Faster Approval process can reduce up to 20% of total loss on T&E expenses of a company

Most of the business travelers, belong to SMEs or big corporate, follow the approval process before setting up for a business sojourn. The major objective of this approval process set by business organizations is to approve the requirement for the business T&E expenses of the employees by considering the compliance of the policies and budget with the request raised by the employees. This helps to avoid any kind of inconveniences at the time of reimbursement or final expense auditing and also ensures employees that the T&E expenses related to their business travels will be taken care by the organization. So, the approval for T&E is one of the basic necessities for the companies to control and manage T&E expenses where employees are traveling frequently for various business purposes.

When at one side approval process is acting as an expense savior to a company on the other side it may bring loss to the company. Three major types of revenue loss on T&E expenses because of approval process in a company are mentiond below.

Loss due to Late Approval: Most of the approvers of companies belong to middle or higher management level and sometimes they also need the approval of their higher authority. They have to check the compliance of policies with the fare, availability, budget etc. of the travel bookings requested by their subordinates and at the same time they have to perform their daily activities in the organization as well. Because of their busy schedules approvers take the help of travel admins of the company(or outsource travel agents) to check and verify the fare, availability etc. And in between, there is a high probability of increase of fare of airlines (If the time exceeds 20 minutes then there is a high chance of increase in airline fare) and other travel related services for which the request has been made. And because of this most of the bookings are done with a higher fare than the requested fare. This can be interpreted as Loss due to Late Approval.

Loss due to High Fare Chosen: This kind of loss occurs when the fare of air travel requested and approved is more than the lesser available fare for the same sector. More fare is chosen by considering the time factor and the comfort of traveler which cannot be ignored at that time. Or there may be situations where approver does not even know the availability of lower fare in the sector and approves the requested fare because of ignorance. It generally happens in the manual travel approval process.

Loss due to Cancellations: This is very common type of loss for corporate comes from T&E expenses. Sometimes approver approves the fare (non refundable/refundable airline fare) or T&E services requested by the employees. As the next step the bookings are done. But if because of any reason the trips get cancelled the bookings are also needed to be canceled.

It is very much difficult to control the last two losses as it depends mainly on various external circumstances which are not in the hands of approvers. But loss due to late approval can be minimized significantly as it can be controlled internally in a company by the approvers. Studies on approval profit and loss of various business entities of India have shown that around 15 to 20 percentages of the total loss on T&E expenses are the result of "Loss due to Late Approval". If travel approval can be processed quickly and bookings can be done within 20 minutes from the raising of requests for travel, then the loss can be minimized significantly up to 20% and even more.

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