Whether you are writing your organization’s first travel and expense policy, or you are a corporate travel veteran who has had one in place for many years, it's always good to look outside your own immediate network and see what other world-class organizations are doing to effectively manage their employees’ spend. This enables you to refine and enhance your own expense management program and incorporate these best practices.
Industry best practices need to be tailored specifically to each organization, and then implemented and enforced to be successful. In particular, manual processes need to be automated in order to reduce costs, improve accuracy, enhance consistency and increase operational efficiency.
Even though no two companies have the same policies, there are certain features that best-in-class policies often share. Here are six common elements implemented by leading organizations around the world:
1. Require pre-approvals
Incorporate pre-approvals before the expenses are incurred. “Cost avoidance savings” means finding ways to avoid costs before they are incurred. And employees are more likely to be careful with their spend, knowing that it is being reviewed. An expense solution can be configured to mandate pre-approvals before major purchases are made, and corporate cards can have spend parameters automatically configured into them, with spend restricted by merchant category as well as amount and date.
2. Initiate a corporate card program
Corporate card programs can deliver huge benefits for organizations. Cash rebates on spend can add up to significant savings, but the real benefits are often operational. Fraud is dramatically reduced, as merchant card data is automatically matched with expense line items. Reconciliation is a breeze. Some solutions even enable virtual card numbers to be created on-demand by leaders, making online purchasing an easy, risk-free process.
Related: 5 Benefits of Corporate Card Programs
3. Automate policy enforcement
Be preventative instead of combative. Compliance rules can be built into expense management tools and are validated in real time while a user enters new expenses. Whether it’s the cost of a meal, an attempted duplicate submission, or an expense without a receipt, an automated solution will flag these, and either prevent an out-of-policy expense from being submitted or will require the employee to specify the reason. This saves time and also reduces friction between expense submitters and approvers.
4. Clearly document the approval process
In addition to a clearly defined travel and expense policy, make the process well defined for the expense owner and the approver for limits, allocations, approval delegation, and other process standards. This way your employees can rest assured that their expenses aren’t sitting in their manager’s inbox while interest accrues on a personal charge card.
5. Empower employees to do expenses on the road
Receipts get lost. Dinner attendees’ names get forgotten. Booking emails get lost in inboxes. A sophisticated expense solution will enable your team to easily capture and submit receipts as the transaction is made. Sophisticated data extraction and easy-to-use mobile solutions make expense item creation easy while your team members are away. They can submit expenses at any time, avoiding the need to spend family time plowing through a wallet full of receipts and cumbersome unintuitive solutions.
Related: How could your organization be exposed to expense fraud?
6. Centralize the travel expense process
By implementing an automated expense management platform, a consistent, programmatic approach replaces a substantial amount of human intervention – reducing costs and increasing operational efficiency. Implementing powerful business rules makes it easier to capture unique approval situations and leverage unique industry partnerships.
Leveraging technology can streamline the expense process significantly, so Uber, Lyft, and hotel folio charges are automatically converted to expense line items. Likewise, enabling trip itineraries and expenses from travel agencies and booking tools to be imported into an expense report on any device can also speed up the process.
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Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.