Travel and Expense Management 101
When managing corporate travel expenses, the goal isn’t just cutting costs, it’s about maximizing the value of every pound spent.
In this guide, we’ll explore how to optimize travel costs, improve compliance, and gain greater financial control over your travel and expense (T&E) programme. Travel is an investment, and with the right strategies, you can ensure it delivers measurable returns.
What is travel expense management?
Travel and expense management (T&E) is the process of controlling travel costs while making business travel more convenient and efficient for employees.
More than just tracking expenses, T&E management encompasses:
- Aligning corporate goals with business travel
- Designing and enforcing travel policies
- Tracking, analysing, and reporting expenses
- Building approval workflows for travel requests
- Ensuring traveller safety and satisfaction
- Measuring the return on travel-related investments
- Managing reimbursement processes efficiently
It also plays a key role in tax compliance, as documenting and processing eligible business expenses can help reduce tax liabilities, depending on your country’s regulations.
What are the types of travel expenses?
Now that we’ve covered the importance of travel expense management, let's explore the most common travel expenses categories that businesses of all sizes should encounter. By understanding these categories, you can identify how to claim tax relief and optimise your overall spending.
Transportation
In addition to airfare, transportation expenses include fares incurred while travelling to and from business-related events (i.e., shuttles, buses, trains, taxis, and ride-sharing services). Employees who hire or use their own car during business trips can also submit expense claims for mileage deductions based on standard mileage rates, which varies by country.
Accommodations
Any costs related to overnight lodging, such as hotel stays or alternative accommodations, are considered travel expenses. Of course, lodging costs do need to be within reason, or at least justifiable in case of an audit. So unless you’re accommodating for a company-wide retreat, don’t expect to be able to claim a 5-star resort stay!
Meals
The HMRC states that meals are a deductible travel expense when your employer requires you to travel away from your workplace for longer than 5 hours. For a full table of expense rates for travel outside of the UK, see this table.
Misc. Spending
While transportation, airfare, lodging, and food are the most common travel expenses, they’re far from the only ones. Be sure not to overlook these costs and more:
- Shipping and handling costs for luggage or work-related materials
- Electronics and other essential gear
- Parking fees
- Visa fees
- Laundry and dry-cleaning
- Business related communication (international calls, faxing, etc.)
- Tips on work-related services
How to manage travel costs effectively?
Ready to effectively manage your corporate travel spend? Well, you’re going to need a game plan and a whole lot of tools. Here’s our top tips for managing business travel costs:
Level the spending field
When it comes to creating travel spend guidelines, it’s best to apply the same rules across your entire workforce. When your travel spend policy is consistent at every level of your business, you help maintain transparency and avoid any potential misunderstandings that could lead to unintentional, but costly, out-of-policy travel bookings.
Plus, no one likes to feel like they’re getting the short end of the stick. If you give managers and high-level administrators significantly more spending allowance and flexibility on travel and expenses than other team members – especially when booking the same trip – be prepared for some pushback.
Drive compliance with a people-first policy
It's not uncommon for employees to veer from policy from time to time. But while some companies may be quick to wield the disciplinary stick, travel policy adherence doesn't have to be a battle. Instead, a more effective approach is often to identify the reasons behind traveller noncompliance and launch initiatives to foster a culture of support.
It might also be worth considering how you can adjust the policy itself to cater to their needs while still saving money.
By finding the right balance and working with your people, you can drive traveller compliance and provide travel spend management that is both cost-effective and employee-friendly. It's all about finding creative solutions that benefit everyone involved.
Real-time data for real-time results
Data is the beacon of light guiding organisations toward smart decision making – but to make it work, you’ll need the right technology.
By supporting your corporate travel management with expense management software, you unlock the insights hidden within your spending data. With just a few clicks, you can uncover trends in spend and identify what you're getting in return. Benchmarking and forecasting functions take it a step further, allowing you to identify potential savings and efficiencies.
Plus, by consolidating data from various platforms, you'll have a live view of your travel expenses, empowering you to make smarter financial decisions at the highest levels of your company’s future spend and travel preferences.
Let automation do the heavy lifting
With automation on your side, you can say goodbye to financial headaches and wasted hours spent on a manual expense reporting process, and welcome efficiency into your daily routines. By automating expense reporting with advanced technology solutions, you can safeguard your finances, detect programme leakage, and seize missed savings opportunities.
A cutting-edge custom dashboard like the FCM Platform seamlessly integrates compliance and expense information, giving you a comprehensive view of travel expenses and enabling your travelling employees toward informed decision-making. It's like having a personal assistant who always has your back, keeping your finances in check while you focus on the things that truly matter: your business.
Best practices for maximizing T&E efficiency
To truly optimize travel and expense management, companies should adopt these strategies:
- Centralize travel management: Integrate bookings, expense reporting, and approvals into a single system to improve accuracy and streamline workflows.
- Set clear, actionable policies: Communicate lodging, transportation, and per diem rules clearly. Policies should be realistic and enforceable, balancing cost control with employee experience.
- Measure and benchmark performance: Track KPIs such as policy compliance, average spend per trip, approval times, and ROI of travel investments. Use these insights to continuously refine policies and processes.
- Educate employees: Provide training on expense reporting, T&E policy compliance, and software usage to reduce errors and increase efficiency.
- Review and adjust regularly: Use real data to identify trends, cost-saving opportunities, and areas where policy or process updates are necessary.
Measuring success in travel and expense management
Key metrics allow organizations to quantify the effectiveness of their T&E program. These include policy compliance rates, average approval times, cost per trip, total savings from negotiated rates, and employee satisfaction scores. Tracking these metrics consistently enables companies to optimize both cost efficiency and traveler experience, turning travel from a cost center into a measurable source of business value.
Putting travel and expense management into action
Effective T&E management combines well-crafted policies, employee-focused implementation, and advanced technology. By integrating these elements, companies gain a clear view of spending, improve compliance, and identify opportunities for savings. Platforms like the FCM Platform provide all-in-one dashboards that consolidate travel and expense data, streamline approvals, and guide employees toward smarter travel decisions.
With the right approach, travel becomes more than a necessary expense — it becomes a tool for driving efficiency, compliance, and ROI. FCM’s experience in helping organizations optimize T&E ensures that companies can implement strategies that deliver measurable results while maintaining employee satisfaction.
Now put it to action
The secret’s out on efficient travel and expense management. A well-written travel policy coupled with all-in-one, proprietary technology is the key you need for a cost-effective, people-first travel management programme.
But easier said than done, right?
Don’t stress just yet. FCM is here to help – and lucky for you, we’ve done this before. A lot.
Let's Talk!
Frequently asked questions
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What is travel and expense management?
Travel and expense management (T&E) is the process of overseeing corporate travel and employee expenses to improve compliance, optimize spend, and enhance financial visibility.
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Why is travel and expense management important for businesses?
It allows companies to control costs, enforce policies, improve traveler satisfaction, and measure the ROI of business trips.
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How can companies reduce corporate travel costs?
By implementing consistent travel policies, using centralized expense tracking, analyzing spending data, negotiating rates with suppliers, and leveraging automated expense management tools.
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What are the most common types of travel expenses?
Transportation, accommodations, meals, and miscellaneous costs such as visas, shipping, parking, communication, and tips for work-related services.
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What tools help automate expense reporting?
Platforms like the FCM Platform integrate travel bookings, expense approvals, and reporting into a single system, streamlining processes and providing actionable insights.
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How can organizations ensure compliance with travel policies?
Through clear, realistic policies, employee training, regular monitoring, and data-driven adjustments to address non-compliance patterns.
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What metrics should companies track for T&E success?
Policy compliance rate, average approval time, cost per trip, savings from negotiated rates, employee satisfaction, and ROI on travel investments.
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How can automation improve T&E management?
Automation reduces manual errors, speeds up approvals, ensures accurate reporting, detects program leakage, and highlights opportunities for savings.
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Are meals and accommodations tax-deductible?
Eligibility depends on local regulations. For example, in the UK, meals are deductible if employees travel away from their primary workplace for more than five hours. Proper documentation is essential.
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How can data improve travel spending decisions?
Real-time data allows finance teams to identify trends, forecast future spend, and make evidence-based decisions to optimize cost efficiency and travel ROI.
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What are some best practices for corporate travel expense management?
Centralize travel and expense processes, enforce clear policies, train employees, measure key metrics, and continuously refine workflows based on insights.