In recent years, many companies have noticed that the number of business trips and the expenses for them have been constantly increasing. Therefore, the costs in this area are under close scrutiny, especially for companies with many traveling employees. The Association of German Travel Management e.V. publishes an annual study on the development of travel and travel costs in companies. The focus is also on travel expense accounting. More than 800 German companies from all industries and size classes were surveyed.
The VDR business travel analysis for 2014 clearly shows that the number of business travellers is rising again. In 2013, companies reported more than 170 million business trips, which cost 48.2 billion euros. On average, each business traveller spent 148 euros per day during the study period. Travel expenses are made up of many different items, including travel and accommodation costs, entertainment expenses, parking fees, catering expenses, rent for event rooms, trade fair tickets and others.
Larger, medium-sized and smaller companies were surveyed. In the area of travel expenses, companies with more than 1,500 employees were able to reduce their expenses by more than 2 percent compared to the previous year. Many of them are employing specially trained employees, the travel managers. They not only organize trips and overnight stays, they also take care of the sustainability of the trips, service quality and data protection, which is often neglected when traveling. In many companies, travel expense reporting is based on the drafted travel guidelines.
A not inconsiderable part of the total costs is accounted for by the travel expense account. The administrative effort is high, as receipts have to be collected, checked for legal and operational requirements and the data recorded electronically. It is not uncommon for the receipts to be processed and archived manually, and the data is recorded in simple tools such as Excel. In addition to the aforementioned workload, there is a major source of error lurking here, which may not be discovered until the next tax audit and can lead to additional payments and late payment penalties.
Specialized travel expense accounting service providers use modern management and accounting tools that automatically ensure operational and legal compliance in the work process. Travelers can process their application and billing via a portal, and receipts are digitally recorded and stored. This creates transparency, security and significantly reduces the cost per trip.
The travel expense accounting service providers prepare all receipts in a legally secure manner in such a way that they can be booked by the company’s accountants without any problems. The regulations on additional meal expenses and the provision of meals to employees are also applied correctly.
Of course, outsourcing also involves risks, because it means that the company hands over part of its personnel administration. This creates a dependency on third parties, which entail special requirements for data protection and confidentiality. Companies should define precise rules and responsibilities together with the external partner.
How much effort does your HR department have with travel expense reporting? Have you already thought about outsourcing to a specialized travel expense accounting service provider? We look forward to your comments!
Image source: Fotolia.com, Photographer: Kovalenko Inna
