In spite of the growth in remote working and advances in online conferencing technology, business travel remains as valued in the corporate world as it has ever been. However, without strategic planning and budgeting, travel costs can quickly escalate, impacting the company’s bottom line. Mastering business travel budgeting is not just about cost-cutting; it’s about optimising spending, improving efficiency and maximising the return on investment from these trips.
We’re going to take a look at ways in which to unlock cost-effective travel budgeting, successfully manage expenses and maximise ROI.
Unlocking the Secrets to Effective Business Travel Budgeting
Creating a well-structured travel budget is the initial move towards cost control and optimising spending for business travel. A well-planned budget provides a roadmap for expected expenses, allowing companies to make strategic decisions about their travel plans and anticipate potential costs. Challenges arise in managing business travel, especially when it comes to handling substantial requests, monitoring approvals and adapting to changes in travel plans. It can be a complex task to handle effectively.
Fortunately, advancements in technology have led to the development of tools to aid travel managers with business travel budgeting. These tools enable management and staff to self-book while maintaining control over the budget, particularly when planning for a business meeting. You can even find flexible travel options, including car rental, and many systems allow for late cancellations, up to two hours before travel, without losing out.
Of course booking through online portals can only maximise efficiency up to a point and for more complex itineraries better value can be found through speaking directly with a specialist travel management agent. We broke this down in a previous post: Booking Through an Online Booking Tool vs a Live Agent.
The Anatomy of a Business Travel Budget
Business travel budgeting involves more than just tallying up projected expenses. It necessitates an understanding of past travel patterns, consideration of external factors and prioritisation of expenses.
This involves regulating spending, restricting travel time and class, determining methods of transport and factoring in indirect costs. This is why having a clearly defined corporate travel policy is so vital.
Allocating funds in a business travel budget requires:
1. Identifying the trip objectives
2. Estimating expenses such as airfare, accommodation, transportation, meals and incidental costs
3. Prioritising expenses based on the trip’s primary goals
4. Regularly adjusting the budget
5. Communicating corporate travel policies to maintain adherence to the budget
These steps play a crucial role in managing a business’ travel budget, and your finance team will appreciate your following company policy to get the very best bang for your buck.
Synchronising Business Objectives with Travel Spending
Aligning travel expenses with business objectives is a strategic move that can enhance return on investment. By adopting IT-enabled best practices and ensuring travel programs align with business goals, companies can control costs and maximise ROI from corporate travel, including face-to-face meetings.
Aligning travel expenses with business objectives can result in various benefits, including:
· Creating networking opportunities
· Aiding in sales deal closures
· Cost reduction through negotiated discounts
· Ensuring policy adherence
· Enabling employees to focus on their primary objectives while on business trips
Tools and Techniques for Keeping Track of Travel Costs
Efficient tracking of travel costs is a key aspect of successful business travel budgeting. Thanks to modern technology, businesses now have access to a variety of tools and techniques that can help monitor and manage travel expenses effectively. Typically, business travel solutions encompass:
· Online booking
· Expense tracking
· Policy compliance
· Travel budgeting
· Reporting
These tools aid employees in efficient trip booking, and help businesses stay on top of their travel expenses.
Companies can utilise corporate travel management systems and booking tools with integrated approval workflows to effectively monitor and manage travel expenses. Customisable policies in booking tools enable employees to book trips within existing company policies without needing pre-approval, thereby streamlining expense management while ensuring compliance.
Working with a travel management partner, businesses can also share specific policies and frameworks within which to adhere, dictating how best to meet all agreed goals so a specialist can ensure adherence. This can be a huge time saver, leveraging the expertise of the travel management company whilst keeping to company guidelines.
Crafting a Travel Policy That Saves Money and Time
Formulating a travel policy that encourages cost savings and efficiency, along with employee satisfaction, forms a crucial part of proficient business travel management. By incorporating strategic compliance measures in a corporate travel policy, companies can ensure employees’ comprehension and adherence to the established guidelines, leading to savings in both money and time, and fostering employee satisfaction.
User-friendly systems can significantly impact the enforcement of travel policies by:
· Simplifying the process of adhering to those policies
· Making it easier for employees to report expenses
· Increasing adoption of the policies through positive user experiences
· Ensuring clear communication of guidelines
· Enhancing the company’s ability to monitor and control compliance
Establishing Clear Guidelines for Employees Booking Travel
Making sure employees are aware of the company’s favoured suppliers, booking channels and spending limits is vital in managing corporate travel expenses. Clear booking guidelines help maintain consistency in budgeting and exercise control over costs.
Best practices for establishing travel booking guidelines include:
· Booking all travel through a centralised team
· Utilising a travel policy to guide employees to appropriate resources
· Implementing automated travel policies
· Maintaining an overarching policy that is both straightforward and thorough
· Allowing for some degree of flexibility
· Consistently revising the policy
Encouraging Compliance Through User-Friendly Systems
Adopting a user-friendly travel management system facilitates adherence to travel policies by employees and smoothens the booking process. Such systems provide:
· Simplified expense reporting mechanisms
· Increased adoption due to ease of use
· Clear and understandable presentation of the travel policy
· Improved administrative visibility and control
Integrating the travel policy into a business travel booking tool can bring about significant improvements in compliance by enabling automatic approvals for bookings within policy and facilitating better tracking of out-of-policy reservations to maintain control over the travel budget.
Implementing Approval Workflows to Prevent Overspending
Approval workflows are instrumental in managing travel expenses, because they can:
· Enforce adherence to company policies
· Manage trip expenses through pre-trip approvals
· Prevent non-compliant expenditures
· Help curb fraudulent expenses
· Expedite reimbursement processes
· Promote compliance with expense policies
To establish an efficient approval workflow for business travel, here are the steps you should follow:
1. Consult stakeholders
2. Agree an approval process
3. Manage all requests in one place
4. Set hard approval requirements
5. Encourage early bookings
6. Implement cost controls
7. Configure multiple approval levels
8. Define a travel policy
9. Determine when to use travel management software and when to go direct to your chosen travel management partner
10. Train staff
11. Continuously improve the workflow
Of course this is just an overview but hopefully gives you some idea on the most important considerations when it comes to managing a corporate travel budget.
Often there’s just no substitute for experience and expertise so if in doubt, get in touch with the specialists at Traveltrust who can advise you on travel budgeting management, whether you’re an enterprise level corporate client or an SME with growing travel demands.