Many employees incur out-of-pocket costs while on the job. When employers repay their workers for business-related expenses, they must consider internal policies and procedures to ensure the validity of reports.
T&E Meaning: What Are T&E Expenses?
For those asking, “what are T&E expenses?” T&E is an essential metric for small and growing businesses to track so they don’t risk overspending or find themselves in legal trouble.
Travel and expense (T&E) refer to how a company provides its staff with compensation for spending that occurred while staff members were on the job.
Which T&E Expenses Should Be Tracked?
T&E expenses give employers insight into where spending occurs. This insight allows them to track essential metrics. Examples of T&E expenses include but are not limited to:
- Other incidentals
Management of these T&E expenses gives small and growing businesses insight into employee operations.
Reasons Why You Should Take T&E Expense Reporting Seriously
T&E expenses represent a critical component of operations for businesses.
Organizations should use T&E expense reporting to ensure proper financial compliance, reduce costs, improve transparency across departments, and limit potential security breaches.
Maintaining legal compliance is especially important for small and growing businesses. This requirement makes it vital to establish policies and procedures for spending that clearly define what is and isn’t covered in T&E payments.
Tracking and enforcing employee compliance is essential for accurately assessing and paying taxes. According to IRS regulations, employees have 30 days to turn in expense reports.
T&E expense reporting provides decision-makers with a better understanding of where money is being spent. By tracking spending, decision-makers have a better grasp of what areas of the organization are functioning correctly and which are creating waste. This insight helps businesses save money.
Collaboration across different groups and professions can be complex due to the varied perspectives. Companies should take T&E expense reporting seriously because it helps bridge the divide between various departments and where money is being allocated. Businesses can keep organizational goals and objectives on track with T&E expense reporting.
Tracking internal spending among employees and across departments ensures that money is being spent correctly. Businesses can compare expenditures against one another to ensure reporting is valid. In an uncontrolled work environment, employees can easily mismanage funds or even lie about how and where money is spent unless spending is effectively tracked.
T&E Guidelines to Follow When Creating Reports
T&E expenses allow businesses to address employee spending. Because T&E reporting has a significant impact on operations, it’s essential to do it right.
Here are some guidelines when creating T&E reports:
Make Tracking Expenses Seamless
If it’s a hassle to do expense reporting, some employees will likely put it off or not be careful when tracking their spending. You should make it as easy as possible for employees to track their expenditures. This ease will promote timely and accurate reporting.
Use Digital Automation Tools
Manually tracking expense reports can be confusing and leads to more mistakes. If available, always use automated tools and platforms for expense reporting. This approach will offer a centralized hub for better management and tracking of employee activities.
Define a Clear Policy
When employees are confused about operations, more spending on wasted resources. Clearly defined policies will ensure your employees have a firm grasp of what they can and can’t spend money on and how to report it.
Confusing or opaque T&E guidelines make it difficult for employees to follow proper procedures. By raising awareness about best practices, you can ensure they understand how to use tools and software, making needed adjustments easier.
Rinse and Repeat
While it’s essential to have a firm policy in place, organizations should develop internal practices and shape them to fit their specific needs. If you want to grow your business, you’ll need to perform ongoing assessments and alterations to reporting processes to ensure the best results.
Where Do I Start?
Expense reporting can be complicated. T&E guidelines should first and foremost simplify the process of reporting with focused and articulated rules. Tools and automation are a good start for setting up a T&E reporting framework.
Building better frameworks for reporting T&E expenses will ensure comprehensive coverage of employee spending.
DATABASICS Understands T&E Expenses
DATABASICS is a unified time and expense reporting platform for tracking employee pay and spending. Rather than managing your workforce with separate services for travel and expense reporting, you can take advantage of Data Basic’s client-focused tools to meet the demands of your business without losing track of T&E.
Small business owners, new business owners, owners of fast-growing businesses, and people who work in accounting departments benefit from Data Basics’ best-in-class expense reporting and management software.
Eliminate errors, delays, and unnecessary spending with ease. DATABASICS offers flexible integrations with existing services to give you control over your T&E.
Find out how to keep track of your T&E with DATABASICS!