The Perfect Way To Manage Corporate Travel & Employee Expenses
Corporate Travel and Expense (T&E) is a hot topic in the FinTech world, as companies are looking to solve problems associated with expense reports, employee spending, and reimbursement. According to a blog post by the New York Business Journal, 10 percent or more of a company’s budget is related to employee travel expenses. Proper management of these expenses can give businesses a huge advantage, but improper management of corporate expenses can prove to be crippling.
Employee expenses can be difficult to track, and this can lead to problems, both for employees and employers. Employees need to be able to efficiently and securely use funds to pay for expenses while travelling, and employers need to know that they aren’t being taken advantage of.
The traditional method of employees using personal funds while on a business trip and then expensing the purchases afterwards is incredibly inefficient, and yet it remains a common practice throughout the business world. More than one-third of employees surveyed in the U.K. said they use their own money to pay for work-related expenses at least once a month. A third of the employees that were surveyed said they faced cash-flow issues as a result of work-related expenses, and close to 40 percent said that they often have to wait at least two weeks to recuperate their funds. Nearly 50 percent of workers said these cash-flow problems and expense report deadlines cause them stress.
But this kind of financial mismanagement has more far-reaching consequences than just employee bank accounts; expense management and reimbursement also has a significant impact on employee morale and productivity. 41 percent of employees said they would not incur a business expense if it took a long time to get reimbursed. 43 percent of employees would stop meeting with current or potential customers if the same problems kept coming up.
According to Aberdeen Group senior analyst Christopher Dwyer, approximately 60 to 70 percent of companies are seeking new ways to manage travel and corporate expense. So what is the answer?
One solution is to get rid of expense reports altogether, and use technology to handle payments, tracking, security, and financial management when employees are travelling. This is where prepaid programs shine.
A prepaid program can be customized specifically for the purpose of managing employee expenses. Prepaid cards allow companies to preload funds in advance, giving them control over spending and budgeting. The cards can be used anywhere Visa® or Mastercard® is accepted; however, parameters can be set up to restrict where funds can be spent. Similar to debit cards, the cardholder can only spend the amount that is loaded on the card. There’s no overdraft, and there’s no credit; however, cards can be easily reloaded if unforeseen expenses occur.
Prepaid cards eliminate any undue financial burden from being placed on employees who might have difficulty covering their expenses with their own funds or credit cards. Thanks to zero liability protection, purchases and funds are protected. And, with real-time tracking, employees don’t have to worry about submitting receipts on their expense reports. Real-time reporting and a robust back-end provide the company with important information, which can give them a better idea of future budgeting and expenses. It’s a win-win all around.
Interested in integrating a prepaid payment program into your business to help with corporate travel and employee expenses? Contact us now to find out how we can help.
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