Help finance and employees see business travel expenses in the eye

By Jessica Staley.

There is a quiet conflict going on within organizations today: Finance executives and employees are at odds. According to a 2022 survey, these groups have mixed perspectives on business travel and what constitutes appropriate spending, and it’s costing their companies money.

While 36% of business travelers said their industry was highly likely to see an increase in business travel before the end of 2022, finance executives were less convinced: only 12% agreed with this feeling.

Additionally, as of early 2022, only 16% of finance executives believed their company was ready to handle an increase in business travel by the end of the year, compared to 39% of business travellers.

Regardless of early 2022 sentiments, current data shows that business travel volumes are indeed on the rise. However, many organizations rely on fewer employees to handle the majority of business travel. Four in five global business travelers (82%) report that their company is returning to pre-pandemic levels, but with a “more travel with less shoulders” approach. Additionally, three in five (61%) say their current travel plans aren’t living up to their expectations.

Finance managers and business travelers also clash over spending policies and compliance. Ninety-eight percent of financial leaders said they saw an increase in non-compliant spending in 2021. This is consistent with business travellers’ reports, as 89% admitted to submitting at least one travel expense per year last which may violate your company’s travel policies. And while 53% of financial leaders attributed these non-compliant expenses to unclear policies, nearly two-thirds (65%) of business travelers admitted that the questionable expenses were presented intentionally.

Non-compliant spending can take a toll on a company’s finances, especially in today’s economy. The average value of non-compliant charges filed by business travelers in 2021, according to our survey, was a whopping $3,397.

There’s also conflict when it comes to reimbursements: 86% of business travelers reported that their company experienced delays in reimbursing business expenses at least once in 2021, and 89% noted that those delays have an impact on your personal finances.

As the volume of travel increases, the needs of business travelers matter more than ever. 91% of global business travelers say flexible travel and booking options are essential to protect their health and safety. However, 52% of US business travelers said their company’s leadership could have better prepared for an increase in travel by giving them more flexibility and control.

So what can a company do to resolve these tensions?

  • Invest in solutions: Companies need to evolve their compliance toolkit while keeping employees productive and happy. Fortunately, advances in technology offer solutions for all roles. Travelers can take advantage of real-time travel updates and booking apps, as well as tools for faster reimbursement and navigation safety requirements. Finance can update their audit processes using AI-powered automation, leading to 100% coverage. The threat of claims being reviewed is a big motivator for employees to do the right thing.
  • Update your policy in a targeted way: Review your policy at least once a year and find out what works by looking directly at your road warriors. Is the policy easy to understand? What scenarios have you come across that weren’t covered? Where were the pain points this year?
  • Reduce ambiguity: Make sure your policy addresses the bigger picture, why there are specific rules. Clarify company expectations. Proactively address ambiguous scenarios and best practices to meet compliance. Who pays for the TSA pre-check? How does the company handle personal travel in addition to business travel? When an employee understands the rationale behind guidelines, they tend to be more invested in following them.

Are travel and expense conflicts simmering in the background of your organization? By taking a few strategic steps, with a focus on policy refinement and thoughtful automation choices, you can create a collaborative culture that helps your employees see eye to eye.

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Jessica Staley is vice president of ISBN Product Success at SAP.

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