Travel & expense Management – Ignore at your own Risk

After people get employed, show up for work the next thing they do is they spend. They spend on variety of things like stationery, capital purchases, and operational expenses and so on. Most financial systems are built to take care of these kinds of expenses as they have a peculiar pattern. You can call for 3 quotes, select the vendor which provides the goods or services at the price point & the quality you desire and bingo – out goes the PO. Financial systems are tuned to record and track such expenses effectively and efficiently. But there is one expense that is sitting there which can throw all your financial planning haywire and force you to announce travel freeze at the end of the month or the quarter. Yes, that’s right the travel and other allied expenses that employees do on behalf of the company while doing their job.
As per certain market estimates Travel & expense (T&E) is the 2nd most difficult cost to control & monitor. In most companies’ digitization efforts, this particular aspect ends up in no man’s land. Since its primarily employee related expenses Finance & Accounts teams expect HR to take care of the automation while HR while deciding on an HRMS is more focused on the employee lifecycle of recruitment to retirement and  T&E does not figure in there scheme of things.
That’s why when you look at most HRMS in the market you would rarely find the T&E module included in the HRMS. But here is why it makes sense to have it within HRMS.

1. In most cases employees take travel advances and accounting for these advances is a tedious work. The overall employee experience can be greatly impacted if the company is able to make this process simple & smooth for the employee, the accounts & HR
2. In decentralized environments logging of multiple travel requests in the system can give powerful data in the hands of HR. Based on which HR can start asking questions like –
   1. Do we need to staff this location – as we seem to have this person deputed on site via an expensive travel arrangement?
   2. We seem to be doing a lot of air travel – can we negotiate with our vendor for better rates?
   3. This person seems to be expensing more than average for similar trips by other people in the same grade – what’s going on? The list is endless.
3. Reconciliation and integration with financial systems becomes easier thus ensuring that accounts and employees do not have to worry about papers travelling from one end to the other.
4. Within HRMS employee, his manager, & HR have access to various information about the employee. This enables them to look at his performance & behaviour in a holistic manner.
5. Comparing travel data with leave data or any other such data type to identify employee or group specific patterns of behaviour becomes easier.
6. The simplest of them all, the suspense in whether the travel request has been approved is gone and employee can easily check for the same. In a decentralized environment putting multiple approval workflows becomes possible as now the requests can travel electronically.
7. It impacts the behaviour of employees as governance mechanisms can be strengthened.

If you are a HR leader and looking for an HRMS solution including T&E in the overall suite makes sense. As per Forrester Research, managing T&E is a top challenge for most finance leaders but they don’t have enough time to devote to it. As you implement the HRMS you can surely partner with your Finance & Supply Chain team to deliver a greater ROI on your investments in HRMS.