Figuring out what is and what is not considered a travel expense should be easy, right? Unfortunately, that’s not always the case. Try telling this to the employee standing in the airport newsstand debating whether the bag of snacks in their hand is a valid business expense. Or to the employee unsure if Uber, Lyft or a cab is the approved mode of transportation to the hotel. Clarifying any gray travel and expense areas goes a long way towards taking control of your expense management by decreasing errors, saving time and reducing fraud.
Why is ambiguity an issue?
Business travel is stressful enough without any confusion around what is and isn’t considered an approved expense. When the rules are left open for interpretation, this often leads to incompliant expenses, incorrectly filed expense reports and wasted time and effort.
This is even more important now as the proliferation of various travel apps are entering the market. With no rules around which apps are company approved and which aren’t, employees are left to decide. This creates a mash-up of different vendors and ways the finance team has to now keep track of employee expenses, decreasing insight into the overall picture of employee spend.
Above and beyond the time and compliance issues, ambiguity and confusion leads to unhappy employees who have to deal with all the steps of the expense report lifecycle. Filing employees must explain the validity of their expenses. The approving manager and the finance team member doing the audit and review also have to go back and forth with the filing employee to get ambiguous expenses figured out. All this time adds up. At the end of the day, you end up with tired, frustrated employees and delayed reimbursements.
Is it an error…or fraud?
Leaving the door open for interpretation increases opportunities for expense report fraud. Nobody likes to ever think their employees are taking advantage of them, but it does happen. Fortunately, with a clear T&E policy, errors and fraud are easier to spot and cut off at the pass.
Speaking of errors, with everything spelled out, your team will now be able to spot patterns with expenses (or even a certain employee). These patterns open up training opportunities, to help all employees get on the same page when it comes to expenses and employee spend. And if you haven’t already moved to an automated (and mobile) expense management system, now’s your chance. Moving your spend management to an automated process is easier than you think, and will keep you on the path of error reduction and cost savings.
Clarity leads to better communication (and speed)
Money is a personal and sensitive topic, especially if an employee is paying out of pocket up front and will be reimbursed later. Ensuring that all the guidelines are clear and concise, and leave no opening for interpretation, makes all the difference. It also opens the door for better communication amongst your team.
Not to mention, a better understanding of expenses makes creating, reviewing and approving expenses that much faster.
So, this leads to the question of what to do next? Your first T&E action item should be to get a great expense policy into action at your company. Need some help to get started? We’ve got you covered. Use our expense policy builder to build a personalized policy for your business.