Team Happay
By: Team Happay
Published on: April 10, 2018

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With the ongoing Economic globalization, Travel and Entertainment (T&E) related expenses are on the rise. India is the world’s tenth largest business travel market and is likely to clock the fastest growth in this segment in the next five years. Business travel spending is expected to treble until 2030 from $30 billion in 2015 (KPMG report).

In fact T&E forms the second largest operational cost for most organizations after employee payroll. Managing T&E expenses is one of the key priorities for all organizations today. However most enterprises focus on cutting down on travel rather than finding ways to control the expenses.

That may not be a good idea for companies looking at building relationships with customers, partners across different countries. To stay competitive in a world with increasingly connected commerce this is critical. An American Express business travel study of European firms shows that 52% of companies view their investment in business travel as a way to maintain market share, and 44% see travel as a route to increasing share.

Instead of cutting down on travel, it would be prudent for companies to manage these costs wisely and get the maximum impact for what they spend. For this, they need to recognize the critical role expense management solutions play. These solutions can provide them with controls that can help them monitor costs and optimize spending.

4 Levels of controls offered by T&E expense management solutions:

At Payment level:
Keeping a track of T&E expenses is getting more and more complex. Employees make payments through multiple channels – credit cards, cash, online transfer, mobile apps. Further their choice of vendors has also increased, for travel as well as accommodation.

Invoice is raised in different formats, through different sources, which makes accounting and expense claim filing difficult for finance teams. It also makes it difficult for team leaders to keep a track of spends of their team members.

T&E expense management solutions linked to highly controllable travel cards can address this challenge. It can allow team leaders to set a limit for spends as well as increase and decrease the limit real time. The payment channels can also be restricted as per company policies. The team leader can transfer any amount from travel card of one employee to another when needed, give the card to any employee he wishes to, for the card is not linked to employees’ bank account. The employee also has the flexibility to make all payments through one card.

At Policy level:
To adhere to compliance norms, it is important to embody your corporate policies that are on paper on to the T&E system, refine policies based on data and proactively control leakages and frauds. For example if data depicts that employees are using services like Ola/Uber more for local travel, then a corporate tie-up with the company enabling special privileges could be made available, and specific guidelines laid down. All company guidelines can be integrated into the travel card of employees, enabling management to get a better view of spending patterns. They can also assess likelihood of fraud if there are any major discrepancies in spending patterns. As per a report by London School of Economics lecturer Dr. Alexander Grous, corporate cards reduce processing times by 24% and minimize the risk of fraud or duplicate submissions.

At Compliance level:
With increasing corporate fraud, compliance norms internationally have become stringent. Companies operating in a global marketplace need adhere to these norms, have the ability to deal with multiple currencies, taxes and regulations of other countries. A good expense management solution can incorporate compliance rules into the system. Employees can be reminded of these rules every time they enter a new expense. Irrespective of that if a violation occurs, the system can track it at the time of expense report submission and notify the employee as well as his manager so that immediate corrective action can be taken. The automated system can also generate reports with details on hard and soft violations, top violators and top expense categories on which violations exist. With these insights, the management can find better ways to enforce policy guidelines and maintain compliance as per international standards.

At Accounting level:
Manual accounting is becoming increasingly difficult for finance teams. T&E expense management solutions integrate directly with accounting software and ERP solutions so that travel and expense data can be fed from the T&E software into accounting in real-time. This not only makes the accounting process more efficient but also helps in drawing relevant insights through data analytics.
T&E expenses are the second largest controllable enterprise spends, yet most organizations don’t focus on controlling it. Studies depict that if enterprises can automate the T&E processes, they can save huge costs. As per a GBTA study, the average total cost to fix one expense report is $52. Automating expense processing can reduce this number to as low as under $10. Further, companies with more than 80% compliant travel expenses enjoy 23% lower total indirect costs per traveler than companies with lower policy adherence. The time is ripe for enterprises to intelligently tame the second largest operational cost. The sooner they do it, the better advantage they will have in this competitive world!


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Team Happay
The editorial team at Happay puts together curated content that helps Indian SMEs and Enterprises take control of business payments. We create content on a wide array of topics from B2B payment trends and spend management best- practices to real-life case studies of how CXOs of different organizations use automation and mobility to manage business spends more effectively.

One response to “Taming the T&E Beast: 4 ways to control the second largest operational cost”

  1. Avatar Shital Thakare Shivalkar says:

    Corporate’s based on the business travel frequency can tie up with e- travel partners like Make my trip,goibigo etc .they design their portal for corporate requirement with ease to operate for employees with monitoring by team manager. Based on Corp compliance they can show the 3-4 best affordable travel options with approval from team manager.easy to track from TM,finance as well.

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