Travel & Expense Automation: In-Depth Guide to Benefits [2024]

Travel and expense (T&E) management costs can exceed 10% of a company’s budget, which is a significant operational expense.¹ While nearly 80% of companies say that they have a formal travel and expense policy, around 70% use manual methods to enforce it.²

In this article, we’ll explore what travel and expense automation is, how manually managing this process can lead to high costs to organizations and the benefits of automation.

What is travel & expense (T&E) automation?

Travel and expense automation is the use of technology to streamline the process of booking, tracking, and reporting on travel and related expenses for tax deduction purposes. Travel-related expenses include:

• Accommodation: hotels, lodging
• Transportation: Plane, bus, train tickets, taxi fares, gas fees
• Other: Food, baggage fees, events, tips, and equipment rental related to the travel

Automation makes it easier for employees to book travel, submit expenses, and monitor spending while providing employers with insights into their employees’ travel and expense activities. Automation also reduces the time and resources associated with manual processing, saving businesses time and money.

What are the challenges of manual travel & expense management?

The travel and expense management process consists of:

• Travel request: Employees place a request for a business trip with details of the travel
• Travel approval: The travel request is reviewed according to the company’s travel and expense policy and approved by the employee’s manager and finance department.
• Submitting expense report: To request reimbursement, the traveling employee creates a report with information about the travel-related expenses such as:
  • Date of purchase
  • Expense category
  • Receipts
  • Tax associated with the purchase
• Expense approval: Managers and the finance team review the expense reports to approve or reject them before paying employees reimbursement. In cases of rejection, employees are expected to review and resubmit the report.
• Reimbursement: Upon approval of the expense report, employees can receive reimbursement. 

The disadvantages of manual travel and expense management are:

Time-consuming and error-prone reporting

The top pain points of travel and expense management are:

• Employees losing paper receipts and submitting reports without receipts
• Employees fail to submit reports on time
• Errors on the reports, such as incorrect payment amounts³

Collecting and entering all travel-related information into the expense report manually is daunting and prone to errors. According to a recent study, around 20% of expense reports contain errors and missing information.⁴

Risk of expense fraud

Expense fraud costs the U.S. economy $2.8 billion per year⁵, and nearly half (42%) of public sector decision-makers in the UK admit to having submitted a fraudulent expense claim.⁶ Manual expense reporting and review is susceptible to fraud like with any other claim, as expense fraud is often in the form of:

• Submitting a single expense multiple time
• Overstating expense claims
• Using fake receipts

These fraudulent behaviors can easily go unnoticed if they are subtle.

Delays in reimbursements

Manual expense reporting and approval can be complicated and involve a back-and-forth between employees, managers, and HR and finance departments. It can take over a month between employees submitting expense reports and receiving their reimbursement amount  (called the reimbursement turnaround time).⁷

Delayed travel expense reimbursements can harm employee satisfaction as it can:

• Force employees to cover costs incurred on behalf of the company out of their personal funds if reimbursement occurs too late and if they had made a large purchase.
• Create distrust among employees and damage employee morale.

What are the benefits of travel & expense automation?

An automated travel and expense management system enables:

• Reporting expenses on the go from any device by capturing receipts through NLP and OCR technologies. This saves employees from manual data entry to create expense reports.
• Checking expense claims against the company’s expense policy automatically to ensure policy compliance.
• Preventing fraudulent expense claims through fraud detection methods.
• Reconciling expense data from receipt scans and credit card purchases and making necessary reimbursement automatically.
• Having real-time visibility into travel-related expenses for finance teams. This allows more accurate forecasting and better control of the company’s cash flow.
• Centralizing travel and expense management data and connecting it with other enterprise systems such as ERP or HRMS.

For more on finance and HR automation

• HR Automation: Top 8 Processes to Automate
• Finance Automation: What It Is &Top 6 Processes to Automate

If you have other questions about travel and expense automation, we can help:

External Links

• 1. “4 Ways to prevent expense report fraud.” U.S. Bank. Accessed 9 December 2022.
• 2. “2021 Travel and Expense Management Trends Survey Demographics Travel and Expense Policy Managing Non-Employee Spend Dedicated So. (PDF)” Emburse. Accessed 9 December 2022.
• 3. Ibid.
• 4. “How Much Do Expense Reports Really Cost a Company?” Global Business Travel Association, 20 July 2022. Accessed 9 December 2022.
• 5. See supra note 1.
• 6. Kent, Alistair. “42% of public sector decision makers have submitted fraudulent expense claims, study finds.” SAP Concur, 1 November 2022. Accessed 9 December 2022.
• 7. Perrotta, Adam. “2019: Navigating from T&E to ROI.” Business Travel News, 17 March 2019. Accessed 9 December 2022.