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Corporate Travel Management – 3 Min Read

Conventional corporate travel is a highly service-oriented industry that faces multiple financial challenges. With global restrictions on personal and business travel gradually starting to relax, forecasts suggest that worldwide business travel expenditure could reach USD$1472 trillion by 2026. 

Setting up a proper budget for business travel can be challenging, as these trips involve multiple components and often need to meet certain criteria. A good budget needs to be realistic and include all costs while ensuring the best value.

We believe this is the ideal time for CFOs to prepare and position their organizations for the future of business travel that demands more than dated conventional solutions. 

Currently, outdated practices and procedures are causing businesses to fail to achieve travel cost optimization resulting in inflated budgets and reduced travel productivity. 

This article aims to shed light on the best practices CFOs can follow to plan productive and cost-effective budgets for corporate travel that fulfill the business and travelers’ needs.

Setting up a corporate travel budget

The extent of the financial ramifications facing companies that follow conventional travel planning remains unknown. Businesses must understand that simple practices can help reduce corporate travel’s financial burden. 

To help create an ideal travel budget with reduced friction, we have prepared five simple guidelines to follow. 

1. Determine a realistic budget for your business

Before assigning a travel budget, companies must check other core competencies’ budgetary requirements for what’s needed to maintain ongoing operations. Only after doing this should funds be allocated to the travel budget that doesn’t affect the company from an operational standpoint. 

This practice ensures you understand what your business can afford for the travel plan without hindering other competencies.

Analyzing historical travel data from past business trips is a great way to approximate what the journey may cost. 

To get an approximate estimation, check average stay durations and costs associated with transportation, airfares, per diems, visas, and insurance with prior business travels. This data gives a baseline on what an average business trip has cost the company in the past to help devise upcoming trip budgets. 

Based on the average estimation, you can plan the budgets for the forthcoming trips budgeting appropriately. However, you must not assign the computed averages as a standard budget for all upcoming travel plans. 

Instead, a more realistic approach is altering the guideline based on the travel destination, current market conditions, inflation, and prior trip feedback from travelers for a more realistic budget. 

For instance, past feedback may indicate that the traveler wasn’t assigned enough funds for specific travel cost centers like per diems, which hindered them from accomplishing travel goals. An excellent way to devise optimal budgets is establishing early clear-cut goals for travelers and what resources they may require during their travel duration to achieve them successfully. 

The above considerations enable CFOs, and managers to plan budgets that can be productive and cost-effective for all stakeholders. 

Now that you have covered your bases, you can begin to devise a realistic travel budget. 

2. Take seasonal factors and external forces into account

Following step one may get you an approximation of what your travel might cost, but it does not factor in seasonal or external factors that may inflate the budget. 

For instance, planning travel during holiday seasons such as Christmas can be expensive due to the surge in prices across the board, from tickets to accommodation. 

Although this may not always be possible, avoiding travel during seasonal times can help prevent needlessly expensive trips. 

Some more unpredictable factors include instances where special events are being held in the proposed destination, creating a significant demand for tickets and accommodation. Situations like this can also increase travel prices where a higher budget allotment may be necessary. 

3. Find opportunities to reduce expenses.

One of the fundamental responsibilities of travel planning for a CFO or a travel manager is to strike a balance between economic feasibility and trip productivity. Achieving economic feasibility requires leaders to reduce trip expenditure where possible to attain a justifiable ROI. 

Here are some tips we believe can be helpful for businesses to reduce their travel expenses:

• Avoiding last-minute bookings

Undeniably, an excellent practice that businesses must follow is making travel bookings as early as possible to avoid inflated costs. 

In most cases, even bookings made on seasonal dates can be relatively cheaper when making the bookings months in advance. 

This practice also eliminates last-minute bookings’ stress and complexities, allowing businesses and traveling teams to focus more on the trip’s primary goals.

• Choosing flexible options for transport and accommodation

Sometimes, the cheapest options for transportation and accommodation are inflexible and non-refundable. 

However, even if these tickets are the most affordable option, avoiding them is advisable unless you have the utmost confidence that the travel will occur on the proposed dates. 

The problem is that travel plans are often unpredictable, where unexpected delays, cancellations, or location changes are part and parcel of corporate travel. When an unfortunate situation arises where the trip must be postponed or canceled, making date changes or receiving a refund for the bookings will not be possible. 

These instances often result in the business incurring losses while placing an additional requirement to repurchase new bookings at exorbitant last-minute rates. 

Instead, a viable option is for you to spend a little bit more to secure flexible travel and stay options that support plan changes or cancellations with minimal charges to the company. 

Remember, you may spend a little bit more, but the peace of mind and travel flexibility you gain is invaluable.

• Prioritizing public transportation

Corporate cabs, rentals, and other forms of transportation are expensive cost centers to trip budgets. Alternatively, encouraging your employees to rely less on corporate cabs and more on public transport can be an easy way to cut costs and reduce the travel budget. 

4. Establish a travel policy

Businesses with frequent corporate travel requirements must understand the immense value that a robust travel policy provides. 

An official travel policy can establish guidelines and limitations on travel expenditure while streamlining the approval process. 

When all stakeholders know all the dos and don’ts of the travel policy, they are more likely to stay within the confines of the company guidelines. When employees comply with the travel policy, it is easier to validate and process reimbursements quicker.

5. Make your budget flexible

Maximizing the productivity of your corporate trip sometimes requires a flexible travel budget. 

A budget approximation can only give you a speculative idea of travel costs. The main shortcoming of these baselines is that they don’t factor in unexpected circumstances and unavoidable costs. 

For instance, a flexible budget helps accommodate situations like when the employee incurs unanticipated costs that exceed their allocated funds or if they need a trip extension due to inevitable circumstances. 

A flexible budget can allow the traveler to secure real-time approvals to pay for unforeseen costs or adaptively extend the trip. 

A genuinely flexible budget requires real-time visibility into all travel expenditures that conventional travel management processes do not have. It could be worth exploring a travel expenditure management solution that empowers you to create adaptable budgets through a trustless system between travelers and management. 

How to control overspending your business travel budget

Businesses that place travel budget optimization on the backburner tend to overspend. Here are some tips on how to manage travel expenses and avoid overspending.

1. Plan ahead

Airline tickets and travel accommodations are two major cost centers of travel that are subject to frequent price surges. As one nears the travel date, the demand and costs for these aspects tend to increase significantly. 

The best practice to avoid paying high prices is to plan your trips and make the necessary bookings well in advance. 

For instance, unavoidable work events can be booked in advance with flexible tickets and accommodation at the beginning of every year, achieving substantial cost-cutting. Another good practice is offering employees rewards, perks, and potential upgrades, incentivizing them for any clever means they employ to reduce the overall travel cost. 

These incentives motivate employees to go out of their way to plan and make bookings in advance and save money for the company.

2. Use an all-in-one platform

The undeniable reality is that corporate travel is a messy process with unnecessary delays and redundancies that causes needlessly inflated travel budgets. 

Often businesses spend more than they should on travel bookings because of the lack of transparency in the corporate travel processes. With a lack of automation, this outdated system requires considerable back-and-forth communications between travelers, travel desk, admins, managers, and C-suites at every stage of the travel booking process. 

Similarly, another problematic aspect of corporate travel is scouring multiple vendors to find the cheapest airfares and hotel rooms. 

Sometimes, securing the most wallet-friendly option may require bookings with numerous vendors. Tracking and managing these expenses becomes even more complicated when dealing with multiple vendors due to a lack of visibility. 

When the time for post-facto reconciliation arrives, it becomes a tedious task to collect invoices from all vendors for reconciliation. 

Instead, a better solution is to invest in an all-in-one platform like Tripeur that brings robust travel management and expense management tools into one place. Through our platform, stakeholders can browse all travel options through a user-friendly UI and instantly get a clear picture of the lowest prices available across all vendors. 

Once the traveler makes a travel-related selection from our platform’s wide range of options, it is sent directly to managers and other stakeholders on their mobile devices through mediums such as WhatsApp for swift approvals. 

Most importantly, the expense management functionality provided by our platform allows for complete visibility of all travel-based expenses, such as tickets, accommodations, and per diems, on a real-time basis. 

Our platform offers complete T&E visibility to help you speed up post-facto trip reconciliation and reimbursements. 

An all-in-one platform may be just what your business needs to enhance all phases of the corporate travel experience for all stakeholders. 

3. Educate employees on the travel policy

Your travel policy is only effective if all organizational stakeholders actively follow it. To make this happen, you must first create awareness and educate employees on all the facets of the travel policy. 

It is paramount that travelers are always aware of what is covered and what is not by the company’s travel policy. This knowledge ensures that employees always adhere to the company’s T&E guidelines. 

Businesses must communicate to all stakeholders any changes, such as adding or amending travel policies. 

A lack of transparency in the travel policy is a problem that could lead to non-compliance. Consider increasing policy transparency by adapting to a travel management platform over complex and outdated conventional travel solutions. 

These platforms can easily automate travel bookings while maintaining absolute policy compliance.

4. Expect trip cancellations and provide flexibility

Corporate trip cancellations have become common due to the unpredictability caused by the ongoing pandemic. Flexibility in travel-related bookings allows companies to cope better with unexpected cancellations. 

Staying prepared will enable enterprises to reschedule or request refunds without significant financial setbacks. 

An excellent way to cut losses caused by trip cancellations is to form partnerships with leading airlines and hotels to permit last-minute rescheduling or cancellation with a lessened economic pitfall.

Enforce business travel budgets with Tripeur

Corporate travel is a heavy approval-based process that requires formal requests between managers, travel admins, and ticketing agents before tickets, accommodations, and other aspects can be issued. Corporate travel management solutions can reduce the amount of money spent on employee trips by helping companies efficiently manage their travel resources. Using these solutions, businesses can create streamlined processes for booking.

Typically the average transaction volume of corporate travel is very high, with roughly four hundred transactions per trip. 

Here, due to a lack of real-time transparency, one doesn’t know the amount spent until the end of the month until all vendors submit invoices and reports. 

Post-trip completion, the financial department must put all the expenditure reports and invoices together. After consolidation, the respective managers receive the bills for formal approval. 

Typically with the current state of conventional corporate travel, management has little to no knowledge of whether the expenses comply with the travel policy. All relevant documents and formal requests are shared back and forth between the stakeholders through email, significantly slowing down the process. 

In such instances, the manager goes ahead and approves without an idea as to the legitimacy of the expenses. These post-facto redundancies make it exceedingly difficult for businesses to curb costs and enforce a feasible budget. 

On the other hand, Tripeur’s travel management platform removes all conventional corporate travel process redundancies. 

Let us assume you allocate five lakhs as a travel budget on our platform. Our expense management system allows you to monitor in real-time how much and the purpose behind every travel expenditure from the allocated five lakhs. 

You can instruct Tripeur’s platform to control the budget by capping all expenses past five lakhs by setting an expense limit. The main highlight of our system is that it will help you enforce a fully controllable budget that you cannot do with conventional expense management. 

Tripeur’s system allows all travel-based ticketing to be done within a single platform eliminating the messy need for dealing through multiple vendors. 

When an employee requests a trip, Tripeur captures the full scope of the potential costs to the company. When the manager receives approval requests, the full extent of the expenditure’s compliance against the approved budget is visible to all stakeholders. 

Thus all stakeholders in the workflow have real-time awareness of all travel choices and the impact the associated costs have on the overall budget. This visibility makes it easier for businesses to set flexible budgets with complete oversight and control. 

That is how Tripeur completely revolutionizes how novel travel budgets are enforced with real-time control and visibility, differentiating us from all other travel management solutions currently available in the country. Contact us to find out more.