Heads up, finance leaders. There’s a critical shift happening in the travel expense management world centered around nonemployee expenses.
For a long time, travel expense management mostly focused on traditional employees, like your salespeople, field techs and executives. But that left a glaring gap for nonemployees, including contractors, vendors, board members, job candidates, interns and employees’ family members.
Filling the gap
As of late, some providers in the software market noticed and began working to fill that gap. One prime example: In 2019, BTN’s Business Travel Innovator Award and its People’s Choice Award both went to business travel software Pana, which focuses on helping companies with nonemployee travel.
BTN shined a light on this type of solution because managing nonemployee travel is a growing challenge, especially for the finance teams handling trip details and expenses.
Now, to stay ahead, companies are looking to address nonemployee travel with newer software or other process changes.
Persistent pain points
Typically, companies have separate processes for employee and nonemployee expenses, explains BTN. And even if you have a great T&E process, nonemployee expenses can present unique challenges with communication, compliance and payment.
It’s a tricky niche because companies usually don’t have profiles or payment methods for many nonemployees, says The Company Dime. And trips booked outside the normal process can lead to inefficient spend and leakage with data and reporting.
What’s more, a company’s reputation may be on the line if a nonemployee has a poor travel experience. It could turn away a great candidate or tarnish a good vendor relationship.
That being said, some companies have workarounds in place to handle nonemployee expenses. But as nonemployee travel continues to grow and impact business reputations and bottom lines, companies want a more permanent fix.
Tackling nonemployee travel
With others involved in T&E (e.g., A/P, IT, travel coordinators), consider how you should address nonemployee travel. That may mean adding software, changing processes, etc.
Of course, your method will largely depend on how much nonemployee travel you manage. For example: Does your company bring on a lot of traveling contractors? Are you intern-heavy? Is HR scouting recruits who live far away?
Take a look at your company’s current numbers and future plans to help you weigh your options.