Saturday, April 13, 2024

5 ways to control overspending your budget for business travel


If you’re a finance manager responsible for budgeting business travel expenses, you’ll know how difficult it is to keep track of travel costs while granting employees access to the best travel deals. 

The US spent a whopping $322.42 billion on business travel in 2021. As this figure will likely increase for the remainder of 2022, finance teams monitoring business travel budgets will need to be vigilant about overspend.

Familiarizing yourself with the primary sources of company overspend, helps you stay ahead of the curve, and budget for business travel.

Here are a few possible causes for your current overspend, and our top five ways to control your company’s corporate travel budget.

5 ways to control overspend on corporate travel

1. Use an all-in-one platform

When employees book business travel using different platforms and apps, managing travel budgets and keeping track of spending can feel as chaotic as an airport customs lineup.

As any experienced finance manager would know, logging into separate platforms to download individual invoices for reimbursement is tedious, difficult to track, and detrimental to expense management.

To simplify invoice collection and expense reporting, find a travel management company with an all-in-one platform, where you can book flights, accommodation, and transfers all in one place. Ideally, the platform shouldwill also be easy to use, offer ample support, and plenty of trip options. 

TravelPerk offers the best business travel management solution in the travel industry, even for small businesses. Our platform offers the largest inventory of flights on the market and helps you find the best prices.

2. Implement Real-Time Reporting

Travel overspend occurs when finance teams lack a clear overview of company spending trends. Without available real-time data, financial decisions are made retrospectively, rather than in the present moment. 

By having access to real-time data you’ll be able to spot teams consistently booking out of budget  – astronomical New York hotel rates, anyone? Or, where to adjust per diem credit card expenses allotted for domestic travel and international travel.

TravelPerk’s flexible real-time reporting helps you hone in on your business travel budget. Our real-time reporting breaks down company data by individual employee, transport type, booking type, and cancellation. It also allows your team to schedule reports within a predetermined time frame, and set alerts when it’s time to make data-driven decisions.

3. Communicate business travel policies

Informing employees of current approval processes for business travel spend, as well as expense reimbursement, is imperative for companies seeking proactive overspend solutions. It educates employees on corporate travel policy, and provides an opportunity for employers to review guidelines.

Start with a business meeting involving all necessary teams and departments, to address the following questions. This helps identify gaps in employee policy knowledge, and gain a broader scope of the current policy approval process:

Are employees aware of your current travel policy?If, so how is it communicated? How frequently is it communicated? Does your travel policy require updating?

Next, establish a clear schedule outlining the frequency you plan to communicate company travel policies to employees. Deciding what pertinent information to include at this stage also ensures you capture all necessary points in your messaging. For example, information on tax deductions, incidental expenses, and IRS related policies. 

Establishing a policy revision schedule during your discussion, also ensures consistent policy performance reviews throughout the calendar year. For example, perform revisions based on a predetermined time or event, such as a significant company size or structure change. Communicating policies that are company-wide or more granular, is also important.

Be clear about exceptions to corporate travel policies, as well. For example, are there certain instances where employees are allowed to go over budget? 

To achieve better policy compliance results, choose a booking tool that features customizable built-in policies, and provides you with a clear picture of policy parameters. With TravelPerk, policy parameters can be set for teams that travel more frequently, or for individuals with special allowances. You can also automate and set limits that enable employees to book trips within your policies, without requiring pre-approval. Alternatively, if their trip is out of policy, TravelPerk will flag it for review by your pre-selected approver.

Having employee travel policies in place is essential for meeting employees’ travel needs, and improving policy compliance. TravelPerk’s travel policy template helps you to get started. Our comprehensive template is entirely customizable, and designed to help set up your travel policies in minutes.

business travel

4. Plan ahead for business travel

Booking last-minute travel reservations leads to increased company spend ontowards the cost of business travel. While real-time data reveals employees booking last minute trips, planning ahead for cheaper fares is your safest bet.

Booking company trips to conferences, and retreats at the beginning of each calendar year, is one way to plan ahead, and stay within your travel budget. 

Offering employees travel perks, travel rewards, or upgrades for business trips, encourages them to book their business travel expenses in advance for cheaper air fares and hotel costs, too.

 5. Provide flexibility for canceled trips

Despite planning in advance, business travelers also require total flexibility when needing to cancel their business trip.

In a recent GlobalData survey, 52% of respondents reportedly felt concerned about international travel restrictions. Post-pandemic business travelers are seeking flexible options when faced with possible delays or cancellations resulting from these restrictions.

A travel program factoring flexibility and refundability into the total cost, grants peace of mind despite travel plans being subject to change. FlexiPerk allows employees to book airfare, hotel rooms, car rental, or ground transportation at any rate with any provider and cancel any part of the business trip up to two hours before you travel, and get a minimum of 80% of the trip cost refunded. 

Bottom line, make your business travel budget work for you by controlling company overspend. A business travel tool like TravelPerk, provides employees the freedom to self-book their travel, while offering customizable options to get your budget under control. For more information on how to get the most out of your corporate travel finances, download our eBook How to Optimize Your Travel Budget.

The post 5 ways to control overspending your budget for business travel appeared first on TravelPerk. For more on travel.


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