-Card spending regularly helps identify any red flags early and avoid any issues.

Implementing best practices for your P-Card program is essential for any business using P–cards.

Not only does it offer a straightforward and effective way to manage your purchasing program, but it also prevents fraud, waste, and abuse.

It’s better to set up a clear policy, establish accountability, enforce training, implement a strong approval process, and regularly analyze your P-Card usage to ensure your card program remains healthy.

A little effort now saves time, money, and many headaches down the road.

How to Get Purchase Cards for Your Company

Research Issuing Banks
Not all P-Card programs are created equally, so take some time to compare your options. Look at factors such as interest rates, fees, credit limits, and any available rewards or benefits.
Think about what types of purchases you’ll make with the card, and choose the one that fits your business’s specific needs.
Be sure to read the fine print carefully and ask the financial institution any questions you may have before deciding on which one to apply for.
Understand Policies and Restrictions
Familiarize yourself with the policies and restrictions that come with the P-Card provider you are choosing. Each issuing company sets specific rules that users must follow when making purchases.
It is essential to understand these guidelines to avoid unnecessary charges and penalties.
Review Eligibility Requirements
Most issuers require that you have a good credit history and a consistent track record of timely payments.
Additionally, you should be an authorized representative of your organization and have the ability to make financial decisions on behalf of your company.
Gather Necessary Documents
Gather your essential documents for the application process. These usually include your tax identification number, proof of your business’s legal existence, and a copy of your company’s financial statements.
Some issuers may also require additional information, so check with them beforehand.
Submit the Application
Submit your P-Card application. You can typically do this online by filling out an application form and submitting the necessary supporting documents. Depending on the issuer, you may also be required to undergo a credit check.
Finalize Application Processing
After submitting your application, following up with the issuer is essential to ensure your application is being processed.
Typically, it takes between 7 to 14 days for the issuer to review your application and send a response. If your application is approved, you will receive your P-Card information and instructions on how to use it.

P-Card FAQs

What Is a P-Card Used for?

It is used for small corporate purchases or business travel. It gives employees access to company money for buying items their company requires.

What Is the Difference Between a Corporate and P-Card?

Corporate cards are issued to people higher in the company that have more to do with overall purchasing and spending. They usually have higher spending limits and fewer purchasing restrictions.

What Does P-Card Stand for?

P-Card stands for purchase card, purchasing card, or procurement card. It’s a type of commercial card.

What Is the Credit Limit for a P-Card?

Your credit limit depends on various factors, such as your total business revenue, the types of purchases, and issuing bank policies. Your P-Card administrator will inform you of your credit limit and any actions you can take to increase the limit later.

With an effective purchasing card program, your organization can realize cost savings and increased efficiency. P-Cards streamline the payments process and reduce manual labor costs associated with generating and submitting purchase orders.

In addition, they increase accuracy while ensuring that payment is made quickly.

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What’s your goal today?

1. Use Planergy to manage purchasing and accounts payable

Read our case studies, client success stories, and testimonials.
Visit our Purchase Order Software page to see how Planergy can digitize and automate your purchase order process saving you time and money.
Learn about us, and our long history of helping companies just like yours.

2. Download our “Indirect Spend Guide”

3. Learn best practices for purchasing, finance, and more

Browse hundreds of articles, containing an amazing number of useful tools, techniques, and best practices. Many readers tell us they would have paid consultants for the advice in these articles.

The post P-Cards: What Are Corporate Purchasing Cards and How Do They Work appeared first on Planergy Software.

Expense Reimbursement: What Is It, How To Manage, and What Should You Cover

Rob Biedron — Wed, 05 Jul 2023 09:02:11 +0000

Download a free copy of "Indirect Spend Guide", to learn:

Where the best opportunities for savings are in indirect spend.
How to gain visibility and control of your indirect spend.
How to report and analyze indirect spend to identify savings opportunities.
How strategic sourcing, cost management, and cost avoidance strategies can be applied to indirect spend.

Download Free Copy

Expense Reimbursement: What Is It, How To Manage, and What Should You Cover

Category

Travel & Expense

Written by Rob Biedron
15 min read

Tags

Expense Management Expense Reporting Process & Procedures

Last edited

July 2, 2024

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KEY TAKEAWAYS

Proper expense management ensures employees are reimbursed for qualified out-of-pocket spending and that you receive the appropriate business tax breaks.
Clearly outline a policy that covers what expenses are eligible for reimbursement and what are not.
Make sure employees are aware of the policy and what documentation they will need to submit with their reimbursement request.

Expense reimbursement is when an organization provides money to its employees or contractors to cover expenses they have incurred while conducting business on behalf of the organization.

This payment type is typically used when employees purchase items or services necessary for their job, such as travel expenses. Let’s take a closer look at expense reimbursement and why it matters.

Why Is Expense Reimbursement Important?

Expense reimbursement allows businesses to accurately track their spending and ensure that employees are not out of pocket for any legitimate business-related costs.

It also prevents employees from paying upfront for items they may need to complete their job tasks; instead, they can wait until they have been reimbursed before purchasing them.

For companies with multiple employees or contractors who travel frequently, expense reimbursement is especially important to ensure accurate tracking of all expenses.

How to Streamline Your Reimbursement Process

Reimbursing business expenses can become quite complex, especially if many employees make work-related purchases with their own money.

Regardless of how many reimbursement requests you expect to process within a calendar year, keeping records is crucial for accounting and taxes. Any reimbursement to employees is a business tax deduction.

1. Track Every Detail
  
  The first step in streamlining your business’s expense reimbursement process is to track every detail. This means having a system to track all expenditures, including travel expenses, meals, and other miscellaneous costs.
  
  Having detailed records of where the money is going makes it easy to reconcile the expenses with their respective accounts when it comes time to reimburse them.
  
  Tracking each expenditure will help you identify potential issues or discrepancies that could cause problems later.
  
  You’ll need to know the five Ws to track, monitor, and effectively handle expense management properly. These are:
  - What
    
    What are you spending your money on? This is important to understand what kind of expenses you should be aware of and manage.
  - Who
    
    Who is making the purchases? Knowing who is responsible for each transaction will help you build accountability into your system.
  - Where
    
    Where are expenses being made from? Tracking where the money was spent is essential for accurately tracking your finances.
  - When
    
    When were these purchases made? It’s important to know when items were purchased, or services were rendered so that you can properly manage payments.
  - Why
    
    Why were the purchases made? Understanding why an expense was made will help inform future budgeting decisions.

Use Automation

Expense management automation tools can save time and eliminate tedious tasks such as manually entering data into spreadsheets or sending emails requesting receipts.

Automation can also be used to set up reminders for employees who are late submitting their expense reports or need additional information from their managers before they can be reimbursed.
Implement Policies and Guidelines

The policy should include definitions of what constitutes an eligible expense, including travel costs, meals, supplies, and training materials.

It should also include details on what type of documentation is required for the claim—such as receipts and itemized statements—as well as a timeline for submitting the claims.

Additionally, it’s important to note if there will be limits on certain types of expenses, such as entertainment costs or mileage reimbursement rates.

Explain the process after the claim has been submitted is important—including when and how employees will receive their reimbursements.

If there is an internal audit process for all claims, then this should also be noted in the policy so that employees can expect delays if their claims are flagged for review before approval.

Creating Your Employee Expense Reimbursement Plan Step-by-Step

Ensure Your Plan Is Accountable

If your plan is “accountable,” it generally allows for tax-free reimbursement.

To be considered accountable, the plan must have these elements:
- Business Purpose: A legitimate business reason for the expense.
- Validation: Proof of the total expense via receipt.
- No Extras: Only the exact amount of the business expense is reimbursed. If there are any extra funds available from an employer-provided stipend, such as per diem rates, it must be returned to the employer. Only the actual cost of expenses will be reimbursed.
Make Your Plan Department of Labor Compliant (for USA-Based Companies)

The U.S. Department of Labor has set regulations regarding the proper documentation of employee expenses, requiring all items to be meticulously recorded with receipts provided and all five “Ws” attended to.

Itemized receipts are required for meal reimbursements. For organization-owned or leased vehicles, accurate data must be supplied, including date of travel, number of miles driven for personal/business purposes, and odometer readings.

Though the DOL does not make any exceptions for costs under $75, a signed statement from the employee can be provided as proof of expense if a receipt is lost.

These guidelines ensure proper recordation and compliance with government regulations while legitimately safeguarding all employee expenses incurred while on duty.
Define What Business-Related Expenses are Eligible for Reimbursement

Your plan should clearly state what expenses you’ll reimburse and what expenses you won’t. It should also state at what rate they’ll be reimbursed.

For instance, the General Services Administration publishes per diem and standard mileage rates. Your business can pay employees those standard rates or for the actual expenses.

Per diem rates provide allowance for food, lodging, mileage/transportation, and other expenses.

They’re based on location, so travel to Los Angeles, New York City, or other high-cost locations will have higher limits than lower-cost locations.

Several business-related expenses can be eligible for reimbursement when proper documentation is provided. These include:
- Travel costs such as airfare, hotel accommodations, rental cars, ground transportation, and other related expenses
- Meals while traveling including breakfast, lunch, and dinner
- Supplies purchased for business use, such as stationery, pens, and other necessary items
- Training materials such as books or online subscriptions
- Mileage for business travel taken in a personal vehicle
- Any additional costs required to fulfill the job duties of an employee
Your policy should clearly state the types of expenses that are not eligible for reimbursement, such as entertainment expenses, gifts, or alcohol purchases.

It should also outline the types of expense claims that may require additional documentation beyond a standard receipt—such as itemized statements or proof of payment.

For example, will you require employees to use public transportation while on a business trip? If they’re traveling to an area where public transportation isn’t widely available, will you provide a stipend for ride-share services? Will they be allowed to rent a vehicle? If they rent a vehicle, will they be required to share it with other employees who may also be on the trip?

If your small business policy requires that they use public transportation where available and choose not to, employees should be aware that they will use their own money to pay for commuting during the trip.
Outline How to Handle Reimbursement Requests

Your expense reimbursement policy must tell employees what the organization will cover, how they should submit reimbursement requests, and how quickly they can expect payment.

It should include the required documentation to submit with the request, the timeframe for submitting the request, where to submit the request, and who to submit it to.

Any time an employee pays a business expense out of their pocket, they should be aware of what is covered by the expense reimbursement policy.

Reimbursements and Income Taxes

What Is the Difference Between a Reimbursement and a Deduction?

A reimbursement is a compensation your company pays to an employee for out-of-pocket expenses they pay.

Typically, they aren’t considered taxable income.

A deduction is an expense that can be subtracted (deducted) from a taxpayer’s gross income to reduce the amount subject to taxes.

If the reimbursement is considered taxable income, then the employee can deduct it from their taxes. If it is not taxable, it cannot be deducted.

Do Expense Reimbursements Count as Income?

Under IRS regulations, job-related expenses shouldn’t be counted as taxable income.

You aren’t to include them on the W2 form as part of the employee’s income because job-related expenses are deductible business expenses for your organization.

Per diem rates, as long as they remain below the top rate, are not subject to taxes.

However, if your company uses a nonaccountable plan, reimbursements received outside the rules of that plan are considered taxable income and required to be reported as income on a W2.

This allows employees to deduct the expenses on their personal tax returns.

How Are Expense Reimbursements Taxed?

If the expenses are made, reported, and paid under the terms of an accountable plan outlined above, they are not taxed.

If the expenses are made, reported, and paid under the terms of a nonaccountable plan, then it is taxed as part of the employee’s income. Unless it is deducted, it would be taxed as income.

Expense Reimbursement and Independent Contractors

The same rules apply here to employees with accountable vs. nonaccountable plans.

The reimbursable expenses should not be included as income on the 1099 NEC or 1099 MISC form, as they are not part of the contractor’s income under accountable plans.

If your expense reimbursement plan is not accountable, those reimbursements are added as income and can be deducted from the contractor’s tax return as business expenses.

Expense reimbursement is an important part of any organization’s accounting system.

It helps businesses accurately track their spending and ensures that employees aren’t left paying out-of-pocket for any legitimate business-related costs.

By understanding what expense reimbursement covers and why it matters, businesses can better manage their organization’s finances effectively and efficiently.

Download PDF

What’s your goal today?

1. Use Planergy to manage purchasing and accounts payable

Read our case studies, client success stories, and testimonials.
Visit our Workflow Automation Software page to see how Planergy can digitize and automate your processes saving you time and money.
Learn about us, and our long history of helping companies just like yours.

2. Download our “Indirect Spend Guide”

3. Learn best practices for purchasing, finance, and more

Browse hundreds of articles, containing an amazing number of useful tools, techniques, and best practices. Many readers tell us they would have paid consultants for the advice in these articles.

The post Expense Reimbursement: What Is It, How To Manage, and What Should You Cover appeared first on Planergy Software.

Travel and Expense Management: What Is It, Challenges and Best Practices

Lyle Del Vecchio — Tue, 30 May 2023 12:42:42 +0000

Download a free copy of "Indirect Spend Guide", to learn:

Where the best opportunities for savings are in indirect spend.
How to gain visibility and control of your indirect spend.
How to report and analyze indirect spend to identify savings opportunities.
How strategic sourcing, cost management, and cost avoidance strategies can be applied to indirect spend.

Download Free Copy

Travel and Expense Management: What Is It, Challenges and Best Practices

Category

Travel & Expense

Written by Lyle Del Vecchio
16 min read

Tags

Expense Management Expense Reporting Process & Procedures

Last edited

December 15, 2023

Download PDF

What Is Travel and Expense Management?

Travel and expense management (TEM) is the process of streamlining an organization’s travel spending.

TEM encompasses everything from booking airfare and hotels to managing ground transportation and expenses.

An effective TEM solution will help an organization save money, time, and resources while providing visibility into spending patterns.

The goal of T&E management is to ensure that employees only spend money on essential expenses while on business trips.

There are many different aspects of T&E management, but some of the most important include the following:

Approving or denying employee travel requests;
Pricing and booking flights, hotels, and rental cars;
Managing corporate credit cards;
Submitting and approving expense claims;
Handling expense reimbursement;
Auditing expenses for compliance; and
Providing employees with guidance on company travel policies.

As you can see, a lot goes into managing business travel. But by implementing T&E management best practices, you can make the process simpler and more efficient.

Challenges of Travel and Expense Management

Employee Resistance to Change

One of the most common challenges businesses face when implementing a new T&E management strategy is employee resistance to change.

Let’s face it—most people don’t like change, and when it comes to something as personal as travel plans, that resistance can be even greater.

The key to overcoming this challenge is communication.

When introducing a new T&E management system, take the time to explain why the change is necessary and how it will benefit both the employee and the company as a whole.

If possible, allow employees to test the new system before it’s fully implemented.

This will allow them to get comfortable with it and provide feedback that can be used to improve the system before it goes live.
Lack of Visibility Into Spend

Another big challenge businesses face when it comes to travel expense management is a lack of visibility into spend.

This can happen for many reasons, but the most common is simply not having an effective system to track employee spending.

Without visibility into spend, it’s very difficult to control costs.

You may be able to save some money here and there, but you’ll never get a true picture of where your money is going and how you can save more.

Implementing an automated travel and expense management solution is the best way to overcome this challenge.

With such a solution, you’ll always have visibility into employee spending, no matter where they are in the world, for more efficient spend management.
Manual Processes

Many small businesses have a limited technology budget, many rely on manual processes, specifically spreadsheets, to track their data.

In the beginning, spreadsheets may seem like an efficient way for finance teams to track employee spending, but they quickly become unmanageable as your business grows.

Not only that, but manually inputting data into spreadsheets is time-consuming and error prone.

The best way to overcome this challenge is to automate as much of the process as possible.

By implementing an automated travel and expense management solution with approval workflows, you’ll be able to eliminate manual processes and free up your employees’ time so they can focus on more important tasks.
Lack of Policy Enforcement

Another common challenge businesses face when managing travel and expenses is a lack of policy enforcement.

This can happen for several reasons, but the most common one is that businesses don’t have clear policies around expenses.

Without clear policies, employees are free to spend whatever they want, whenever they want, with no consequences.

This can quickly lead to uncontrolled spending, which can strain your business’s budget.

The best way to overcome this challenge is to create clear policies around travel and business expenses, including details about expense approval and the reimbursement process, and enforce them strictly.

Defining what can be an expense and what requires pre-approval as a purchase order will be an important part of any policy.

A separate purchase order policy can be defined for those scenarios.

By defining your policies, you’ll be able to control costs and keep your budget healthy.
Filing Expense Reports

Filing expense reports can be time-consuming and tedious—but it doesn’t have to be! With the right tools, you can automate the process so that all you have to do is snap a picture of your receipts, and they’ll be filed away automatically.

Using this approach creates a better user experience for everyone in the company.
Dealing with Reimbursements

If your company reimburses employees for their travel expenses, you’ll need a system to process those reimbursements quickly and efficiently.

Otherwise, employees may be left waiting weeks (or even months!) for their reimbursement check to arrive in the mail.
Fraud and Misuse

Fraud and misuse of travel and expense management systems can be a major issue for your company, and it can result in significant financial losses.

Employees can misuse company funds by submitting false expenses or using company funds fraudulently for personal trips.

To prevent fraud and misuse, organizations need to implement measures to detect and prevent fraudulent activities.

This includes audits, expense policy enforcement, employee training, and automated systems to flag potentially fraudulent expenses.

It is also important to have clear policies regarding the use of company funds and to communicate them effectively to all employees.
Integration with Other Systems

Travel and expense management systems must integrate with other systems, such as your ERP, accounting and payroll, to ensure accurate and timely expense reporting and reimbursement.

Integration with other systems can help reduce errors and increase efficiency by automating data transfer between systems.

This can include automatically generating invoices, updating accounting records, and processing payroll.

Integrating travel and expense management systems with other systems can also provide real-time insights into expense data, allowing organizations to identify trends and optimize spending.
Employee Satisfaction

While managing travel and expenses, it is essential to ensure that employees are satisfied and engaged with the process.

Lengthy approval processes, delayed reimbursement, and unclear policies can lead to employee frustration and dissatisfaction.

This can ultimately impact employee productivity and engagement.

You must ensure that the travel and expense management process is user-friendly and easy to use.

This can include providing employees with clear policies and guidelines, using mobile apps for expense reporting, and streamlining the approval process.

Providing employees with real-time access to expense data can also help increase their satisfaction by giving them more control over their expenses and reducing delays in reimbursement.

Start by developing processes, then evaluate solutions to help support those processes. Ask for employee feedback during the entire process.

Benefits of Effective Corporate Travel Management

Cost Savings

Cost savings is one of the most significant benefits of travel and expense management.

By managing travel expenses effectively, organizations can reduce expenses, identify areas for cost-cutting, and optimize their travel spend.

Effective travel and expense management can help organizations negotiate better rates with travel vendors and reduce the incidence of fraudulent expenses, leading to substantial savings over time.
Improved Compliance

Travel and expense management systems can help organizations ensure compliance with company policies and regulatory requirements.

By automating expense policies, organizations can ensure that expenses align with company guidelines and that all necessary approvals and receipts are obtained.

This can help minimize the risk of non-compliance and reduce the likelihood of legal or financial penalties.
Increased Efficiency

Travel and expense management systems can automate manual processes, such as data entry and approvals, leading to increased operational efficiency and productivity.

This can free up employees’ time to focus on other tasks and reduce the risk of errors and delays in processing expenses.

Automated systems can also provide real-time insights into expense data, allowing organizations to identify trends and optimize spending quickly.
Improved Visibility

Effective travel and expense management can give organizations greater visibility into their expenses.

This can help identify areas for cost-cutting and optimize spending.

Greater visibility can also help organizations negotiate better rates with travel vendors and ensure they get the best value for their money.
Better Employee Experience

A well-managed travel and expense management process can help improve the employee experience by reducing the administrative burden of managing expenses and providing timely reimbursement.

This can lead to greater employee satisfaction and engagement, ultimately benefiting the organization.

Best Practices for Travel and Expense Management

Create a Central Repository

Having all your travel and expense information in one place will make it much easier to keep track of.

Expense management software generally includes document storage to make it easier to manage all aspects of your travel program.

Use it to store travel booking confirmations, corporate card statements, transaction receipts, and more.
Establish Policies and Procedures

Before employees start booking travel, ensure they’re aware of your company’s policies regarding travel expenses.

Will you reimburse for airfare, hotels, meals, etc.? What types of expenses need to be pre-approved? Will you require the use of a corporate card or can they use a personal card? Will you issue virtual cards for them to use?

Having clear guidelines in place can avoid any confusion or misunderstandings down the road.
Encourage Employees to Use Company Cards

If your company offers corporate credit cards, encourage employees to use them for all business-related travel expenses.

This will not only help keep track of expenses but can also help earn rewards like points or cash back.
Review Expenses Regularly

Set aside time each week or month to review submitted expense reports. This will ensure that all employee expenses are accounted for and that there are no discrepancies.

If you catch an error or discrepancy, be sure to follow up with the employee right away.

Manage Your Travel and Expense Program with Planergy

Overall, travel and expense management is fundamental to any successful business.

It requires hard work and dedication to maintain visibility into spending and keep costs under control.

While there is no ‘one size fits all’ approach to travel and expense management, businesses should look to select a strategy that best meets their organization’s needs.

A dedicated travel and expense software, like Planergy, will have flexibility and control to match your needs.

Regardless of the approach taken, travel spends should be closely monitored throughout the year in order to remain compliant with internal and external policies while ensuring that more money remains in the bank.

When it comes to travel and expense management, planning ahead is key.

Adopting best practices can help reduce overhead costs quickly — setting the groundwork for long-term fiscal success.

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1. Use Planergy to manage purchasing and accounts payable

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The post Travel and Expense Management: What Is It, Challenges and Best Practices appeared first on Planergy Software.

Travel and Expense Policy: What Is It, Example Template, and Best Practices

Rob Biedron — Thu, 09 Feb 2023 11:24:33 +0000

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Travel and Expense Policy: What Is It, Example Template, and Best Practices

Category

Travel & Expense

Written by Rob Biedron
19 min read

Tags

Expense Management Expense Reporting Process & Procedures

Last edited

July 2, 2024

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What Is a Travel and Expense Policy?

To travel for work-related purposes, employees often need to submit a travel expense report detailing their costs.

This can include travel costs like airfare, hotel, and other miscellaneous expenses like meals and incidentals.

Many companies have a travel and expense policy outlining the rules and procedures for submitting these reports.

In this blog post, we will discuss what a travel and expense policy is, provide an example template, and outline some best practices.

Why You Need a Travel and Expense Policy

Establishing a travel and expense policy for your business is a wise choice.

A clear policy defines allowable expenses for any business trip, which reduces the chance of unnecessary or inappropriate charges.

It’s efficient and cost-effective to have a predetermined budget for each employee that adheres to the company’s financial regulations – this ensures employee reimbursements are issued following company standards.

Having all of these processes itemized allows you to track spending more accurately, so there won’t be unwelcome surprises during the budget season either.

With a travel and expense policy in place, your organization can manage employee journeys and reimbursements competently.

With rules in place, it’s easier to predict how much each traveler will spend on business travel expenses, making overall expense management easier.

Other benefits include:

Tax write-offs for the company and IRS regulations compliance.
Fraud prevention.
Streamlines reimbursement.

Considerations for a Policy that Works for Your Business

Using a blanket T&E policy may be tempting, but the fact is, no two companies operate the same way.

They should have customized policies that fit the company’s needs while supporting employees.

At its core, the policy should address how employees are expected to pay and be reimbursed for trips taken on behalf of their company.

The policy must also feature detailed guidelines surrounding who is authorized to book travel arrangements and any limits and restrictions.

Companies may also want to consider implementing a pre-trip authorization process, and requiring all expenses related to the trip to be documented in order due documentation for reimbursement purposes.

Keeping your travel and expense policy up-to-date with current laws, regulations, and industry standards is important for maintaining compliance with current laws, so companies should stay aware of changes that may affect their policies.

Put Finance and HR to Work Together

To start crafting a T&E policy for your organization, arrange a meeting with both finance and human resources.

Collaboration and cooperation between these two teams are crucial.

The finance department provides information about current expenses and supports creating the guidelines employees need to follow. HR then communicates the policy to employees and enforces compliance.

Consider Multiple Factors Unique to Your Organization

Some companies may choose to reimburse incidental expenses. Some companies provide a per diem allowance, while others only reimburse actual expenses.

Start by looking at your organization’s current travel spend. As you analyze the data, consider the following:

How often do employees travel?
How much does the average business trip cost?
What percentage of employees travel?
What is the return on investment of these trips?
Measuring ROI on business trips can be difficult, depending on the nature of the trips and the reason for them.

With the answers to those questions in hand, consider:

Methods of Travel: Which methods of travel are acceptable? Will employees be able to travel in business class or first class, or is air travel limited to coach only? Will you cover any extra luggage fees? What about ground transportation? What’s the maximum spending limit? Are there special rules that apply to international travel?
Lodging Expenses: What is the limit for a hotel room? Are employees required to stay at a certain hotel or within a certain chain?
Personal Vehicle Expenses: How will employees report mileage? What’s the maximum you’ll reimburse for parking expenses?
Meal Expenses: What is the per diem for meals? Are all three daily meals covered? Are they allowed to take clients to dinner? Will you reimburse room service? Are entertainment and related expenses included while on the trip?
Miscellaneous Expenses: Think of this as the unexpected. What if an employee’s luggage is lost and they need to purchase new clothes? What if they get bumped from their flight, and there’s an additional fee to rebook? What if the car rental company doesn’t have the economy car that was booked?
Company Credit Cards: Who is allowed to use the cards, and what can they use them for?
Expense Reporting Process: How are employees to track their out-of-pocket expenses? Who do the employee expense reports go to? How do they submit them? Are original receipts required, or will scanned/photographed versions suffice?

How to Create an Effective Policy for Your Organization

Outline everything you deem acceptable in the above categories. If certain things aren’t covered, make sure those are clearly defined.

For example, meals are covered, but alcoholic beverages are not.

Define what is considered an acceptable business purpose. Will you cover trips for continuing education?
Define who is authorized to book travel arrangements. What booking tools can be used?
Define how to turn receipts and expense reports.
Define the acceptable timeframe for reimbursement requests (such as within 15 days after the trip is complete) and when employees can expect to receive the reimbursement.
Include any other guidelines for reimbursable expenses, including rules for upgrades, tolls, mileage rate, per diem rates for each department, gratuities, etc.

Once these details are outlined, it’s time to put them together into a formal travel policy.

Your business needs a travel management policy, but it can be hectic to put one together. Our template will help.

Travel Expense Policy Template

Your policy should be broken down into six sections:

Introduction
Travel Booking Process
Business Expense Categories
Non-Reimbursable Purchases
Expense Reporting and Reimbursement Process
Travel Support, Safety, and Duty of Care

Introduction

Use this section to let your staff know your policy isn’t just more red tape – it’s designed to keep them safe, keep things fair, reduce confusion, and ultimately, save time.

Depending on your organization, you may have multiple policies – different policies depending on the department or type of employee. If that’s the case, your introduction should also include who the policy is for.
Travel Booking Process

Use this section to include everything your team needs to know about where and how to book travel – whether someone will make the arrangements for them or they will make the arrangements themselves.

Here’s where you outline:
- How to Book Travel
  
  Include your process, method, and platform for booking any company travel. It’s ideal to use a platform to allow employees to book options within policy. If you do, include the name of the platform.
  
  If employees cannot book their own travel, include the name and contact information of the travel agency or company employee who will take care of booking the travel arrangements.
- Approval Process
  
  Include the details of the approval process, especially for senior management. The approval process for the C-Suite and senior employees may vary from others.
- Leisure Extensions
  
  If you want business travelers to be able to extend their trip to the weekend or use vacation days for additional time, include rules around these extensions.
  
  Include details about the allowable difference for return flights and what separates personal expenses from business ones.
  
  Make it known that they will incur additional costs that your company will not reimburse.
- Loyalty Program Usage
  
  Many companies don’t let employees accrue personal loyalty points on business travels.
  
  But, if you trust your team to do the right thing, include a line that says something along the lines of, “Employees must not choose more expensive travel options for the sole purpose of gaining additional loyalty points.”
- Traveling with Non-Employees
  
  Expenses related to traveling with spouses or other family members, pets, or friends outside of the company aren’t generally eligible for reimbursement.
  
  If any situations are subject to approval, such as attending a networking event, outline these possibilities.
Business Expense Categories

This is a crucial part of your template as it outlines what employees can expense. This is key to keeping things as cost-effective as possible.

Air Travel
- Preferred vendors
- Approved tools or methods of booking
- Rules regarding allowed travel class
- How many days in advance must flights be booked for both domestic and international travel.
Accommodations
- Preferred vendors and negotiated rates, if any
- Approved tools or methods of booking
- Maximum nightly rate
- Rules regarding standard rooms and upgrades – for instance, upgraded rooms are only allowed when standard is completely booked
- Reimbursable costs – parking, etc.
- Rules for booking house-sharing or apartment rentals
Rental and Personal Vehicles
- Allowed types of rental car class
- Number of employees expected to share a vehicle when traveling together
- Mileage reimbursement rate, per mile or kilometer
Rail Travel
- Approved tools or methods of booking
- Type of ticket allowed
Taxis and Ride-Sharing Services
- Maximum amount per transaction
- When use of these services is allowed (particularly in areas where airport shuttles or public transport isn’t practical)
Events and Conferences
- Reimbursement process for registration if it was not pre-paid.
- Process for other event or conference-related expenses, such as meals or things not included in the registration cost
Meals, Travel, and Entertainment
- The maximum reimbursable amount for each breakfast
- The maximum reimbursable amount for each lunch
- The maximum reimbursable amount for each dinner
- Or a daily maximum or per diem
- Personal meal expenses throughout the trip
- Rules for business meals
- Rules for client entertainment expenses, including maximum amounts and what’s allowed
Personal Telephone Use
- The amount of the cell phone bill or percentage that can be reimbursed during the employee’s travel period. Include whether calls made for personal reasons will be covered.
- Whether or not theft of or damage to the personal phone is reimbursable during business travel, and if so, the maximum allowable amount.
Non-Reimbursable Purchases

Keep a list of the things your company won’t reimburse, so people know ahead of time that certain things will come out of pocket at their expense.

Get input for your chief financial officer and the employees who travel most often to determine what’s far to exclude across the board.

It should be clear that your business expense policy will only cover travel-related and business-related expenses and nothing else.

Examples include:
- In-flight purchases
- Childcare or pet boarding
- Costs related to non-employee travel
- Laundry and dry cleaning
- Room service
- Damage to personal vehicles
- Airline ticket change fees
- Traffic violations or parking tickets
- Airline club memberships
- Excess baggage fees
- Premium or luxury car rentals
- Rental car insurance coverage
- Minibar or alcoholic beverages
- Online entertainment, movies, newspapers, etc.
- Clothing and toiletries
Expense Reporting and Reimbursement Process

This section should cover the following:
- The expensing tool to use
- The items that do not need to be added to the expense tool (such as if the trip is booked within the approved booking tool)
- Who to submit reports to
- What to include in the reimbursement requests
- Deadline for request submissions
- Typical processing time for requests
- Policy on personal credit card use
Travel Support, Safety, and Duty of Care

Your policy needs to be something people want to read. It must include information they need to know to familiarize themselves with.

Your staff wants to stay safe while traveling, so including information about their safety and what to do if an emergency arises is key.

Tracking Whereabouts

Let your employees know that when they book with your approved tools or methods, the trip is tracked, so if there is an emergency, you’ll take steps to evacuate them. If you don’t know where they are, you can’t assist.

Include the approved tool’s name, and what they need to do to ensure their trip is tracked if they cannot book within the tool for a valid reason.

Travel Support

Include information about who to call if there are trip changes or cancelations. Provide contact information for the travel support provider, such as email address, phone number, etc.

Emergencies

If an emergency arises, there should be information about who to contact, including your travel insurance policy information. Include employee and vendor contact information for the point of contact in an emergency.

Implementing Your Policy

Customize the template to your needs, and automate it when possible.

This ensures employees will always book within policy guidelines at any given time.

Deploy the policy with employees, and collect feedback.

Make sure your team is clear on the policy and all its details. Ask them about how easy it is to use the approved tools.

Developing and deploying a travel policy is critical for procurement to keep a close eye on corporate travel expenditures. We hope this makes the process easier for you.

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What’s your goal today?

1. Use Planergy to manage purchasing and accounts payable

Read our case studies, client success stories, and testimonials.
Visit our Purchase Order Software page to see how Planergy can digitize and automate your purchase order process saving you time and money.
Learn about us, and our long history of helping companies just like yours.

2. Download our “Indirect Spend Guide”

3. Learn best practices for purchasing, finance, and more

Browse hundreds of articles, containing an amazing number of useful tools, techniques, and best practices. Many readers tell us they would have paid consultants for the advice in these articles.

The post Travel and Expense Policy: What Is It, Example Template, and Best Practices appeared first on Planergy Software.

The Benefits of Expense Management Automation

Lyle Del Vecchio — Tue, 22 Sep 2020 14:32:56 +0000

Download a free copy of "Preparing Your AP Department For The Future", to learn:

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How AP can improve relationships with your key suppliers.
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How better management in AP can give you better flexibility for cash flow management.

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The Benefits of Expense Management Automation

Category

Travel & Expense

Written by Lyle Del Vecchio
12 min read

Tags

Expense Management Expense Reporting Technology & Software

Last edited

April 18, 2024

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Many businesses rely on invoice processing automation to help improve productivity and decrease the frequency of financial error.

With expense management automation, businesses can further their productivity and keep a closer eye on the company’s second-largest controllable cost – employee business expenses.

Even if you have tightly controlled limits on corporate credit card accounts, keeping track of everything can be a big hassle.

Research shows that processing a single expense report costs an average of $58. If your organization has 10 employees away on business trips to will it submit expense reports, statistically, you’re spending nearly $600 to process the reports.

Your business will be far better served by using that $580 to invest in an expense management system to automate your expense management processes much the same way your procurement processes can be automated.

Automation Eliminates Paperwork and Manual Reporting

There’s no need to keep a paper record of everything or spend hours creating and editing spreadsheets with formulas. Your employees have to keep track of their paper receipts to record expenses, and the finance team has to go through all the paperwork to verify everything and approve the expense reports.

That takes time and leaves plenty of room for error. Even if your staff submits perfect expense reports, the finance team can still make mistakes when transferring information from the spreadsheet to the accounting system.

Automation eliminates paperwork because when an expense management system is in place, employees can capture their receipts with their smartphones, then upload them to the expense platform via a mobile app.

From there, they can quickly compile it all into an expense report and submit directly to the finance department.

Even if an error is made, the finance department can trace it back to where it occurred, which is difficult to do with paper records.

Makes Approval and Reimbursement Faster

Turning to an automated expense management solution speeds up both approval and reimbursement.

With the manual process, finance managers and accountants spend a lot of time reviewing each expense report and moving tasks from one approver to another, which causes delayed reimbursement.

If a group of employees has just returned from a business trip, your finance team will end up with a stack of envelopes full of receipts on their desks by the end of the day.

Then, they’ll have to check to make sure each receipt is legitimate by verifying it against the policy. If they put one of the envelopes off for a few days, or unintentionally miss a receipt, the employee’s reimbursement is inaccurate.

With an automated system to handle the approval process, once an approver has approved the report, the task automatically goes to the next approver in line, who is notified to complete their part of the process. Once the approvals are collected, the finance manager can review and reimburse the expense with ease.

Protects Against Expense Fraud

When you rely on manual processes, you’re making it easier for employees to commit expense theft. It’s possible to submit the same receipt twice, and round up mileage expenses.

Controlling things like this because manual processing makes it hard to identify suspicious claims and follow up with the employee to resolve the issue.

An easy way to rid your company of expense fraud is to automate travel expense management.

Automate will pick up on duplicate entries where the same expense is submitted more than once and sends the submitter (and approver) a message to have them either merge or delete the expense.

Using customized workflows, you not only streamline efforts but increase overall transparency because you can set up a double review process, so there’s at least one other review after the approver reviews it before reimbursing the expense, ensuring that all expense reimbursements are valid and accurate.

Increased Spend Visibility

Manual expense management is not only time-consuming, but it also makes it hard to have real-time visibility into your expenses.

Even though you can use the reports and spreadsheets, that data is often outdated by the time you analyze it. Accounting software may automatically generate reports, but without that current expense data, anything you derive from it won’t give a completely accurate picture of what the company’s financial situation looks like.

Even if your accounting teams go through everything on a weekly basis and come up with a report, this isn’t enough to make quick and informed decisions.

Most expense management systems provide an extensive library of report options from expenses, trips, to policy violations, reimbursements, and more. You can use the policy violators report to determine the employees who are most often submitting business travel expenses outside of your policy.

You can generate an “Expenses by category” report to see patterns in staff spending. Beyond making decisions quickly, these reports make it easier for your finance and travel teams to work together to narrow down the best vendors for airline travel and hotel stays.

This way, your procurement team can work to negotiate a better deal for cost savings.

Improves Policy Compliance Rates

Without formal expense management software in place, it can be difficult to enforce expense policies, which makes maintaining compliance nearly impossible.

Once a variety of expenses start coming in, it’s hard for the finance team to make sure the expenditures are properly entered into the spreadsheet. They would have to manually validate each expense against the travel expense policy.

Not only this but manually processing expenses also allows for out-of-policy transactions to slip through, meaning you’re paying employees for doing something they’re not supposed to.

You can customize the entire process so everything is in line with your company’s travel policy. The system will automatically notify approvers of employee expenses that violate the travel policy, as they occur. This allows your team to check for compliance and approve or reject expense claims in real-time, with just a few clicks.

It’s also a good way to educate your team on what they can and cannot spend, and the approved vendors they can spend with.

If an employee tries to submit an expense that’s outside of the hotel rate, meal allowance, or is otherwise is not allowed by the policy, they’ll be notified and the policy is communicated immediately and consistently. Over time, the employees learn the policy and ultimately change their behavior.

Using expense management automation, the average company can reduce processing time and costs by 40 to 60%, with the investment paying for itself in six to 12 months. In a typical company, the platform can:

Reduce expense report competition time from 35 to 18 minutes.
Reduce accounts payable processing time from 22 to five minutes.
Reduce processing costs from $58 to $18 per transaction.
Reduce expense submissions turnaround time from 14 days to three days.
Reduce the time it takes to generate an expense report by 75%.

With software as a service (SaaS) management tool, everything is accessible from an internet connection and remains up-to-date in real-time.

While the obvious benefit is the resource savings in the expense processing tasks, there’s also the benefit of cost savings within the audit and analysis process.

With a clearer vision into what your employees and spending and where, you’ll be better equipped to analyze and manage the spend, finding cost savings where you may have otherwise left money on the table.

Expense management automation is a strategic solution that gives your company a competitive edge compared to companies that don’t use it.

You’ll control overall spending, ensure policy compliance, reduce processing costs, and increase employee productivity.

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Expense Reporting Archives : Planergy Software

Corporate Travel Program: How To Create a Program for Employer and Employee Needs

What's Planergy?

Cristian Maradiaga

King Ocean

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Corporate Travel Program: How To Create a Program for Employer and Employee Needs

KEY TAKEAWAYS

What Is a Corporate Travel Program?

Why Is a Corporate Travel Program Important?

Cost Management

Employee Safety and Security

Compliance and Accountability

Efficiency

How to Implement a Successful Corporate Travel Program

Assess your Company’s Business Travel Needs

Develop a Travel Policy

Include Duty of Care in Your Corporate Travel Policy

Why is Duty of Care Important in a Corporate Travel Policy?

Legal Responsibility

Employee Safety and Security

Employee Satisfaction and Retention

Risk Management

Choose a Travel Management Company

Communicate the Policy

Monitor and Review

Leisure vs. Corporate Travel

Benefits of Corporate Travel

Networking Opportunities

Cost Savings and Productivity Gains

Professional Development

Improved Collaboration

Increased Sales

Roles and Responsibilities of a Corporate Travel Consultant

Negotiating Rates and Contracts with Travel Suppliers

Assisting Employees with Travel Bookings and Arrangements

Providing Support Services for Travelers, such as Itinerary Changes and Emergency Assistance

Analyzing Travel Data to Identify Cost-Saving Opportunities and Policy Improvements

Tips to Create an Effective Managed Travel Program

Involve Key Stakeholders

Set Clear and Realistic Expectations

Regularly Review and Update your Travel Policy

Encourage Employees to Provide Feedback

Final Thoughts

What’s your goal today?

1. Use Planergy to manage purchasing and accounts payable

2. Download our “Indirect Spend Guide”

3. Learn best practices for purchasing, finance, and more

Related Posts

The Top 8 Business Travel Management Tools

What's Planergy?

Cristian Maradiaga

King Ocean

Download a free copy of "Indirect Spend Guide", to learn:

The Top 8 Business Travel Management Tools

KEY TAKEAWAYS

What Is Business Travel Management?

How Do You Manage a Company’s Travel?

Flexibility and Autonomy

Time and Cost Efficiency

Cost Control

Empowerment and Trust

Personalized Preferences

Travel Policy

Approval Process