Suppose the share of business travel expenses in a company is significant. In that case, optimizing this cost item and finding a way to reduce the human resources required to complete all the paperwork is important. A expense tracking system like Billdu can help you do this. This piece explores best practices in travel expense management and invoicing.
What is a travel expense management system?
Travel expense management system is a convenient software with clear functionality. All initial data on business travelers and expenses are entered in a few minutes, the volume of manual operations is significantly reduced, and the number of errors is reduced to zero.
Travel expense management system instantly collects and analyzes all information and offers the most profitable options for booking and accommodation. This tool interacts with the company’s personnel and accounting records so all financial and tax documents stay in order.
The Global Travel and Expense Management Software Market will grow globally at a rate of 6.8% from 2022 to 2029. Most travel expense management systems have a wide and flexible functionality that can adjust to the needs of any company. It helps:
- Find and buy tickets on websites like Bookatrekking.com at the most favorable fare
- Book a hotel room while choosing from hundreds of thousands of options
- Coordinate the trip with all decision-makers
- Coordinate the budget for the trip with the financial service
- Arrange insurance and visa
- Order service in VIP lounges at the place of stay
- Generate an advance report
- Upload original reporting documents, invoices, and certificates
- Store the history of business trips to track and optimize costs
With a travel expense management system, coordination of business trips will become more convenient, planning of business travel expenses will become more transparent, and receipt and storage of reporting documents will become safer. The travel management system successfully works for business development, eliminating unjustified financial losses and optimizing company resources.
Why travel expense tracking is important?
Several departments of the company are involved in preparing a business trip. The scheme by which an employee is sent on a business trip looks like this:
- Processing of the request
- Preliminary approval
- Issuance of a business trip order
- Booking tickets and accommodation
- Issuance of advance payment and travel allowance
- Preparation of the expense report
- Approval of the report
- Reimbursement of expenses
If business travel is part of the company’s workflow, it is important to master and implement modern technologies that will help simplify processing all documents and reports. A travel expense tracking system is an effective tool for optimizing business processes. It can be easily integrated into any enterprise accounting system.
Pros of travel expense management system
Travel expense management system solves 3 essential business tasks at the same time:
- Planning. The travel expense management system allows you to comply with the company’s internal policy and current legislation, analyzes all possible options for organizing a trip, and selects the most favorable conditions. It is easy to calculate and plan all upcoming expenses.
- Resource optimization. Solving all organizational issues automatically frees employees from routine operations. In addition, the travel expense management system allows you to track all costs online and take steps to optimize them.
- Analytics. The database on business trips in the company is always available for analysis. The travel expense management system can generate any report for both accounting and management. Expenditure charts will help to determine the company’s future policy, find opportunities to save resources, and plan the budget for employee travel based on actual data without errors.
Billdu can help you organize expenses effortlessly by providing payment reminders, read & open notifications, and customizable invoice templates.
4 reasons to implement a travel expense management system
Many internal processes in the company are simplified thanks to the automation of business trips, the speed of decision-making increases, and time costs are reduced to a minimum. All this allows you to focus on more important production issues and increase the efficiency of your employees.
While it may seem obvious, a travel expense management system reduces paper usage and serves as an excellent starting point when optimizing your invoicing processes. Achieving a completely paperless state might not always be attainable, but making strides in that direction can yield substantial benefits.
Compliance with internal regulations and legislation
All internal regulations of the company are automatically put into the system. Responsible persons easily and quickly approve incoming travel requests without distracting from their main duties.
Clear functionality and easy management
All system functions can be accessed in seconds. There is no need to employ a separate specialist to maintain the program. Most travel expense management systems have interfaces that are intuitive and easy to use.
Saving on tickets and hotel reservations
You can order tickets and book accommodation for business travelers or entrust this task to a travel manager. In any situation, a travel expense management system will select the most favorable option out of hundreds of options. This guarantees savings of up to 20% for the company. And the bonuses accumulated during booking will make the business trip policy even more favorable.
Elimination of possible errors in reports
The travel expense management system is integrated with other company services, so you won’t have to separately generate and archive reporting documents, including those for the tax authorities. The travel expense management system does not allow you to overlook any detail, and the possibility of errors in financial documents is completely eliminated.
Invoicing best practices for frequent travelers
By adhering to these detailed invoicing best practices, frequent travelers can effectively manage their finances while on the go, maintain professionalism, and ensure prompt payment for their services or reimbursable expenses.
Strategize ahead and craft a well-defined travel policy
Planning proactively and establishing a comprehensive travel policy for your organization is paramount to effectively managing your travel expenses. A robust travel policy should delineate the guidelines for booking, payment procedures, and reimbursement protocols while defining both travelers’ and approvers’ roles and responsibilities.
Such a policy is instrumental in cost control, mitigating confusion and disputes, and ensuring compliance with tax and legal requirements. Regular updates to this policy are essential to accommodate shifting travel conditions and evolving needs. Clear communication of the policy to all staff members is equally crucial.
Standardize your invoice template
Creating a standardized invoice template is crucial for consistency and professionalism. Here’s what to include:
- Your details. Your name or business name, address, phone number, and email address.
- Client’s details. Your client’s name or business name, address, and contact information.
- Invoice number. A unique identifier for each invoice, typically in sequential order.
- Date. The date the invoice is issued.
- Payment Terms. Clearly specify when payment is due, such as “Net 30” for payment due within 30 days of the invoice date.
- Services or expenses. A detailed breakdown of services rendered or expenses incurred, including item descriptions, quantities, rates, and totals.
- Payment instructions. Information on accepted payment methods, such as bank transfer details or payment links for online payment processors like PayPal.
Consider multiple currencies, exchange rates, and fees when dealing with international clients or expenses.
If you want to know what a professional-looking invoice looks like, refer to the following article.
Leverage online tools and apps for streamlined travel management
Another highly effective strategy for managing travel expenses is to harness the power of online tools and applications, making booking and tracking travel smoother and more efficient. These digital resources enable you to compare prices, unearth enticing deals, and access discounts across various travel providers—be it airlines, hotels, or car rentals.
Furthermore, they simplify travel itinerary management, streamline check-in processes, and grant easy access to boarding passes and tickets. Some tools and apps can even sync seamlessly with your accounting software or expense management systems, simplifying the recording and reporting of travel expenditures.
Use mobile invoicing apps
Mobile invoicing apps like Billdu are invaluable for frequent travelers. These apps typically offer the following benefits:
- Mobility. You can send and create invoices from your smartphone or tablet. It allows you to invoice clients immediately after completing a job or incurring expenses, no matter where you are.
- Real-time updates. You can access your invoicing data in real-time, ensuring you have the latest information.
- Organization. These apps often provide features like expense tracking, receipt scanning, and the ability to categorize expenses, helping you stay organized while moving.
Tracking expenses in real-time is essential for accurate invoicing and expense reimbursement.
Master the art of organizing and accessing receipts and invoices
Meticulous organization and accessibility of receipts and invoices are important. These documents are your golden tickets to documenting and verifying your travel expenses, as well as to claim tax deductions and seek reimbursements. To safeguard these critical papers, maintain a secure repository, such as a dedicated folder, envelope, or wallet.
Additionally, digitizing your receipts and invoices is wise. You can do this by scanning or photographing them and securely storing them in digital formats, whether on your computer, in the cloud, or within your email. This way, you can retrieve them anytime and from anywhere, eliminating the risks of loss or damage.
Set clear payment terms
Clear payment terms on your invoices help manage expectations and prevent payment delays. Specify:
- Due date. The exact date by which payment should be received.
- Payment methods. List the methods of payment you accept, such as bank transfers, credit cards, or digital wallets.
- Late payment penalties. If applicable, outline any penalties or interest that will be charged for late payments.
Digital copies of invoices and receipts are essential for record-keeping and security. Understanding invoice payment terms is crucial for ensuring timely payments and maintaining healthy cash flow in your business.
Expedite expense report submissions and approvals
The prompt and accurate submission and approval of expense reports are also important. These reports are comprehensive records detailing your travel expenses, including amounts and reasons for reimbursement. Speed is of the essence here. Aim to submit your expense reports promptly, preferably within a week or a month of your trip’s conclusion.
Moreover, meticulousness is key. Ensure your reports are precise, complete, and compliant with your established travel policy and tax regulations. Include all essential information such as dates, locations, purposes, and amounts, and attach receipts and invoices. Review your reports for errors, duplicates, or discrepancies before submitting them for approval.
Sending invoices promptly has several advantages:
- Cash flow. It helps maintain a steady cash flow by reducing the time between completing work and receiving payment.
- Professionalis. Timely invoicing demonstrates professionalism and reliability to your clients.
- Organization. Prompt invoicing ensures you don’t forget to bill for completed work or reimbursable expenses.
Maintaining a clear separation between business and personal expenses is crucial:
- Deductions. Proper separation ensures you only deduct legitimate business expenses on your taxes.
- Transparency. It makes your financial records transparent and audit-ready.
Automating payment reminders saves you time and ensures consistent follow-up.
Review and analyze travel spending and trends
Prudent travel expense management involves regularly reviewing and analyzing your travel spending and trends. Delving into this data allows you to monitor and assess your travel performance, pinpoint areas for enhancement, and optimize your travel budget.
Commit to periodically reviewing and analyzing your travel spending and trends, whether quarterly or annually. Employ visual aids like reports, charts, and graphs to visualize and compare various aspects of your travel data, such as the number of trips, average trip costs, frequently visited destinations, common expenses, and more. Additionally, embrace benchmarks, set goals, and actively seek feedback to gauge and enhance your travel efficiency and effectiveness.
Effective travel expense management is crucial to maintaining financial control and efficiency for frequent travelers. By implementing best practices in invoicing, individuals can streamline their financial processes, reduce the risk of errors, and ultimately save time and money. From keeping detailed records and utilizing digital tools to staying organized and communicating effectively with employers and clients, these practices can significantly improve the travel expense management experience.