How to Streamline Employee Expense Management in the Hospitality Industry
Managing employee expenses… When has this not been complicated? Especially in the hospitality industry, where constant travel and events make it even trickier.
But if you want to keep both your employees happy and finances in check, you need to stay on top of managing employee expenses. This is exactly why businesses are looking to streamline the process, causing the expense management software market size to potentially grow from $6.62 billion in 2024 to $7.49 billion in 2025, and reach $12.22 billion in 2029.
Are you looking to do the same? Keep reading to find out how!
Why Managing Employee Expenses Is Important
It’s simple. Employee expenses are just another expense among the many (supplies, utilities, maintenance, etc.) you have to deal with in the hospitality industry. It can be a delicate balance between staying within your budget and avoiding any employee issues caused by any payroll errors or rejected claims.
That said, managing employee expenses is important because it helps you:
- Control Costs: It’s easy to stay within budget and spot areas for potential savings when you know where your money is going at all times. Tracking employee expenses helps you control costs, that is, providing everything necessary without overspending.
- Spot Wrong Claims: If you’re not keeping track of employee expenses, then it can be easy to get taken advantage of by your employees. They might accidentally or intentionally submit an expense that you have already reimbursed or an expense that they didn’t pay for.
- Staying Compliant: Yes, you also must stay compliant with tax laws and regulations. As if tracking, approving, and reimbursing expense claims wasn’t enough. Having a solid employee expense management system in place will make sure that you stay on the right side of the law, meaning you can avoid penalties and additional expenses.
- Keep Employees Happy: The last thing you want is failing to reimburse your employees on time, or worse, failing to reimburse them at all. This can quickly lead to frustration, ultimately impacting your business performance. After all, happy employees are more productive — so managing expenses well is essential.
Saying it is one thing, but putting it into practice is another challenge. In the next section, we’ll walk you through the exact steps to build a strong employee expense management system in the hospitality industry.
How to Simplify Employee Expense Management
It's not that businesses ignore employee expense management — it’s that many still struggle to do it efficiently. They're used to employees submitting receipts via paper or email, leaving finance teams to review and approve each one manually.
Tip: Expense management requires strong analytical and organizational skills. If employees are looking to step into finance-related roles, resume builders can help them articulate their experience with expense tracking, policy compliance, and reporting — making it easier for managers to assess their suitability.
Use Expense Management Software
As mentioned earlier, expense management software can significantly reduce the time spent reviewing employee-submitted claims. For example, sites like TravelPerk can help you find affordable accommodations for your employees’ business trips and make it easy for your team to submit travel expenses, such as for meals, on the go.
What else can expense management software do?
- Track Expenses Easily: The best thing about using expense management software is that no one will have to process anything manually. Employees can submit the claim simply by taking a picture of it while the software sends the claims to the finance team organized and categorized. It even checks whether they comply with company policies.
- Catch Mistakes or Fraud: These software rely on AI-powered insights. This is how they can recognize a potentially fraudulent expense claim and bring it to your attention. For example, if an employee tries to submit a claim that’s already stored in the system, you’ll be notified and can immediately review it. This minimizes the chance of financial losses.
- Simplify Reporting and Taxes: Considering that the software organizes expenses into easy-to-read reports, you’ll have no hard time staying compliant with tax regulations.
If you want to lighten the load for your employees even more, you can completely automate approvals and reimbursements. How? The software can automatically send expense claims to the right approver based on company policy. Once approved, it processes the reimbursement for the employee.
When you have all employee expenses in one place, it’s easier to stay on top of your finances. You’ll know exactly how much money you’re spending on each type of expense, making it easier to stay within budget.
Implement a Small Business Telephone System
It’s important to note that even with clear expense guidelines in place, employees might still have expense-related questions that may need a quick response. For example, they might need to book a last-minute flight or hotel or buy a gift for a client to maintain the relationship — and they’ll need to know if the company will reimburse those expenses.
Yes, we’re all aware of Teams and Slack, but telephone systems aren’t dead, and are still a great way of reaching out to someone fast. And no, you don’t have to invest in an enterprise phone system, as small business telephone systems can work just as well, especially when it comes to small businesses that don’t have the means to invest in large-scale systems.
When a system like this is in place, you won’t have to worry about an expense question going unanswered. You’ll make sure that you and your employees are always on the same page.
Set Simple Rules
Yes, employees might make mistakes when submitting claims, but with clear expense rules in place, the chances of errors or fraudulent claims drop significantly. For example, a rule could be that employees can only book flights on economy or they can’t spend more than $50 on meals per day when traveling. This can work for any overtime claims as well.
Besides the time spent on filling out expense reports, respondents in a survey about the use of expense management software reported that helping users understand and follow the expense process was one of the top three expense management challenges.
This is why you need clear and simple guidelines that will help your employees understand what they can and can’t spend company money on, as well as how much they can spend on what.
Making Employee Expense Management Easier in the Hospitality Industry
Dealing with employee expenses isn’t easy. Not only are finance teams supposed to track, approve, and reimburse expenses, but they also have to make sure that all claims are within the company’s policies and budget. Additionally, there’s always the risk of employees accidentally or intentionally submitting an expense they haven’t even paid for.
But by implementing the right tools that can automate such processes and clear and simple guidelines that employees can easily follow, you can streamline employee expense management.
No more overlooked expenses, no more overspending, and no more frustrated employees. This ensures that at least one major cost in the hospitality industry is well-managed.
Heading 1
Heading 2
Heading 3
Heading 4
Heading 5
Heading 6
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Block quote
Ordered list
- Item 1
- Item 2
- Item 3
Unordered list
- Item A
- Item B
- Item C
Text link
Bold text
Emphasis
Superscript
Subscript
