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Small Business Travel Expense Management: Tools & Tips for Clever Spending

~6min reading time –
Business Travelling Expenses

Business travel is no longer a luxury; it is a necessity for businesses to thrive. From client meetings to conferences, many small businesses rely on employee travel to build relationships. GBTA's study reports that the Global business travel industry is expected to exceed $2 trillion by 2028, underlining its importance.

Yet, business travel expense management often lags. Over 1 in 10 businesses rely on employees to manually file expense reports, resulting in errors and inefficiencies in the system. Small businesses need an expense system that empowers growth, not suppresses it. Let's explore the key challenges in business travel expense management and discuss the smarter tools that can help address them.

What Is A Business Travel Expense?

Business travel expenses are costs incurred by employees while traveling away from their place of work for business purposes. These expenses are reimbursable and shall be undertaken solely for work purposes. Common business travel expenses include:

  • Transportation costs
  • Hotel accommodation costs
  • Meal expenses
  • Car or bus rentals
  • Parking fees
  • Internet fees
  • Travel insurance

Challenges Of Managing Business Travel Expense

While business travels are meant to fuel growth, they end up being a huge expense pool that businesses drown in. From expense report errors to fraud risks, business travel quickly spirals out of control.

Here are some of the issues faced by small businesses while managing their travel expenses:

1. Manual Expense Reports: While the world embraces digitalization, certain corporate structures are still stuck in the past. Businesses continue to report expenses manually using spreadsheets and receipts. According to GBTA, companies process an average of 51,000 reports each year, each taking around 20 minutes to file. At the same time, 19% of business reports contain errors.

2. Delayed Expense Visibility: Employers often have no visibility of how the travel budget is being used. Since the expenses are reported after the trip ends, it ends up being too late to enforce policies, control costs, or reduce overspending.

3. Risk of Expense Fraud: Manual reporting and lack of real-time visibility also lead to a rise in expense fraud. Common issues include duplicate entries or inflated receipts. In fact, the Association of Certified Fraud Examiners (ACFE) estimates that organizations lose 5% of their revenue to expense fraud annually.

4. Delayed Reimbursements: Admins or HR teams often require multi-level approval to reimburse travel expenses; however, this creates frustration in the employee's mind. Delays in reimbursements impact trust and employee motivation to work productively.

Best Practices For Business Travel Expense Management

Small businesses need a plan and system to tackle the challenges in managing business travel expenses. Here are the best practices to implement:

1. Establish Clear Policies: Set clear written guidelines with employees that define the total allowable expense. Clarify daily expense limits, expense categories, and approval flows. When employees know what's covered, there is little room for confusion.

2. Automate Expense Reporting: Consider accounting software that automates expense reporting to reduce manual errors. Discover automated tools that capture every employee expense and categorize expenses accordingly.

3. Use Prepaid Travel Cards: Issue prepaid travel cards to control unnecessary spending and avoid lengthy reimbursement processes. Prepaid cards also allow employees to plan better and not pay out of pocket, and then wait for reimbursement.

4. Monitor Expenses Regularly: Don't wait until the end of the quarter to oversee expenses. Monitor travel expenses regularly to spot overspending and detect fraud, if any. Switch to automated tools that give you detailed spending reports to avoid manual tasks.

Why Prepaid Travel Cards Work Well For Businesses?

With the above challenges and rising travel costs, one thing is clear: small businesses need an automated solution. One of the simplest tools to reduce overspending and manage business travel expenses effortlessly is a Prepaid Card. But what exactly is it?

A prepaid travel card like the one offered by CleverCards is preloaded with company funds and can be issued to employees instantly over email, no matter where they are. It is a digital Mastercard sent to the employees to meet their business travel expenses whenever they need. Clevercards are easy to use, highly secure, and designed to give both employees and finance teams complete visibility and control.

Here's how CleverCards travel card simplifies travel expense management:

  • Travel cards can be sent to employees instantly, digitally. No paperwork involved.
  • Employers can configure card settings to include a fixed budget, spend limits, and categories.
  • Employees no longer have to wait for weeks to get reimbursement, reducing the financial burden.
  • The finance team can track every transaction in real-time from a central dashboard, while employees can track their balance in the CleverCards app.
  • These cards are digital Mastercards that can be connected to Google Pay and Apple Pay and can be used to pay over 50 million+ merchants worldwide.

Clever Travel Expense Management: The Right Growth Lever

For most small businesses, business travel is a necessary growth investment. However, with a poor system, it can feel like an operational and financial burden. CleverCards aims to offer a modern, easy and instant solution that is flexible and transparent for every organisation.

Want to learn how you can get travel cards for your employees? Fill out the form below.