6 Travel Expense Management Challenges and Solutions

If business travel is integral to your company’s operations, you know the importance of effective travel expense management. Without the right tools and strategies, managing travel expenses may present challenges for finance teams, travel managers, and employees. And, of course, ineffective management can have a negative effect on the company’s financial stability. 

Understanding the Importance of Effective Travel Expense Management

Proper management of business travel expenses is essential because, for many companies, the volume is high. According to a GBTA (Global Business Travel Industry) report, travel spending in 2024 will reach 1.48 trillion USD, an increase of 50 billion USD compared to 2019. 

That level of spending inevitably comes with obstacles. Here are six of the most common travel expense management challenges — and how to conquer them.

1. Poor Visibility of Travel Expenses

One of the primary challenges companies face in travel expense management is the lack of visibility into spending. Without clear insight into what employees are spending on travel, companies struggle to track, manage, and analyze expenses. That can lead to financial discrepancies and hinder the ability of managers to make well-informed decisions.

How to Overcome it: Leverage Technology for Real-Time Tracking

Expense management software that provides real-time visibility into employee spending can help. Expense management tools like Navan Expense enable businesses to track expenses as they happen, so finance and accounting teams have immediate insight into where the money is going. 

This feature can also help prevent unauthorized spending, as it allows companies to flag non-compliant transactions before they happen.

2. Non-Compliance with Travel Policies

Even with well-defined travel policies in place, many businesses find them difficult to enforce. Additionally, changes to company policies are sometimes not communicated promptly, leading to gaps in compliance. This lack of adherence can increase costs since, without clear guidance, employees may overspend.

How to Overcome it: Use a Travel Expense Management Tool

Complex policies tend to confuse employees and lead to mistakes, so keep your travel policies simple and easy to follow. A travel expense management solution can streamline this process by easily enabling companies to adjust and set clear policy guidelines from within the travel and expense solution.

 3. Time-Consuming Manual Expense Reporting

Let’s face it — filling out expense reports can seem like a never-ending task. Doing it manually also makes it prone to human error. Additionally, this can slow down reimbursement processes, create friction with employees, and add unnecessary work for finance and accounting teams.

How to Overcome it: Automate Expense Reporting

Switching to an automated expense management system is a smart way to save time and reduce errors. Modern platforms are equipped with Optical Character Recognition (OCR), which lets employees scan receipts, which are automatically uploaded into the system. 

This practice is not only convenient — it also streamlines the approval and reimbursement processes, creating a more positive experience for employees across the company while helping to prevent human errors. Automated systems also flag any expenses that don’t comply with company policies, promoting tighter control on spend.

4. Changes to Travel Plans

Business travelers are no strangers to the frustration of last-minute travel changes — whether it’s a delayed flight, a canceled meeting, or an unexpected reroute. These disruptions create headaches for employees and can lead to additional, unplanned costs for businesses due to extra fees and penalties.

How to Overcome it: Choose the Right Travel Management Solution

The right travel management solution provides pricing transparency for last-minute changes and cancellations. The ideal management company can also offer reduced penalty rates to minimize costs for your business.

With Navan, your employees can manage last-minute booking changes independently without relying on travel managers or a travel management company, saving them time and stress.

5. Limited Travel Inventory

When relying on a travel management company (TMC) for business travel bookings, inventory availability can make a huge difference in costs. Limited offers may force employees to choose more expensive flights, hotels, and car rentals.

How to Overcome it: Choose a TMC with an Extensive Travel Inventory 

Opting for a travel management solution like Navan gives companies access to a wide selection of vendors through well-established partnerships. 

Navan sources inventory from multiple Global Distribution Systems (GDSs), direct connections, and consumer sites, so travelers have more flexibility to select options that fall within budget.

6. Balancing Employee Satisfaction and Spend Control

Restrictive travel policies may lead to disgruntled employees, but travel expense policies must fit the company’s financial objectives. Striking the right balance is undoubtedly challenging: If the balance tips too far, employees may become disengaged or fail to comply with policies; however, of course, a policy that doesn’t align with a company’s budget plan can negatively affect financial stability. 

How to Overcome it: Prioritize Comfort without Sacrificing Control

Employee satisfaction doesn’t have to come at the expense of spend control. Offering employees some flexibility in choosing their travel options — such as letting them pick their hotel within a certain price range — can improve satisfaction while still keeping costs in check.

Employees who book business travel with Navan can earn rewards and accumulate points with their preferred airlines and hotels. The Navan solution also offers employees the option to book personal trips, which allows them to take advantage of exclusive discounts for their own vacations.

The Power of Smart Travel Expense Management Solutions

Managing travel expenses can be challenging, but the right strategies and tools make it much easier. Whether enhancing visibility with real-time tracking, promoting compliance through user-friendly platforms, or selecting the right travel management partner, businesses can effortlessly tackle the most common hurdles.

By adopting modern technology, automating processes, and prioritizing spend control and employee satisfaction, companies can streamline their travel operations and help ensure that every cent is well spent. 

Ultimately, smart travel expense management is about making choices, helping to drive efficiency, reduce costs, and keep everyone happy on the road.

Ready to drive your travel expense management to a new level? Schedule a demo now to get to know Navan’s smart solution.