Expense advance requests: our 3 tips to manage them!

3 tips for managing travel expense advance requests.

Whether they are salespeople or trainers on the road to meet their customers and partners, engineers or project managers making a slightly longer trip for a one-off assignment; Some employees sometimes pay quite substantial upfront travel expenses. Of course, these expense items are reimbursed via the employee’s expense reports upon their return.

However, for many employees these advance payments can put them out of pocket, so the employee is able to ask for an advance for travel expenses. A travel expense advance request is simply a prepayment of an expense report by the company. Expense items are reimbursed to the employee before the expenses are incurred. An advance for travel expenses may be regular, where an estimated amount of the employee’s expenses is paid to the employee each month or at the beginning of the year. Or it can be one-off, where an advance is granted to an employee for a specific assignment.

Requests for travel expense advances are not easy to manage and remain a sensitive subject because they directly affect the company’s cash flow as well as that of the employee. Here are 3 tips to better manage your travel expense advance requests.

 

  1. Prioritize communication. Stay calm and above all see the positives

An advance expense request will often be perceived as a source of disharmony within the company. The employee believes that it is not up to them to pay substantial amounts even though they are for the benefit of the company in the course of their work, and the company no doubt also finds it difficult to trust the employee or isn’t comfortable with their ability to estimate the amount in advance. In all cases, it is all about communication and transparency between the employee, their manager and the company. Each of the parties must behave reasonably. It is up to the employee to make the most accurate assessment of their advance and it is up to the company to be understanding. Above all, all the advantages that this solution represents for both parties concerned should be explained.

For the employee, accepting a request for an expense advance enables them to plan their travel with greater peace of mind, fewer budgetary/administrative questions to be asked, often at the last minute, and therefore more time to spend on their work. Obtaining an advance on expenses is also empowering. It shows that the company has confidence in its employees and its willingness to ensure they have good travel conditions.

From a business perspective, requests for advances can be an effective way to streamline accounting processes and plan for expenses. In fact, granting an advance allows for better expense planning and allows the company to avoid urgent processing of large expense claims. There is also a psychological factor that will work in the company’s favor, an advance has been given to the employee and they will feel they have a maximum budget.

  1. Establish a policy for advance travel expenses

A company probably already has a defined policy for the reimbursement of business travel and expenses and adapted processes, so why not do the same for travel expense advance requests? Providing employees with a clear process for requesting an advance with a clear application form and sign off process will help the employee and the approver to manage these requests.

Besides, it grants the employee a sense of responsibility and reminds them of their obligations. The fact that an advance is granted does not exempt them from declaring expenses on their return and allows the company to reconcile the advance with the expenses incurred.

  1. Use a tool or a module integrated with your expense report management solution

We have already mentioned the fluidity and planning that good management of advance payments can bring, but it is still a time-consuming task for the accounting department. Indeed, once an advance is granted, it must later be reconciled with an expense account to justify the advance but also to manage any unused balance.

To facilitate these processes and automate them for both the finance department and the employee, it is advisable to use an advance management module linked to your expense claim management solution. This will make it possible to monitor the balance of advances in use.

Traveldoo offers this type of module integrated with its Traveldoo Expense solution to allow you to manage requests and reconciliation of travel advances either automatically or manually. Depending on your company’s configuration, Traveldoo’s Cash Advance module allows you to: submit a request for an expense advance, approve or refuse an expense advance or even modify the proposed amount, make payment of an advance and its accounting reconciliation, and manage partially used advances.

 

In conclusion, travel advance request management is, like the management of expense claims, a time-consuming task that is often put off. However, since this affects employees and their personal finance, it is important not to overlook these requests and to quickly provide a clear answer. To do this, we advise you to prioritize communication, set up a policy relating to expense advances in your company to clarify the company’s position, and finally to use a specific expense advance management tool coupled with your expense management tool to correctly manage your cash flow.

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