Benefits of business travel for corporate companies
A fully sponsored trip with potential opportunities to network with new people will sound exciting for any employee. Even if business travel is another means of working away from the office, it’s still enjoyable.
But how do these benefits of business travel matter to a business? Do they really like sending their employees on trips, or do they consider it a waste of money?
Frankly, many businesses don’t see this as an opportunity but as an additional expense. And in the times of Zoom and online meetings, business trips are on the verge of their downfall.
If technology is ready to bridge the gap, why should companies invest in this and let employees clock in from anywhere? Let’s find out!
Business travel differs from one group of employees to another. The major process involved is transportation. The employee must take a cab if it’s an inter-city meeting or a flight if it’s across cities or the country.
If the stay is going to be longer, the traveling employee will need a place to stay. Hence, a hotel reservation must be made before the trip, confirming the duration and room rent.
Travel expenses will also include cab fares for the trips between the airport and the hotel or hotel to the venue. Some businesses sponsor the coffee and lunches they have while on travel.
Once the employee has fulfilled the purpose of the visit, they will check out and fly back to their own destination.
In layman's terms, business travel is mostly for meeting prospects or potential stakeholders to discuss things in person. Or it can be just visiting another branch, warehouse, or inventory of the company or attending a business conference.
The purpose of the travel can differ, but the itinerary will be more or less similar to what’s shared above.
Business travel benefits both employees and employers in some ways. Though it’s your employees who travel, they carry your company name as their identity. Hence, the benefits are mutual always.
One of the main benefits of business travel is that it opens up a whole new world of opportunities where one gets to meet and network with people from all walks of life. Employees with good interpersonal skills can form strong connections when such instances happen.
This extended network of theirs will benefit not only them but also the company they represent.
The people they meet there can be potential clients, investors, reliable suppliers, or someone with a goldmine of contacts and recommendations.
If an employee takes up a branch visit, they can also meet other employees, interact with them, and strengthen their cross-departmental bonding.
It pays the way to clear communication issues that have existed so far due to online or telephonic talks. Both parties get the necessary information and coaching they need about the other team.
Bumping into clients in unusual circumstances is quite a surprising one. If your employee is a smooth talker, they can get the prospect interested in your product without even pitching.
This is very different from leads that come through generic channels. And it has a high potential to get converted into an active buyer.
It’s the most organic way to promote your business and receive contacts of leads. By developing a great travel culture where employees travel in a stress-free manner, they can be indirect propagators of your business.
For basic communication and information exchange, online calls and emails will work. For stuff beyond that, in-person meetings serve more value. Face-to-face meetings are effective as you can both see and listen.
You can weigh their body language and see if they are really interested in what you are offering. What happens after a series of meetings and email follow-ups can actually be wrapped up in one face-to-face meeting.
You will be standing out from the crowd as most of your competitors stick with safe options like online meetups. If you compare a face-to-face meeting with an online chat, the former has a 35% higher success rate than the latter.
Traveling and working from new locations has a lot to offer from a learning point of view. The employee is exposed to newer environments and work culture and gets to bring that back to your office.
It can be a breath of fresh air for those around them as they learn from these experiences. Without spending much, your employees will gain new skills and knowledge that can aid their work life and career advancement.
By sending the young talents of your company on business trips, you boost their leadership and decision-making skills by observing how others do it.
Certain expenses of businesses qualify for tax write-offs or deductions. Travel expenses are one among them in many parts of the world. Travel expenses that are fully related to your business qualify for tax deductions.
In Singapore, businesses can avail of up to 50% tax exemption on travel tickets, meals, and hotel charges. In India, all travel-related expenses except foreign trips are eligible for tax exemptions.
Tax write-offs are one of the primary benefits of business travel that makes many businesses consider these expenses to be allowable.
Business travel is an added perk for employees who want to engage with influential professionals and climb up the corporate ladder.
They get to travel to different locations, solve major business problems, and become part of high-profile projects.
They are introduced to other dimensions and elements of the company and contribute more than what their job profile warrants.
Online discussions and meetings can make this happen too, but not in an effective way like this.
Business travel expenses are mostly carried out through corporate credit cards.
These cards have points or offers for every ticket that’s booked using that. Both corporate and personal cards have many offers and points that get added to the account and used next time.
Even if the employee uses their personal funds to book tickets and receive reimbursement later, the perks are still applicable. Instead of reimbursing the entire spending account, your finance team will have a reduced spend value.
Following the same routine for the long term only leads to the burnout stage. This is when your employees stop being productive and see a dip in their performance. That affects your business too.
Taking a break from their regular work style and traveling to other locations help busy employees let off some steam. In a hectic work life, travel and vacation are not given much importance.
If it’s not for a lengthy vacation, you can help your employees travel frequently for business purposes. This is how you can do your part to make sure your employees are physically and mentally fit.
The benefits of business travel are many. But it’s not always rosy. There are many teams involved in the business trip of one employee. And it’s too much to process with high accuracy.
Some challenges businesses face are,
Reimbursement is how employees get the money back from their company that they spent while traveling. Not all costs can be covered, but those related closely to the business.
They go through multiple steps to complete this process. Employees are supposed to carry receipts and submit them for verification.
It’s the limitations of the reimbursement process that makes it hard for employees to follow every time they come back from a business trip.
If they lose a receipt or bank charges slip, they have no other way to justify the expense. This is why an automated reimbursement system with a mobile application must be implemented.
You create an expense category and assign a budget. And suddenly it becomes too unaffordable. Compared to other costs, travel costs can quickly get out of hand as the spending is always external.
It is challenging to keep this under control or set the price at a more grounded state. As there is no real-time measurement happening, tracking these expenses is of zero help.
Whatever values you have in your expense reports are shared by your employee. And the actual cost of their trip could be lower than what they reported too.
Hence, adjusting the policies or keeping the costs under control sounds too challenging for the finance team and they just lose it in the end.
It’s a rule of thumb to consider all billable travel expenses before designing the expense policy. The travel policy is what guides employees on what kind of expenses are allowed for reimbursements and what not.
Also, you can’t use the same policy for years. The price rise and changes in the way employees travel must be taken into account. The same policy will not work for two different professionals with unique travel needs.
That has to be customized depending on their needs too. Above all, fairness is required to be maintained on both ends.
Employees must be clearly informed about what they spend on and how much. Lack of communication is what irks them most and makes them hate policies.
Having a travel policy is mandatory to regulate spending made by employees. Having them in papers is okay.
But finance teams strive hard to apply that to every expense and enforce it strictly. Travel policies without any automated system are futile. It takes manual effort to detect and reject expenses that don’t fit under the travel policy.
Finance teams will have to spread awareness among employees to not encourage such expenditures. More often than not, your employees will be spending over what has been set as the spending limit.
Finance teams cannot approve more than what’s allowed. The difference in the amounts will be incurred by the employee whether or not they like it.
There is always that one employee who likes to play around and exploit the privileges offered. They use fake proof or add a few numbers to the actual amount to gain more than what’s spent.
Not paying heed and approving these only bring loss to the company. Yes, violations happen when there is no clear understanding of policies. But it also happens with the negative intention of stealing the company’s money.
If not caught, they make this a habit and keep indulging in more expense frauds. Among all small business frauds, 21% alone accounts for fraudulent expense claims.
Expense report is submitted by one person from the operations or marketing department. But that’s approved and processed by the finance and accounting team.
The team leader, manager, or HR will also be involved in primary approval processes. Some teams have booking managers who do the booking themselves and share the ticket.
In any case, it involves too many people in one instance. For a startup that’s managed remotely, this will be a nightmare.
Every team will have its own portals or spreadsheets that others cannot access. So they either look at stand-alone systems with outdated data or rely on others for cues to proceed next.
This only leads to delays, inefficiencies, and broken communication. When something goes wrong, each one blames the other rather than being accountable.
You know the benefits of business travel now and also the challenges that will be brought to you. What is the solution then to manage a travel expense management app that magically keeps everyone on the same page?
You are in the right place. Volopay is an all-in-one corporate travel expense management platform. It has the most intuitive reimbursement platform using which your employees can submit reports in a few steps.
You can upload your approval workflows, and set approvers, and admins who will process this request. Every step is automated, which means one person approves and passes it to the next level automatically.
Those who submitted the report don’t have to manually follow up. They can log in and find updates in the same place.
We also have something for the pre-trip expense approval system. Employees can now be given corporate credit cards and allowed to spend business money directly. Create cards, add credits and spending limits, and share them with them.
Every card will be internally related to a budget category for easier categorization and monitoring.
Your employees feel empowered to spend without having to report. And you can monitor centrally all card payments, or every expense made through Volopay for that matter.
Volopay is an all-inclusive payment suite that’s best for all of your business payments.