Streamline travel expense reporting with corporate cards

Business travel can be an exciting part of the job—meeting clients face-to-face, visiting new cities, and spending quality time with your team. As a business leader, you have likely experienced the thrill of travelling for work.

However, one aspect of business travel that can quickly dampen the excitement is expense reporting. Collecting receipts, filling out forms, and ensuring compliance with company policies and UAE VAT regulations is enough to make anyone's head spin. It is a necessary evil that can be incredibly time-consuming and frustrating.

But like all complex things, there is a way to simplify it.In this blog, we will cover the best solution for your travel expense reporting woes: corporate cards.

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What is travel expense reporting?

Travel expense reporting is the process of documenting expenses incurred during a business trip, such as flights, accommodation, meals, and others. This travel expense report is then submitted to the finance team for further processing. 

Travel expense reporting is a critical function for companies, especially those with employees who travel frequently for work. With a clear record of your company's travel expenses, you can gain actionable insights into your spending patterns to identify cost-saving opportunities.  

Why is travel expense reporting important?

Expense reporting is more than a routine administrative task under corporate travel management as it plays a vital part in the operational efficiency of a company. Here are some of the most important benefits of this process:

• Financial accuracy: Precise travel expense reporting provides a true picture of your company's spending, which is essential for maintaining accurate financial records. Without precise reporting, you might find it challenging to track the expenses, leading to potential financial discrepancies.
• Compliance with company policies: Travel expense reporting helps ensure that all expenses align with your policies. It allows you to monitor if your employees are adhering to the set guidelines for accommodation and travel costs, meals, and other incidental expenses. Non-compliance can lead to unnecessary costs and adversely impact the bottom line.
• Budgeting and forecasting: Accurate travel expense reporting provides valuable data that can be used to predict future spending trends, helping with effective budget planning. This can be beneficial for companies in the UAE region, where travel can be a significant part of operational costs.
• Risk of inaccurate reporting: Inaccurate travel expense reporting can lead to several risks, including financial losses and regulatory penalties by the Federal Tax Authority (FTA) in the UAE. This can damage your company's reputation and lead to internal trust issues, adversely affecting employee morale.

Traditional way of managing travel expense reporting

Traditionally, travel expense reporting has been tiresome manual work. It requires employees to manually save every receipt and then tediously enter these expenses into spreadsheets. A misplaced receipt or a data entry mistake can lead to inaccuracies in the expense report, causing financial discrepancies. The entire process is inefficient, time-consuming, and prone to errors.

Challenges of traditional travel expense reporting

The traditional approach to travel expense reporting might seem straightforward, but it presents some serious challenges:

• Poor data visibility: Traditional methods often lack efficient systems for tracking and managing expenses, leading to a lack of transparency. This opacity can make it difficult to gain a clear understanding of employee travel expenses, potentially leading to overspending or misallocation of resources.
• Inefficient processes: The manual nature of traditional expense reports, such as handling paper receipts and manually entering data into spreadsheets, can be incredibly time-consuming and inefficient. These processes consume valuable time for employees, leading to higher operational costs and reduced productivity.
• Compliance issues: Traditional methods make ensuring compliance with business travel policy a significant challenge. With complex expense categories and varying company policies, it can be difficult to ensure that all expenses are within policy limits. Non-compliance can lead to unnecessary costs and result in legal issues with tax authorities.
• Delayed reimbursements: Traditional methods can lead to slow reimbursement cycles, causing inconvenience for employees who often have to wait for extended periods to get reimbursed. This delay can lead to employee dissatisfaction and negatively impact their productivity.

The modern way to simplify travel expense reporting

The modern approach to travel expense reporting is a significant departure from traditional methods and combines the use of corporate cards with integrated expense management software. Corporate cards allow companies to manage their business expenses through features like smart controls, pre-approved spending limits and more. 

Meanwhile, the software integrates with accounting systems to automate the expense management process, capturing expenses in real time and categorising them accurately. This synergy of technology and financial tools is transforming the way businesses handle travel expenses.

Benefits for employees

Let's have a look at some of the benefits of using a corporate card  for travel expense reporting for employees:

• Streamlined expense tracking: Integrated expense management software, when used together with corporate cards, can streamline the expense tracking process. As your employees make purchases with their corporate cards, the expenses are automatically recorded in real time. This eliminates the need for employees to save paper receipts or manually enter data, reducing their administrative burden. It also improves the accuracy of expense reporting, as there's less risk of lost receipts or data entry errors.
• Elimination of reimbursements: Corporate cards can fundamentally change how your company handles employee expenses. Instead of requiring employees to pay out-of-pocket for business expenses and then wait for reimbursements, corporate cards allow expenses to be charged directly to the company. This eliminates the hassle of submitting expense claims and means employees don't have to worry about being out of pocket.
• No need to track forex rates: For employees travelling internationally, corporate cards offer a significant advantage in terms of handling currency conversions. They automatically convert foreign transactions into home currency at competitive rates, removing the need for employees to track fluctuating forex rates. It also ensures that your company is not losing money on unfavourable exchange rates or foreign transaction fees.

Benefits for finance teams

The modern approach to travel expense reporting offers the following benefits for finance teams:

• Improved policy compliance: Corporate cards can be configured with specific spending limits, approved vendor lists, and category restrictions, which can prevent non-compliant transactions at the point of sale. This automatic enforcement reduces the risk of overspending and policy violations. It also eliminates the need for your finance teams to manually review each transaction for compliance, saving time and resources.
• Real-time expense monitoring and management: Corporate cards, when integrated with an expense management system, provide real time data on spending. This means your finance teams can monitor expenses as they take place rather than waiting for end-of-month reports or reimbursement claims. This real-time visibility can help identify spending trends, detect anomalies, and ensure that spending is in line with budgetary constraints. 
• Integration with expense reporting software: Corporate cards often integrate with an expense management solution, creating a seamless expense reporting ecosystem. This integration allows for automatic capture and categorisation of expenses as they occur, eliminating the need for manual data entry. The expense software can accurately identify and categorise VAT-eligible spending, helping your company claim the correct VAT refunds and avoid penalties for inaccurate reporting.
• Enhanced security: Corporate cards offer several layers of security to protect company funds. Virtual cards, for instance, can be issued for specific vendors or spending categories, reducing the risk of misuse. They also have a limited lifespan and can be cancelled immediately if compromised. Chip-enabled cards offer enhanced security against expense fraud as they are harder to clone compared to magnetic stripe cards. Corporate cards also offer advanced features like real-time notifications for every transaction, which can alert your finance team to any fraudulent claims instantly.

Tips to simplify travel expense reporting

Here are some actionable tips to help simplify your travel expense reporting processes: 

• Clear policies and training: Having clear policies in place is crucial, but it is equally important to ensure that these policies are well communicated and understood by all individuals. Ongoing training sessions can help employees better understand the nuances of using corporate cards for business travel expenses. These sessions can also act as a platform for employees to clarify their doubts, ensuring they are comfortable using corporate cards.
• Regular audits: Regular audits maintain transparency and compliance and help identify potential improvement areas in expense policies. These audits can reveal patterns, such as frequently overspent categories or common policy violations, which can inform policy updates. Being aware that their spending is being tracked can motivate employees to be more careful with their expenses, which can enhance adherence to company policies.
• Use of technology: An expense management platform can provide valuable insights into spending patterns, identify potential savings, and automate approval workflows. This efficiency in the expense reporting process frees up your finance team to focus on strategic tasks instead of administrative duties. Tools like automatic receipt scanning and categorisation can greatly reduce the chances of mistakes in expense reporting procedures.
• Employee awareness: While corporate cards offer numerous benefits, they can only be effective if employees actually use them. Therefore, it is essential to communicate these benefits to employees along with details on the types of expenses allowed, spending limits, and the expense reporting process. Highlight how using corporate cards can eliminate the expense reimbursement process, which can otherwise be a significant pain point for many employees.

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Streamline your travel expense reporting with Alaan

At Alaan, we understand the challenges businesses face when it comes to travel expense reporting. That is why we offer advanced corporate card and expense management software to streamline this process for your company.

Our corporate cards are designed with businesses' needs in mind. We offer both virtual and physical cards, providing flexibility and convenience for employees. Each card is equipped with advanced chip and pin technology for secure transactions.

Our corporate cards are integrated with spend management software to streamline the entire process, enabling real-time monitoring of your company's expenditures. This lowers the administrative burden on your employees and enhances the precision of your expense reporting procedures.

One of the standout features of our offering is our AI-powered insights. By leveraging state-of-the-art natural language processing capabilities, we offer an intelligent, intuitive, and efficient expense management experience. Our advanced AI-powered system helps you manage your business costs with improved accuracy, speed, and convenience.

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Get in touch with our experts to learn more about our travel expense reporting and management solutions.

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