In today’s corporate landscape, managing expenses for a travel group demands a systematic approach to ensure transparency, accuracy, and efficiency. Establishing a robust expense approval workflow is pivotal to streamlining the process. An effective system controls costs and ensures compliance with company policies. In this blog post, we will explore six tried-and-tested methods to optimize the expense approval for a corporate travel group.
Understanding the Expense Approval Workflow
An expense approval workflow refers to the sequence of steps and protocols that regulate the submission, review, and authorization of travel-related expenses within an organization. It involves multiple stakeholders and integrates various tools and technologies to streamline the process. To enhance this workflow, companies often implement an expense approval system—a digital platform designed to automate and facilitate expense management tasks.
1. Implementing an Automated Expense Approval System
Implementing an automated Expense Approval System is a transformative solution streamlining a corporate travel group’s expense approval. This system leverages technology to simplify and automate the process, enhancing efficiency, accuracy, and transparency.
Imagine a system where employees can easily submit their travel expenses for approval without hassle. This system keeps track of everything needed, like how much was spent, when, what it was for, and even the receipts. It saves employees from the tedious task of filling out expense reports by hand or dealing with paper documents.
Once the expense reports are submitted, the system automatically routes them to the appropriate approvers based on predefined rules and approval hierarchies. Approvers receive notifications and can access the expense reports directly through the system. This eliminates the need for paper-based approval processes or relying on email chains, which can be cumbersome and prone to delays or errors.
The automated system enhances the review and approval process by providing all the necessary information to the approvers in a centralized platform. Approvers can easily access and evaluate the expense reports, review the supporting documentation, and compare the expenses against predefined policies and spending limits. This ensures consistency in the evaluation process and reduces the chances of errors or discrepancies.
2. Define clear Expense Approval Policies
Clear Expense Approval Policies are essential to successful corporate travel expense management. They define, in a transparent and accessible way, the guidelines and parameters that govern the reimbursement of travel-related expenses. These policies provide the framework for managing corporate expenses and are essential for controlling costs and maintaining financial accountability.
To define clear expense approval policies, organizations should consider several elements:
Expense Categories
Firstly, organizations should group expenses into relevant categories such as transportation, accommodation, meals, entertainment, communication, etc. Doing so helps employees to understand which expenses are eligible for reimbursement. It enables the company to control the costs of specific categories of expenses, for example, by limiting meal expenses to a certain amount per day.
Approval Authority Levels
Organizations also need to define precise approval authority levels, typically based on the level of expense. These levels identify the individuals responsible for approving expenses, depending on the payment amount. For example, expenses that cost less than $500 might be approved at the department level, while larger expenses may require approval at the executive level.
Spending Limits
Setting spending limits helps ensure that employees stay within the company’s budget. These limits typically specify how much can be spent per day or item, helping to prevent excessive spending. These limits need to be reasonable, considering factors like the cost of living, transportation expenses, and other relevant factors. Regular reviews are necessary to ensure that the limits remain appropriate and should be adjusted based on changes in economic circumstances or the organization’s objectives.
Reimbursement Procedures and Timelines
Expense approval policies should specify the reimbursement procedures and timelines. This should include the expected turnaround times for the approval process, how expenses are paid, and the expectations for keeping receipts and submitting fees. For example, the employee might be required to submit the expense report within a specific time frame, and the reimbursement process might occur weekly or monthly.
Tax Implications and Other Requirements
Organizations should also define the tax implications and other requirements related to travel expenses. For example, some expenses might need to comply with local tax laws, or the organization may require proof of attendance at a specific conference or event.
3. Streamline the Submission Process
Streamlining the submission process involves providing employees with user-friendly tools and applications to capture and submit expenses. Mobile apps and online platforms allow travelers to easily take photos of their receipts, categorize expenses, and submit them electronically. This eliminates the need for paper receipts, reduces the chances of lost or missing documentation, and accelerates the submission process. Organizations can ensure timely and accurate expense reporting by simplifying the submission process.
4. Assign Approvers with Clearly Defined Roles
Assigning clear roles to approvers is crucial for accountability and efficiency in the expense approval process. Clearly define the hierarchy and duties for approving expenses, including roles for managers, finance teams, or travel administrators. This clarity streamlines the workflow by minimizing unnecessary escalations or delays. It also ensures that expenses are reviewed by individuals with the expertise to verify costs against company policies and budgets.
5. Set Real-Time Expense Policy Violation Alerts
An effective expense approval system should have real-time expense policy violation alerts. These alerts automatically flag any expense that violates the company’s policies or exceeds specified spending limits. For example, if an employee submits an expense claim for a luxury hotel that exceeds the company’s allowed rate, the system will generate an alert. These alerts notify the traveler and the approver about policy violations, allowing for prompt resolution. Organizations can enforce compliance with expense policies by addressing policy violations in real time and preventing unnecessary expenses or reimbursement disputes.
6. Conduct Regular Audits and Reviews
Regular audits and reviews of approved expenses are essential to maintain accuracy and integrity in the expense approval process. Audits help identify any discrepancies, errors, or fraudulent activities that may have occurred. By periodically reviewing approved expenses, organizations can ensure that expense policies are followed and spot any areas of improvement or potential policy updates. Audits also support cultivating a culture of compliance and responsible expense management within the organization, promoting transparency and financial accountability.
Employ the Best Expense Approval Workflow System
By implementing these detailed strategies, organizations can streamline the expense approval workflow, enhance accuracy, and ensure compliance with expense policies. An automated expense approval system, clear policy guidelines, simplified submission processes, and clearly defined approver roles contribute to a more efficient and transparent workflow. Real-time violation alerts and regular audits ensure expenses align with policies, budgets, and organizational objectives.
The new-age travel and expense management software like itilite supports approval workflow customization. Also, they maintain an audit trail of every approval along with comments. These features make it easier for managers to define the approval matrix and set expense pre-approval limits.Â
To try out the advanced features of itilite, get the free demo now.
