A Modern Approach to Managing Travel Expenses

Managing business travel expenses is one of the most complex and time-consuming tasks for finance and accounting teams. Manually submitting, approving, and reconciling travel expenses is time-consuming and involves many stakeholders. This static, fragmented, and outdated approach to expense management costs businesses time and money and gives them limited control over spend.

The primary shortcomings of the reporting process for travel expenses arise from the possibility of human error, insufficient automation and oversight, employee dissatisfaction, and overlooked chances for data-driven decision-making.

In a survey by Navan in March 2024 with 216 finance professionals, 47% of respondents said that their expense management today is fully manual. In addition, the majority of respondents said it takes 1–4 weeks for manual transactions to be fully approved in their ERP, from swipe to reconciliation. 

There has to be a better way.

Modern Best Practices for Managing Travel Expenses 

Efficiently managing travel expenses is a key step for any business aiming to control costs and maintain employee satisfaction. Implementing modern strategies can transform a chaotic process into a streamlined system that benefits everyone involved. It can also save your company significant time and money. 

Here are some best practices and tools for effective travel expense management.

1. Establish Clear Expense Policies

Setting clear guidelines on reimbursable travel expenses is fundamental. Travel policies should be easily accessible and include categories like lodging, meals, transportation, and incidental expenses.

Pro Tip: Regularly review and update your travel expense policies to help ensure they remain relevant and aligned with current business needs and industry standards.

2. Use Digital Expense Tracking Tools

By automating receipt scanning and reporting, digital tools can reduce the likelihood of errors and fraud. These tools offer real-time insights into spending, which helps with budget management and forecasting.

Pro Tip: Choose digital expense tracking tools that integrate seamlessly with your existing accounting software for a smoother, more efficient workflow.

3. Incentivize Cost-Conscious Behavior

Foster a culture of fiscal responsibility among employees. Encourage them to choose cost-effective options for flights, hotels, car rentals, and meals. Recognizing and rewarding cost-saving behaviors can motivate employees to be more mindful of expenses.

Pro Tip: Implement a rewards program for employees who consistently stay under budget.

4. Leverage the Power of Real-Time Data

Use real-time data to gain insights into your travel expenses. Access to current data helps finance teams make informed decisions, improve budgeting accuracy, and quickly identify and address any anomalies in spending.

Pro Tip: Implement dashboards that provide real-time visibility into all travel expenses.

5. Tap Into the Power of Dynamic Pricing

Dynamic pricing tools can also help your business secure the best rates for flights, hotels, and other travel-related expenses. These tools adjust prices based on demand, which helps you get competitive rates and save on travel costs.

Pro Tip: Allowing employees to travel during off-peak times can lead to significant savings. Encourage employees to incorporate leisure time into their business trips — they may find more affordable airfares and accommodations by choosing to arrive early or stay later.

6. Implement a Corporate Travel Booking Tool

A corporate travel booking tool can simplify the booking process and integrate with your expense management system. This tool helps enforce travel policies, provides real-time visibility into travel spend, and accurately captures all travel expenses.

Pro Tip: Adopt an all-in-one travel and expense solution to streamline both booking and expense management processes. The integration enables more accurate tracking of travel expenditures.

Key Features of a Modern Corporate Travel Booking Tool

To optimize travel expense management, consider tools with these features:

• Automated Compliance Enforcement: Tools that enforce compliance streamline the booking and reimbursement processes. Navan’s software, for example, auto-approves in-policy bookings and rejects everything else.
• Real-Time Expense Reporting: Real-time reporting enables finance teams to monitor spending as it happens, aiding in accurate budgeting and financial planning.
• Integrated Corporate Cards: Providing employees with corporate cards linked to an expense management system simplifies the process and reduces out-of-pocket spending. Have a banking relationship you’d like to keep? Navan integrates with existing bank cards for seamless management.
• Mobile Accessibility: Mobile-friendly tools enable employees to manage expenses on the go, enabling more timely reporting and increasing efficiency.

Benefits of Combining Travel and Expense Management

Combining travel and expense management into a single integrated system offers numerous business advantages. This approach streamlines processes, enhances visibility, and improves compliance, ultimately saving time and money. 

Below are some key benefits of integrating travel and expense management.

Faster Insights and Greater Agility

Real-time spend analytics provide the information for more accurate financial planning and forecasting. Connecting travel and expense solutions creates access to this data, which helps improve policy and budget management.

Increased Compliance

Automated spend controls at the point of purchase ensure transactions are within policy and reduces the risk of overspending. These controls also provide clarity on spending limits, which helps increase compliance.

Customizable and Automated Controls

Admins can tailor spend parameters based on roles, expense categories, and business contexts. This prevents fraud, streamlines approval processes, and helps maintain control over expenses.

Streamlined Reimbursements and Reconciliation

Automating the reimbursement process speeds up payments to employees and reduces administrative workload. Clear per diem and trip parameters eliminate confusion over allowable expenses and helps companies reimburse employees faster and more accurately.

Navan Expense: The Answer to Travel and Expense Challenges

Navan Expense addresses the primary challenges of managing travel expenses with a comprehensive solution that automates and streamlines the entire process from expense submission to reconciliation. Here’s how Navan Expense meets these challenges:

Automated Expense Management

Navan Expense eliminates manual expense reports, approvals, and reconciliation. This saves time for employees and finance teams, reduces the risk of human error, and helps ensure that all expenses are recorded accurately.

Proactive Spend Policies

Navan allows businesses to apply customizable spending policies, which helps prevent overspending before it occurs. By setting these policies, companies can maintain control over their budgets and increase compliance with financial guidelines.

According to a March 2024 survey of finance professionals, companies using Navan have seen a 21% reduction in overspending by implementing proactive spending policies.

Real-Time Visibility

With real-time reporting, Navan Expense provides immediate insights into company spend. This visibility helps finance teams make informed decisions, which improves their ability to budget and forecast accurately.

Flexible Payment Options

Navan Expense supports various payment methods, including Visa and Mastercard corporate cards. As a result, companies can maintain their existing card programs while benefiting from automated expense management. In addition, virtual cards — which help enhance control over spending — can be issued for specific purchases.

Fast Reimbursements

Employees can receive reimbursements in more than 25 currencies across 45 countries — a feature that significantly speeds up the process and reduces financial stress for traveling employees.

The Future of Travel and Expense Management

Modernizing travel expense management saves time and money, enhances employee satisfaction, and improves compliance. Implementing best practices and using advanced tools like Navan can transform your travel expense processes into a seamless operation.

Ready to upgrade how your company manages travel expenses? Schedule a demo with Navan today and see how our solutions can benefit your company.