Don't underestimate the importance of managing travel expenses in business. Without an effective system in place, your company could end up wasting both time and money. Business travel costs can be unpredictable, and policy compliance can get completely written off, meaning no control over spending and multiple missed savings opportunities.
It's crucial to have a proper process (and supporting tools) to manage travel efficiently, keep an eye on business travel spend, pinpoint savings opportunities, and simplify each step for everyone involved.
Let's take your star salesperson Max for example, and assume you don't yet have the perfect expense management x business travel setup in place.
Max drove from London to Edinburgh for a quarterly event. When booking his hotel, he had to dig into the company's digital handbook to check what he could spend on accommodation. He had to do the same for his meals and even to figure out his mileage.
Max was losing valuable time with all this searching and gave up sticking to the rules and collecting his receipts, and even fell out of policy once or twice. On top of that, none of his spend was visible until the end of the month, meaning his company's finance team was entirely in the dark about total spend for the Edinburgh event, behind on working out the ROI, and super late on transferring the data over to the accounting software to support reconciliation.
Even worse, the business travel manager lost out on cost-saving opportunities. They couldn't see that many of their team members were staying in Edinburgh and missed the chance to negotiate some good rates with a partner hotel chain. Not only that but without easily traceable expenses
Finally, without business travel tools or expense management software, the company was in the dark about their employee's whereabouts, meaning they would be unable to support them in the event of any issues (pandemics, weather-related problems, political unrest, etc.)
Here are the top six key reasons why your business needs an efficient travel expense management system in place:
Conventional business travel management can create big challenges. Traditional expense policies are inflexible, outdated, and rarely integrated with the most essential tools.
Unfortunately, many companies still require business travelers to manually input information into separate systems before booking flights, hotels, and other expenses. This process is time-consuming and prone to human error. Also, relying on manual receipt submission for reimbursement (think paper receipts, scans, and emails, etc.) can often lead to payment delays.
Finance teams also face difficulties reviewing expense requests and sending them back to employees for corrections or missing information. The scattered nature of these requests across multiple systems, like email inboxes, spreadsheets, and calendars, makes tracking and managing them impossible.
At Payhawk, we introduced the per diems feature to help address the issues outlined above. Per diems are relatively simple, and they involve establishing a standard daily rate for reimbursement, eliminating the need to track individual trip spend.
Per diems can cover all reasonable costs related to a business trip, including meals and incidental expenses like laundry or dry cleaning. And the amount employees receive as a per diem depends on their location and travel duration. The per diem allowance also varies among companies and countries. For example, in Germany, per diem allowances are calculated according to the provisions outlined in the German Income Tax Act.
Using per diems offers several benefits, including improved compliance and reduced administrative burden associated with company travel expense policies. Using per diems also lets your companies track tax-deductible expenses efficiently, making it easier for companies to reclaim VAT.
Implementing a per diem policy is often an excellent alternative to reimbursing employees for individual expenses incurred during business trips. Instead of claiming reimbursement for each meal, employees receive a per diem that covers their dining expenses, simplifying the process considerably.
Traditional methods of managing travel expenses have tricky limitations that can make management a pain. Challenges include:
These limitations can lead to inefficiencies, increased costs, and compliance issues. By adopting modern spend management software to track and process mileage expenses, businesses can overcome these challenges and streamline their travel expense management.
Here's where we come in. At Payhawk, our mileage feature makes steering expenses in the right direction a breeze.
Employees simply enter their journey details (start location, end location) into the Payhawk app, and we automatically calculate the correct expense amount. The app uses Google Maps to calculate the distance based on the start and end points of the journey. And if the actual distance differs significantly, employees can manually adjust it.
Employees like Max can also add stops for more complex routes. And account administrators in the finance team can configure the mileage rate and set up a workflow aligned with the company's spend policy.
Once everything is verified, team leaders can reimburse with just one click. The benefits? With a mileage tracking and reimbursement feature, employees can skip manual and time-consuming processes like checking the odometer before and after each journey. They don't even have to estimate the distance (which often results in inaccuracies and wasted time).
Finance managers need a reliable way to verify if the trip was for work and check the reported distance. This verification process usually requires significant manual work, takes up time, and is prone to errors.
After approval, finance managers need a simple way to reimburse the funds to employees. Both employees and finance managers want a streamlined solution to manage mileage expenses and other costs, saving time and improving efficiency — and our solution is the easy answer.
At Payhawk, our integration with Travel Perk means every part of an employee’s business trip is taken care of. From the minute they book their hotel to the minute they kick off their shoes when getting back home.
Max can book his accommodation (including flights, trains, and ferries) via TravelPerk and expense it directly via the Payhawk integration. Likewise, he can use the Payhawk app to submit his mileage and per diem expenses and upload any relevant supporting receipts in seconds.
Meanwhile, at Max’s office, his finance team is delighted. They have built the per diems, mileage, and card controls to perfectly reflect the company’s business travel expense policies. Therefore everything Max does is in perfect compliance and easy to track and reconcile.
As a finance manager, accurate and complete expense reporting is crucial. It helps manage costs and ensures compliance with tax regulations, audits, and more. At Payhawk, we let you efficiently track and manage travel and expenses through our innovative platform, saving hours, controlling costs, and getting complete spend visibility (even while your team is on the road).
Need a more efficient approach to managing travel and expenses? Book a demo today to learn more.
Trish Toovey works across the UK and US markets to craft content at Payhawk. Covering anything from ad copy to video scripting, Trish leans on a super varied background in copy and content creation for the finance, fashion, and travel industries.