The global business travel industry is worth about

$1.28 trillion dollars

, with the US responsible for spending more than one third of that amount. No matter where your business is located, chances are that travel is one of your three largest expenses, with salaries and SaaS also in the lead.All of that spending means that it’s essential to track where that money is being spent, and why. In this guide, we walk you through how to create a business trip expense report, and how to optimize your business travel spending.

Travel and expense reports are physical or digital documents that include all of the relevant details for a travel-related expense, including the amount of the purchase, the date, and expense category. Original receipts are typically also included with T&E reports so that if a tax return is ever audited, the business can provide evidence of reimbursable expenses.

Travel expense reports are important for several key reasons that matter to a company, whether a global corporation or a small business.

In most countries around the world, travel is fully deductible, as long as it has a justifiable business purpose. That purpose can be professional development, recruiting, sales, procurement, on-site customer support, and more. But in order to deduct your expenses legally with the IRS or other government entity, you need proof in the form of a receipt or invoice.

Reporting is not just for the tax entity of the governments whose countries you operate in. Understanding travel costs is important for your business as well. For example, with real-time insights into travel spend, you can make in-the-moment decisions to stick to your budget. And with monthly and quarterly reports, you can identify projects or teams that are overspending.

Unfortunately, travel reimbursement is subject to employee fraud. With the right procedures in place (including the requirement to attach receipts), you can reduce your company’s risk of fraud.

Even when employees follow the guidelines set out in your

travel expense policy

without fault, the average expense report takes

20 minutes to complete

and $58 to process. When expense reports need to be corrected, this takes an additional 18 minutes and $52 to process. And that’s just for one expense report.Let’s put that into context. If you’re processing an average of 20 travel expense reports per month, it will cost you $13,920 if they are all completed correctly. However, if they need to be revised, you’re looking at an extra $12,480, bringing your annual total to $26,400 spent only on travel expense reporting processes.And the bigger your business, the more travel expense reports there’ll be to contend with. That’s why automated travel expense reporting is the only cost-effective option for modern companies who are serious about protecting their bottom line.As well as saving you money, adopting automated travel expense reporting has many other business benefits.

Manual travel expense reporting produces a huge amount of paperwork, including receipts, spreadsheets, and printouts. Not only do your employees have to save every receipt they receive (and maintain their readability!), your finance team has to go through them one by one to make sure they meet your travel policy rules.A manual process leaves room for errors and mistakes, which lengthens the process and drives up associated costs. Restaurants and retailers are also increasingly offering digital receipts, which can cause issues if you’re still relying on paper-based processes.Automated travel expense reports eliminate the need for mountains of paperwork. Employees can scan and capture receipts and other documents with their mobile devices and upload them instantly to your automated system. From there, your finance teams can easily see and manage them digitally.

Automated travel expense systems reduce the chances of making entry errors and omissions that can often make a dent in your bottom line. In fact, these systems can automatically flag duplicate entries and expenses that fall outside of your travel expense policy. They also capture and track all communication regarding the expense report -- no more searching through emails!Plus, when the expense reporting process is simplified, you’ll likely see an increase in travel policy compliance rates.

Paper-based travel expense processes don’t provide you with any useful insights on your business travel program. Not only can you not see a real-time analysis of cash flow, you also can’t quickly access information on:With automated travel expense systems, you can view all this information and more, helping you to identify where cost savings could be made, opportunities for negotiating better deals with partners, and many other cost optimization possibilities.

In 2021 and beyond, a travel and expense report is no longer a physical form. Expense reporting should be digital, and integrated with your business travel software.Here’s how to streamline your T&E reports with receipt scanning, invoice consolidation, and reimbursement request reduction. Check out these dos and don’ts:

Of course, streamlining your travel and expense reporting is only one part of the puzzle. You might also want to reduce your business travel expenses.

Use your business travel software to set up tags, categories, and cost centers. This will allow you to accurately calculate the ROI of business travel and set better budgets in the future.

TravelPerk allows you to track trip cancellations and recoverable VAT. If you find a high amount of trip cancellations (due to uncontrollable circumstances), you might choose

flexible, refundable travel instead

. You can also track all of the required details to

reclaim VAT

.

The better that your travel policies match your company, the better they will work. Set different policies for different travel reasons (such as recruiting), or for different teams (such as sales).

It’s impossible to set an accurate per night hotel budget if your company travels to multiple cities. With TravelPerk, you can set

dynamic budgets

that allow your employees to spend a certain percentage higher than the cheapest option available.When you digitize T&E reports as part of your travel management strategy, you save time for everyone at your company while collecting real-time, valuable data. And when you book travel

using travel management software

, you consolidate your vendor, so travelers don’t even need to create reports for those bookings.