How to take control of business travel expenses

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. Assume you don't have the perfect expense management x business travel setup in place.

Max drove from New York to Boston 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 following the rules and collecting his receipts. He even fell out of policy once or twice. On top of that, none of his spend was visible until the end of the month, which means his company's finance team was entirely in the dark about total spend for the Boston event.

For FP&A teams, this lack of visibility makes it nearly impossible to measure event ROI, compare travel budgets across teams, or adjust forecasts.

Due to the lack of a unified process, the business travel manager lost out on cost-saving opportunities. They couldn't see that many of their team members were staying in Boston and missed the chance to negotiate some better rates with a partner hotel chain.

Without business travel tools or expense management software, the company had no visibility into employee whereabouts, limiting its ability to support employees during events like pandemics, weather-related disruptions, or political unrest.

Taking control of business travel expenses

Here are the top six key reasons why your business needs an efficient travel expense management system in place:

1. Cost Reduction: You can minimize costs by managing travel expenses accurately
2. Enhanced policy compliance: Implementing a user-friendly expense management solution improves business travel policy compliance with company policies and benefits both the business travelers and the company
3. Convenient expense tracking: Travellers can easily manage their expenses, track spending, and get reimbursed in seconds
4. Real-time visibility: Finance teams and business travel managers can get real-time reports and alerts, allowing them to monitor travel spending at any given moment
5. Innovative technology: By leveraging advanced technology, companies can use corporate cards, card controls, and connected expense management software to cover all travel expenses. They can even leverage tech like OCR to capture all receipt and invoice data (meaning no data entry or receipt hoarding)
6. Streamlined exporting and integrations: Businesses can easily export expenses to other systems, such as accounting software, for efficient financial management. Modern finance teams rely on expense management solutions with direct integrations to the most popular ERPs (like NetSuite) and accounting software options (like Xero and QuickBooks).

Strong travel expense management also helps your Treasury team forecast cash outflows more accurately. When bookings, approvals, and expenses follow consistent rules, it’s much easier to anticipate travel spend and avoid end-of-month surprises.

Simplifying business travel expenses with per diems

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. Relying on manual receipt submission for reimbursement (think paper receipts, scans, 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. And when documentation is scattered, audits become significantly harder. A centralized system with clear approval paths, automated receipt capture, and consistent categorization gives Controllers the audit-ready evidence they need without manual chasing.

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.

Putting your employee in the driving seat with mileage expense management

Traditional methods of managing travel expenses have tricky limitations that can make management a pain. Challenges include:

• Manual calculations and errors: Manually calculating mileage expenses is time-consuming and prone to mistakes. Adopting technology that automates this process saves time and reduces errors
• Lost receipts: Lost receipts make it difficult to claim deductions or seek accurate reimbursements
• Lack of visibility: Conventional methods often lack real-time visibility, making it hard to track expenses promptly and make informed decisions
• Limited control: Traditional expense management provides little control, making it challenging to enforce policies and prevent fraud or misuse of funds

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.

Smarter travel control with Payhawk AI Travel Agent

Payhawk AI Travel Agent can further streamline your travel program by guiding employees to book within policy, suggesting cost-efficient options, and automatically pulling travel details into your expense system. This not only reduces manual admin but also ensures every booking follows your company rules, improving compliance and giving finance teams more accurate data to analyse.

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.