How much time does your company spend managing business travel?
Corporate travel management doesn’t need to be a resource drain: Your company can manage business travel with flying colors with a savvy approach and the right tools.
Managing business travel expenses
Business travel is an important part of most businesses. In order to connect with the right stakeholders and form good relationships, it may require sending employees on business trips.
It is important to establish a business travel expense plan in the early days of your company. This will ensure that expenses will continue to be tracked even as your company grows.
What is corporate travel management?
At its core, managing corporate travel is about documenting a strategy that answers the question: How will your business derive value from something as expensive as travel?
Corporate travel management manages business travel — planning the trip, tracking the costs, and creating and updating the corporate travel policy while ensuring employees stay compliant.
How corporate travel management works
Negotiating prices, knowing how to find deals on flights and hotels, traveler safety and risk reduction, and expense data management — it’s all part of the strategic plan for successful travel.
However, coordinating business travel can get pretty complicated because many variables and people are involved, from the financial team approving reimbursements to managers accepting itineraries.
That’s why some businesses turn to an outside corporate travel management agency. Outsourcing lets you get the benefits of professional management, like costs, time savings, and policy enforcement, without having to draw upon in-house resources.
This approach is a good fit for companies that don’t regularly finance their employees going on business trips but need help following travel budgets and taking care of travel bookings.
Another option is to consider hiring from within and implementing travel management software. A dedicated travel management system can speed up planning and approvals while streamlining expense data management.
But even if your company designates someone from your administrative team to manage business travel planning, every corporate trip can be successful with the right tools and processes.
How corporate travel managers coordinate business travel
Corporate travel managers handle the entire framework, from creating an itinerary to ensuring business travel expenses are tracked for tax and accounting purposes.
However, planning a business trip and booking flights is just the beginning. There’s more to a corporate travel manager’s job – they’re part-travel agent and part-expense manager, with some HR and administrative responsibilities tacked on.
Here’s a glimpse of the job responsibilities for travel managers throughout the booking process.
Step #1: Create itineraries
A business travel manager will be responsible for taking this idea…
We need Beth and Bob to fly to Toledo to meet with Vanessa from Company X ASAP! Vanessa is a big deal at Company X, and we want to impress her, so Beth and Bob should take her to Restaurant Luxe for lunch. You know, the place with all the Michelin stars?
…and translating it into travel dates, flight times, hotel accommodations, an Uber allowance, and a table for three at Restaurant Luxe (with the best view, if possible).
Once they have an itinerary that works for Beth and Bob’s business trip, the approval process will begin.
Step #2: Handle the approval process
Before booking flights and putting the plan into action, someone needs to sign off on all the travel expenses. This person could be a team manager, someone from HR, or the finance team department.
Whoever is appointed will check that the numbers are in order and the expected costs are reasonable and within budget.
A business travel specialist might automatically send approval requests using a corporate travel management system. However, some specialists will use a manual process. Whatever system your company uses, you need to make sure it works for your business’s availability and travel demands.
Step #3: Book flights and accommodations
An experienced business travel manager has a process for booking overnight accommodation, flights, and other expenses.
This process might involve:
- Checking for the best deal on travel bookings websites
- Leveraging a network of travel agents, accommodation providers, and other contacts to negotiate lower prices
- Keeping an extensive record of all transactions for your expense reports
A good corporate travel manager will save your company money on travel expenses by finding the best deals and creating a great, manageable itinerary.
Step #4: Develop the business travel policy
A corporate travel policy outlines rules and expectations for employees. It covers issues such as acceptable spending limits, reimbursable expenses, safety best practices, and travel expense reporting procedures.
Here are some of the questions your company’s travel policy should answer:
- Does your company have a travel insurance policy that covers all employees? Or do your employees purchase travel insurance per trip, and then the company reimburses their costs?
- What are the spending caps for meals while traveling?
- How are expenses tracked? For example, should employees pay for expenses with a company credit card and save receipts?
- What miscellaneous expenses are covered, such as toll fees, parking fees, baggage, and work supplies?
- What safety rules should employees follow while on the trip?
By developing an ironclad business travel policy, your employees will know the reimbursement limits and the rules surrounding their company trip.
Step #5: Manage travel expenses
Your business has to track every travel expense for tax purposes. Known as T&E, business travel expenses are tax deductible if you can justify a company trip as beneficial to your business.
That means two things: First, employees can’t spend money on things that don’t somehow relate to the business.
Take our earlier example with Bob and Beth. After a lunch meeting with Vanessa, they spend the evening breaking out of one of Toledo’s escape rooms to de-stress. This is non-business related, so they would have to pay for it out of pocket.
Secondly, you need a record of every expense you’re going to tally as tax-deductible, whether it’s a paper receipt, a digital record of purchase, or a written ledger.
This is where a company card linked to your expense management system can make tracking expenses easier and more accurate.
You’ll still have a record of each transaction, even if your employees forget to save all their receipts. Also, your corporate travel manager will save time because they won’t need to input the data manually.
Four business travel and expense management challenges (and how to solve them)
Knowing what goes into the process is one thing – doing the job well is another.
Here’s the thing: Your travel specialist or management team can’t just go through the motions and expect things to go smoothly. There has to be an effort to root out inefficiencies and prevent problems. Otherwise, your business could run into some of the most common corporate travel management challenges.
And guess what? They’re expensive. So you’ll want to prevent them, if possible. Here are some of the problems you might encounter when scheduling business travel.
Challenge #1: Lost money from cancellations
Canceled flights, unused tickets, and abandoned trips are areas where your company can lose money if you don’t have the right policies in place.
Even if your business doesn’t employ a team of jet-setters that embark on frequent global business travel, you’re still at risk of cancellations from time to time.
The reality is that flights are being canceled more than ever, especially considering the recent pandemic and unexpected weather patterns. In fact, from January to July of 2022, the airlines canceled nearly 129,000 flights in the U.S., which was an 11% increase from 2019.
The industry says staffing shortages and air traffic control issues are to blame but don’t count on these problems going away anytime soon. It’s safer to assume this is the new normal in business travel and planning.
Here are some steps to avoid losing money from cancellations and disrupted travel plans:
- Schedule flights with long enough layovers, so your employees don’t miss their connecting flights
- Stay in contact with employees while they’re traveling so you can help them address delays and other problems quickly
- Have a Plan B in place if a flight is canceled
- Keep track of vouchers and refunds as a part of your business travel management process so that you can recover as much money as possible
A corporate travel manager who plans ahead of time will prevent your company from missing important meetings and wasting money on travel. With software, you’ll also see your expenses in real-time so your accounting team can better determine a healthy, allocated budget.
Challenge #2: Making sure employees are compliant
Your corporate travel specialist created a fantastic policy for your business – everything is in there, and there’s no stone left unturned in terms of compliance.
Remember, business travel deductions are permissible only if money is spent on certain items, like business-related travel, lodging, and meals. But how do you get your employees to read the policy, let alone remember all the details?
You can take a few proactive steps to empower your employees to stay within your company policy’s boundaries:
- Make your travel policy accessible online
- Consider sending email reminders to employees before they travel, highlighting the essential points to remember, such as travel insurance requirements and current safety best practices
By ensuring your employees comply with company policies, you will ensure every trip adheres to travel expectations, and you stay within the IRS’s framework of tax-deductible requirements.
Challenge #3: Wasting time on paperwork
When there are too many requests and approval needs, and all you have is someone from your admin team fielding everything, your company might be bogged down with unnecessary paperwork.
When managing corporate travel, you must diligently ensure every detail is addressed. Approvals for costs, chasing employees for receipts, and contacting travel agents to find better deals can pile up to create a lot of busy work.
Instead of letting travel management get out of control from a resource perspective, use tools to automate or simplify tasks, such as booking trips and tracking expenses.
For example, with software, your travel manager can get much more done faster, giving them more time to focus on reducing costs and improving policies. Travel software can handle all aspects without wasting valuable time on other tasks.
Challenge #4: Runaway travel costs
Travel is expensive, but it can get out of control if there are no limits on how much
employees can spend on expenses.
Create reasonable spending limits based on where an employee travels and ensure everyone is on the same page. For example, establish limits for taxi fares, parking, and meals. You can also create guidelines for daily spending limits and total trip spending limits.
Setting boundaries like these not only help control costs but also make things easier for employees because they know upfront what’s acceptable.
Why effective business travel management matters
With effective business travel management, your business can save money, save time, and get more out of business travel. Here’s how.
Benefit #1: Reduce costs associated with business travel
A dedicated travel manager or team — or an outsourced business travel management company — will know how to get the best prices on flights, hotels, and other costs, especially with the help of travel management software.
They can also negotiate lower prices for the vendors your business regularly uses, helping your company save even more money (thus improving cash flow, which is a win-win).
Benefit #2: Save time with streamlined processes
With a regularly updated travel policy and the right systems to help manage bookings, approvals, and expenses, your travel management team can handle everything in less time.
But more importantly, software and automation leave less room for human error.
For example, with expense management software, you know exactly how much every employee spends on every trip and when or where they spend it – meaning there’s no need to chase down employees for the information or manually enter it into a spreadsheet.
Best of all? Software can automatically plug numbers into your expense reports.
Benefit #3: Improve business travel for employees
Another advantage of successful travel management is the business trip experience. Employees will enjoy the experience more if it’s well-managed.
By booking hotels close to the airport, ensuring employees stay in a safe area of town, and optimizing the trip experience by choosing the providers employees prefer, your company’s business travelers will have less stress while on the road.
That means they can worry less about navigating the logistics of business travel, rest easy, and focus more on the presentation, business meeting, conference, or other reasons for their trip. Ensuring your employee is prepared and relaxed will give your business more bang for its buck.
Take control of your business travel expenses with BILL Spend and Expense
Manage business travel better with spend management software from BILL. You can set spending limits and manage all your travel expenses in one place. Request a demo today and ensure your business will never exceed your travel budget!
