Five tips for managing overseas business travel expenses
How do you keep control of employee travel expenses when costs are incurred thousands of miles away in an overseas country? Well... it's one of the toughest challenges faced by expense managers.
Along with all the normal problems you'd expect, there are the added complications caused by distance, different currencies and legal systems. Without a robust system, costs - such as a few extra drinks at the hotel bar, or a "small" upgrade to a business class ticket - can get out of control.
Expense fraud is a particular issue with dishonest employees able to exploit management inefficiencies. With it often taking weeks before travel expenses are processed, fabricated and exaggerated travel costs can easily go undetected.
It’s a challenge where digital technology is proving a powerful ally, providing more effective ways to streamline and police overseas costs. Here’s a look at ways to make sure your employees aren't making those little extra purchases.
Have a policy in place
A surprising number of businesses don’t have an expense policy that covers overseas travel. This tends to be the case with smaller businesses where foreign travel is likely to be the exception rather than the norm.
An effective expense policy should cover both domestic and overseas travel. It needs to create clear guidelines on exactly what can be claimed and the processes for doing so. It should be fair, accurate, and accessible in terms of transport, accommodation and subsistence.
A cloud-based management system allows policy reminders to be delivered in real-time via on-screen notifications. It can also automatically alert a finance team whenever an expense claim breaches the set limits.
Use expense management apps
The smartphone has become an essential tool for business travellers. It has transformed the way employees are able to manage and record their expenses while on overseas trips.
Webexpenses provides users with a powerful expense management app. It uses OCR technology to scan all paper receipts to be converted into a digital report in less than 20 seconds.
This streamlined process means accounts can be updated as and when costs are incurred. It removes the dreaded and painful post-trip task of having to manually process a bundle of foreign receipts.
Try to plan ahead
The more business travel arrangements can be planned ahead, the lower costs are liable to be. Research suggests that booking a business trip 28 days in advance results in 44.7% lower costs than if it had been arranged three days before. That's a lot of savings!
The cost advantages of planning ahead apply to all of the main expenses relating to business travel: flights, hotels, and any public transport. So allowing employees to leave travel bookings until the last minute can significantly bump up costs.
While this needs to be managed, the additional costs need to be balanced against the advantages delivered by a flexible and agile approach to travelling overseas.
Control currency conversion
Having to deal with constantly fluctuating exchange rates is a particular challenge when handling overseas expenses. When currency conversions are being done manually, it makes the processing of reports a slow and error-prone task for finance teams.
It’s one headache that can be effectively removed with digital expense management software. Webexpenses is able to automate the handling of multiple currencies.
Accurate currency conversions are done based on the exchange rate at the time that the cost was incurred. It creates a simple and fuss-free way to manage the troublesome areas of international business travel and expense management.
Stay on top of tax
Trying to figure out the tax rules for different countries is a daunting prospect. But avoiding this area means that many companies are missing out on expense costs that can be legitimately reclaimed.
Recovering these costs is made a whole lot easier when a digital management system is being used. This provides easy access to the accurate data that’s required by the tax authorities.
It also allows expense information to be easily shared with agencies that specialise in overseas VAT reclamation. It gives companies the option of recovering costs while avoiding the complexities of international tax laws. Nobody wants to get wrapped up in those!
If you're interested in an automated system to make sure your employees aren't overspending on their business trips, get in touch or request a demo to see how we can help you.