The pandemic changed the way we work, with virtual meetings and fully remote teams the new norm.
Business travel became nearly non-existent. Instead, finance departments shifted their employee expense budgets away from flights and accommodation, to laptop stands and at-home office chairs.
But as international travel returns and the health risks of the pandemic stabilise, businesses are slowly revisiting employee travel.
While we may never get back to pre-pandemic business travel numbers, work-related travel expenditure is slowly making a comeback. One Deloitte study found that corporate travel spend reached 36% of 2019 levels in Q2 2022 and 55% by the end of the year.
With that in mind, is your finance department prepared to manage an influx of employee travel expenses in 2023?
It’s worth forecasting how much travel expenses will rise for your company as the world continues to reopen and refining your expense policy to manage the increase.
To help you out, we’ve put together some tips for managing employee travel expenses the right way. But first, let’s take a look at some of the most common costs for travelling employees so you can start to categorise them in your policy.
When building your expense policy, it’s really important to know what kinds of travel expenses your team should and shouldn’t be claiming.
According to the ATO, the expenses your employees can claim for travel are:
So what can’t your employees claim when it comes to travel expenses?
This is a very high-level view of the dos and don’ts of travel reimbursements, so you’ll likely need to get more granular when building your policy. But it’s a good place to start.
So, how do you ensure your employees stick to your travel expense policy and claim for the right things, without micromanaging or restricting their ability to work?
We’re diving into three simple ways you can effectively manage employee travel expenses, while still empowering your team to work at their best while travelling interstate or internationally.
Inevitably, your team will be spending on travel expenses as the world opens up again. The key is to enable your team to spend autonomously by setting appropriate spending controls before they even reach the airport.
Spend controls allow you to assign individual spending limits and category spending rules that are embedded in your team’s corporate cards. Rather than operating in a reactive way, spend controls are a proactive tool to give you control and oversight of employee spending.
This is especially important when your team are travelling for work. With spend controls in place, your team know exactly how much they can spend on certain items (with access to pre-set budgets) and how to gain approval from managers if they need to spend more on certain trips.
With tools like Cape, budget owners have greater control and visibility of every transaction before they even happen.
In short, spend controls are the easiest way to ensure your employees are following your expense policy, even when travelling.
Sticking to budgets can be tough if you’re not putting limits in place on employee spending. As your team recommence work travel, you need to have the right systems in place to keep your spending in line with your budgets.
Through software (like Cape), budget owners can see all transactions in one place, which helps you keep tabs on employee expenses (such as travel expenses) in real time. Without ever needing to pull out a spreadsheet, all transaction data and approval processes are located in one place.
Plus, it’s important to look for tools that keep you informed on the rate of employee spending. Spending alerts and notifications can keep your team in the loop if a team member is about to hit a spend limit so you can either freeze cards or allocate more budget.
With automated budgeting software, you’ll never have to wait until the end of the month to see where your business’s cash is going either. By allocating budgets and spend controls in advance, your expense policy can police itself (rather than relying on your finance team to do the heavy lifting).
You want to give your team the tools they need to capitalise on the best opportunities. But when cashflow is uncertain or you’re waiting for accounts to settle, your team can be held back from working at their best.
By giving your team corporate cards with spend controls, they can make all the necessary purchases including travel expenses without slow approval times.
Make sure you’re looking for corporate cards with no hidden fees, good credit terms and repayment plans that you can easily meet. This will give your people the capital they need to make the most of work trips, without worrying about your short-term access to cash.
International travel bookings paid for in foreign currency usually come with an FX and processing fee which can cost you over 3% per transaction with most traditional business credit cards.
Here at Cape, we’ve included free international card spending on all our pricing plans so you can save on everyday FX fees.
So, how does it work? We convert the money you spend on purchases in a foreign currency at the same conversion rate available to us. Plus, we don’t add any processing fees, so you can save and use that money to support business growth.
Now that the pandemic has stabilised and travelling has resumed, your employees are likely going to be travelling for work. This can be pretty costly if finance departments aren’t prepared and ready to manage travel expenses.
But with effective management through spending controls, budgeting and corporate cards, your team can be empowered to spend while travelling, without breaking the bank or blowing your budgets.