2024 guide to travel and expense management

Travel and expense management is a massive undertaking, whether you have 50 employees who travel for business or 5,000. Accurately collecting and reporting on all travel-related expenses is a challenge for finance managers worldwide.
Fortunately, in recent years, things have changed. Today, modern software eliminates the need for paper expense reports, manual reimbursement processes, and back-and-forth approvals.
In this guide, we take a comprehensive dive into travel and expense management. We showcase the signs that your processes may not be up to date, and the solutions available to help you optimize your workflows.

All about travel expense management

Travel and expense management (T&E) is the process of collecting all travel-related expenses in order to not pay taxes on that amount. In most countries, business-related travel and entertainment costs, including flights, hotels, and ground transportation count as tax deductible expenditures.
Whether or not food purchases are fully expensable depends on the country. In the US, food and beverages are 50% deductible, whether the expense is incurred during an event, a business trip, or a client dinner in your home city. Meanwhile, in the UK, food and beverages are fully tax deductible.
While the rules may differ by country, one thing holds true: tracking all deductible employee expenses is essential for lowering a company’s tax liability. T&E software is designed  to track these expenses for tax write-offs and financial analysis accurately. With the right data in place, businesses can benefit from greater financial visibility and make smarter budgetary decisions.

Pain points of ineffective T&E processes

If your travel and expense management processes are inefficient, your employees  will experience a lot of frustration. High processing costs and inefficient workflows are just some of the challenges facing small businesses without a .
Here are just a few of the obstacles that businesses face with travel expense management processes.

A need for comprehensive guidelines

A key reason businesses face issues when managing travel expenses is that they lack a comprehensive travel policy. Without a policy that clearly outlines your guidelines on business travel expenses, including rules on accommodation, meals, entertainment expenses, and reimbursement processes, the entire process becomes unwieldy, expensive, and inefficient.
Every company that engages in business travel needs a solid travel expense management policy to help eliminate any confusion over what is and isn’t covered, and how and when employees will be reimbursed.

Lack of control and autonomy for travelers

The old-school way of T&E management was all about control. An office or travel manager would book all trips to control costs. But this frustrated travelers, stripping them of choice and often leading to an endless chain of emails.
Nowadays, most corporate travelers book their travel arrangements online, but this presents its own challenges….

Unauthorized bookings

When you rely on manual processes, unauthorized travel bookings can easily slip through the cracks. Even though you might have pre-approval processes in place, it can be difficult to identify which bookings fully comply with your travel expense policy guidelines.
Travel expense management solutions, on the other hand, help you to set specific spending limits for each business travel booking and guide travelers towards compliant options.

Paying too much for business travel

Every business wants to keep travel costs down. However, smaller businesses might find it more difficult to establish .
There are a variety of on the market that not only provide an innovative online booking platform, but a chance for your team to save money and streamline the way you book corporate travel.
These platforms can help business save money on travel costs. They offer extensive and from which you can search, book, and manage employee travel all from within one easy-to-use platform.

Endless expense admin

Corporate travel generates several administrative tasks that are more challenging when relying on manual expense processes. For example, without a corporate travel booking solution, office managers can be left to wrangle invoices from a myriad of providers for tax season.
Without a travel management platform and corporate credit cards in place, travelers will have to pay for things upfront and manually file a reimbursement request later. Plus, finance managers working without automated reconciliation must spend hours reconciling expense reports against corporate credit card purchases.

Lost receipts

The loss of paper receipts is a huge challenge for those in charge of small business expense management processes. When employees lose receipts, your business cannot reimburse them without risking compliance issues with the IRS.

Inaccurate T&E spend reports

Expense report processing is a costly exercise, especially when these processes need to be repeated due to inaccurate and/or late expense form submissions. Outdated, manual systems consist of slow and laborious submission workflows, as well as multiple opportunities for human error.

Slow reimbursements

Reimbursement processing is time-consuming when done manually, leaving business travelers out of pocket. This could be challenging for managing their own personal finances and leave employees feeling disgruntled especially if they had to make a large purchase for business purposes.

Lack of real-time T&E cost tracking

Manual travel expense management processes prevent you from gleaning insights and data into your travel costs and expenses. Not only can this manually managed data be recorded inaccurately, but you also cannot access a higher level of visibility offered by digital platforms. When your expense processes are slow, your data collection is slow too. Without tracking expenses in real time, you can’t make informed business decisions or predict and plan for future travel costs. Plus, instances of can easily go unnoticed.

What an effective T&E management tool can provide

Using the latest travel and expense management solutions can revolutionize your company's corporate travel. A comprehensive tool will assist with:
  • Full visibility into real-time travel spending: With automated expense reports and consolidated , your finance team will have real-time expense tracking to help them better understand your travel program.
  • Options and autonomy for travelers: By integrating company policies, a travel management solution empowers business travelers to choose their own trip options. No need for travelers to pay upfront: Big business travel purchases like airfares and rental cars shouldn’t require travelers to request a reimbursement. When booking on a business travel platform, the company can pay one monthly invoice and reduce admin for everyone.
  • No need for travelers to fill out expense reports: The right will automate T&E  workflows. A mobile app can scan receipts so travelers don’t have to enter data into the expense management tool manually.
  • Fast for office managers to collect invoices: When you consolidate your travel costs into one corporate , you receive just one invoice at the end of each month.
  • Automated purchase reconciliation: Expense data from receipt scans and corporate credit card purchases should be automatically reconciled.
  • Automated reimbursement approvals: Automate your company’s T&E  policy with rules so that food or taxi purchases under a certain amount can be automatically reimbursed without needing approvers to review manually.
  • Quicker reimbursement funds for travelers: Even with consolidated business travel booking, the odd per diem expense will still be generated on the road. But with an automated expense reimbursement process, your employees won't be left waiting.

The best systems for travel and expense management

To manage your travel expenses accurately, you need the right An enterprise resource planning (ERP) solution that isn’t purpose-built for travel won’t cut it. In fact, you need two different programs that are fully integrated, a travel management platform and an expense management software.

Travel management platform

You need a travel management platform to help you control company travel, without actually micromanaging anyone. A modern travel management platform allows you to create customizable travel policies that work at the time of booking. This is not just a static .
A business travel platform also reduces manual work associated with business travel, because travelers can book for themselves and choose the options they want within policy. What’s more, there’s no need for reimbursements, as a business travel platform should consolidate spend into one monthly invoice for the finance team to pay.
What to look for:
  • Great trip inventory
  • Customizable travel policies and approvals
  • Monthly invoice to consolidate payments
  • High-quality customer support
  • Insightful travel spend analytics and reporting
  • Easy-to-use mobile app for travelers
Consumer-grade functionality to inspire greater policy compliance Travel and expense management that works like a dream

Expense management platform

On the other hand, an expense management platform doesn’t actually help you purchase travel. Instead, it pulls all transactions from company credit cards into one place. It also securely stores your receipts and invoices for tax audits. And, expense management systems also provide complex analytics and simplify the reporting process.
Make sure to choose a modern SaaS version that works in the cloud on any device. This way, employees can use their mobile phones to scan and upload receipts in real time.
Some purchases require reimbursement. For example, if a traveler pays a local taxi company. Your expense management platform should help speed up reimbursement processes, and reduce manual work.
What to look for:
  • Receipt scanning to reduce manual data entry
  • Automated expense approval and reimbursement workflows
  • Rules and automatic approvals for low-cost expenses
  • Easy-to-use mobile app for employees
  • Corporate card integrations and data importing
  • Expense reporting and analytics
Let’s take a look at some of your options.

3 Top travel expense management solutions

These travel expense management solutions help you get full visibility over your company spending and improve the employee experience for your traveling employees. It’s essential to consider your location, as different countries have different rules and regulations regarding various business expense categories. Here are our top three picks, each serving a different region.

Divvy: for the US

Divvy is an online expense management platform software that provides users with physical and virtual cards. Divvy gives businesses real-time visibility into spending and flexible controls for hassle-free spend management.
Key features of Divvy:
  • Access the funding you need with credit lines up to $15m available to companies of all sizes.
  • When spending with Divvy, get rewards on restaurants, hotels, travel, and more.
  • Languages supported: English
  • Pricing: Free.
to provide US-based SMBs with a comprehensive online portal for booking, managing, and reporting on corporate travel.

Pleo: for the UK

Pleo simplifies business expense management for businesses big and small. Free your team from admin by automating key tasks and stay in control with spending analytics.
Key features of Pleo:
  • Pleo integrates with invoicing software to automate payments and offer enhanced spend visibility.
  • Easily track out-of-pocket expense claims to ensure swift expense reimbursement in line with your company's policies.
  • Languages supported: Danish, German, English, Finnish, French, Dutch, Norwegian, Portuguese, Spanish, and Swedish.
  • Pricing:
    • Starter: free
    • Essential: £39/month
    • Advanced: £69/month
to simplify travel expense reporting. Simply make a booking with your Pleo card to reconcile your expenses and receipts automatically.

Yokoy: for DACH

Yokoy is an AI-powered spend management solution that consolidates and automates all accounts payable processes on one platform.
Key features of Yokoy:
  • Yokoy services and products are available individually or as a pack, so you only buy what you need.
  • The AI-based tool analyzes and approves standard expenses and automatically creates real-time expense reports.
  • Languages supported: German, English, French, Italian, and Chinese.
  • Pricing: Based on requirements.
Alongside your day-to-day business expenses, , automatically registering TravelPerk bookings for streamlined travel expense reporting.
Finding an expense management solution that integrates with your travel management platform is key for spending visibility and management. These top three expense solutions ensure you’ve got all the data you need to manage and report on business spending.

We caught up with Katharina Wodischeck from adsquare to hear her thoughts on Travel & Expense management.

How important do you think it is to have visibility on a company's travel expenses and why?
"With having a clear visibility on travel expenses, a company is able to accurately track travel spends, and therefore budgeting and forecasting can be made more precisely.
Beside that, the visibility gives the opportunity to analyze expenses by travel category, departments, and therefore helps streamlining the reporting process. And finally, having insights on the travel spend helps the company to create effective expense policies."
In your opinion, what are the biggest challenges in managing T&E?
"In my opinion, one of the biggest challenges is that too many businesses are still managing T&E using excel sheets and therefore wasting a lot of time for manual processes and reconciling receipts.
That lack of visibility makes it difficult for finance teams to identify which employees incur what expenses. Another challenge I see are unclear T&E policies. This can lead to unexpected and unauthorized purchases and moreover to consequences in terms of cost control and overseeing travel budgets."
What advice would you give to someone who's struggling with managing their company's travel expenses?
"My advice would be to find a technical solution and therefore to automate the process as much as possible. It would make sense to capture all travel bookings and expenses in one system and enable all employees to manage travel bookings and expenses on their own according to the corporate travel policy."
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