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Travel and Expense Management

Travel Expense Management: Beginner's Guide

If you're looking to get a handle on travel and expenses at your company, you've come to the right place. Rocketrip has a number of resources that will help you establish an effective process for managing your employees' travel booking, spending, and expense reimbursement.

Our free example travel policy takes care of the heavy-lifting and eliminates the need to write your own from scratch. It's a customizable template that can be tailored to match your organization's specific requirements You can download your free copy here, and read more about expense management best practices in the post below.

Of the more than 1.3 million business trips U.S. corporate travelers take every day, no two are exactly the same. Each trip is defined by a unique set of characteristics, such as the reason behind the trip, the destination, the airlines and hotels used, the booking method, the cost, and ultimately whether the ROI of the trip justified that cost.

Motivate employees to spend less on business travel by letting them keep half of what they save. It's not rocket science, just Rocketrip. To learn how it works, schedule a demo today:

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For all the possible variation in business travel, there are a few commonalities underlying every trip - none more important than the need to track, process, and control the associated expenses. Though “expense management” refers to the systems deployed by a business to handle all employee-initiated expenses, in practice the term often means “travel expense management.” For the average organization, travel-related expenses account for a vast majority (60-80%) of reports that pass through the expense management system.1

Travel Expenses from Start to Finish

Travel related expenses aren’t only the most common type of report filed by employees, they’re also the most, well, expensive. Airfare and hotel rates dwarf the cost of other expensable purchases, such as office supplies or even meals. When T&E accounts for 10-12% of expenses at a typical company - second only to rent - it’s critical that the expense management system is optimized specifically for this cost center. That means having an integrated process to cover every phase of a travel-related purchase, from booking to reporting.

Rocketrip isn’t a booking tool or an expense system: it’s the link between them, a way to control costs, preserve employee choice, and acquire powerful insight into travel spend. You can learn more about how our platform works here. Read on below to see our beginner’s guide to the travel expense management process.

1. Travel Booking

The best expense management systems kick into gear as soon as a trip starts being planned, not after it’s already complete.

Large companies often encourage (or require) employees to book through an official channel, whether that’s a corporate travel agent, or an online booking tool such as Egencia. Cutting down on out-of-system “leakage” is one way to capture travel spending data while enforcing policy compliance, though there are limits to its effectiveness. Mandating certain booking methods reduces employee flexibility and, in some cases, fails to take advantage of competitively priced travel options available on the open market.

40-50% of employee travel is booked outside of a corporate travel system, so it’s critical to have a way to manage expenses that originate from many sources.2 Employees are used to shopping on sites like Expedia, or booking directly with airlines, hotels and rental car companies, and corporate travel systems are being forced to adapt. Concur Triplink, introduced in 2013, is one attempt to capture spend that happens outside the traditional TMC framework.

2. Expense Report Creation and Submission

Expense reporting in 2015 is very much a case of the good, the bad, and the ugly.

The good: a slew of technologies that make it easier than ever for employees to automatically push records of their expenses into the corporate system. Expensify, Certify and Concur all have mobile apps that let employees take pictures of their receipts and submit them with just a few taps on their phones. Major travel purchases made online, even those booked outside official corporate channels, generate electronic receipts that can be forwarded to managers, or directly into an automated expense management system. To business travelers who once had to track expenses offline - with pens, paper, copiers and Excel - this progress is almost unimaginable.

The bad? That progress is far from universal. According to one survey, 43% of companies rely on manual expense tracking processes, and the most commonly used software remains Excel.

Continued use of non-automated systems might partially explain this ugly statistic uncovered in that same study of expense management practices: one in five expenses submitted are in violation of company travel policy. Effective expense management systems prevent non-compliant purchases by flagging them before they’re reimbursed - and sometimes, before they’re even made.

3. Reimbursement

The reimbursement phase is really a sequence of events. First, purchases are reviewed and approved (or not approved). This may be done manually, by an employee’s manager or an HR administrator, or done with the use of a software application. Often times expenses under a certain amount are approved automatically while big ticket items trigger an additional review. After review and approval, employees are reimbursed for their expenses. Reimbursement can be done through the payroll system, or through a separate deposit into an employee’s bank account.

Though the different methods of reimbursement might seem trivial, they do matter: employees are more likely to submit expenses in a timely fashion if they know they’ll get their money back quickly and seamlessly. Rocketrip motivates travelers to submit their receipts as soon as possible by only awarding points after a trip has been approved.

4. Reporting

Employees don’t always see the point of booking through a TMC. But it's much easier to see the point of submitting their expenses (getting paid). That means expense platforms are uniquely suited to capturing data from every trip, and can provide the most comprehensive overview of a company’s travel spending. The most important travel metrics show what a company spends on an average trip, as well as where it's spending: which airlines and hotels are being used, how far in advance trips are being booked, and why certain travelers overspend while others find ways to save.

Putting It All Together

Expense management systems affect every aspect of a company’s travel policy. When working properly, they capture travel spending data, increase policy compliance, and reduce administrative costs.

But what makes a system work well? A recent survey conducted by Business Travel News found the top priority for travel managers responsible for processing expenses was “user friendliness.” The most important features those surveyed look for when improving their expense reporting systems included “receipt imaging” and “pre-populated credit card fields.” These might seem like small details, but they can make a big difference. Hendrik Vordenbaeumen, SAP vice president of product management for travel expense solutions, put it this way:

“A few years back, [the emphasis] was compliance and cost savings. Now [clients] are trying to focus more on the traveler … [and] an end-to-end [solution that gets] data from different sources and creates the expense solution more or less on the fly so the traveler doesn’t have to do too many things.”

In other words, travel cost savings can’t be willed into existence. Achieving them depends on the decisions made by individual employees, and these decisions are informed by how easy it is to use the technological solutions in place to manage travel. Even the most advanced expense systems won't work if employees hate using it. Focus on the end user, and results will follow.


1 T&E Expense Management: Solution Selection Guide. The Aberdeen Group, 2012.

2 U.S. Business Traveler: Managed, Unmanaged, and Rogue. Phocuswright, 2012.

All Tags: Travel and Expense Management, Travel Tech

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