Corporate travel management: Essential guide for businesses
Today businesses rely heavily on business travel to succeed. As and when the processes are re-defining in the corporate industry, business travel is one such aspect that is changing at a rapid pace. It is becoming more value-driven and technologically advanced. When it comes to managing a business trip, it doesn't just involve flight bookings, accommodation, transportation, and meals. It also requires setting guidelines for approval processes, financials such as expense reports, budgets, reimbursement protocols, and corporate travel policies compliance.
We will look at the challenges that occur while managing corporate travel and how you can simplify your travel management process. Business travel management is necessary so that employees can optimize their time on the road while still keeping company goals in mind and complying with regulations.
For employees, work trips can be both productive and exciting, and it is only until they come back from the tip and spend hours filing that expense reports. Trips should be an opportunity to broaden your network, raise your company's profile and create unforgettable memories But making the expense report.
Corporate travel management entails everything from planning and booking flights, hotels, and transportation to organizing the proper papers and approval methods and mileage tracking and paying for everything essential for a corporate trip. In simple terms, if we were to explain, it is a system for monitoring and organizing business travel.
With managing business travel, it's essential to balance employees' travel needs with the company's financial and other objectives. Some businesses hire specialized travel services to handle this other full-time travel managers.
Business travel management is critical because it ensures that businesses should get the most out of their travel expenses. It's important to analyze that they are not overpaying for transportation and lodging. It also specifies how employees plan business travels and guarantees that all travel expenditures are distributed in the company's best interests. The most significant factor in having a well-managed company travel program is to ensure employees' safety.
Financial control: Involves working with each department to evaluate their travel needs and build a budget based on current spending.
Safety and efficiency: It involves ensuring employee safety and efficiency while keeping tabs on travel expenses.
Policy adherence: It entails the creation of business travel policies that reduce the company's travel costs.
Productivity: It allows employees to feel calm and recharged at all phases of travel to achieve the goals of a business trip. This helps them concentrate exclusively on their task, resulting in better results.
Corporate travel managers are a vital part of the company. A corporate travel manager is the internal employee of a company, or maybe, an external agent (if you have outsourced your travel system) who oversees and plans the corporate trip for an entire organization. And not just this, the central role entails establishing corporate travel policies, which is the make or break point of a company as it involves the rules and procedures for employees to follow. Overall, the travel manager assists the organization in efficiently and effectively navigating worldwide business travel.
Some of the activities that a travel manager facilitates are:
1. Booking trips and accommodations for employees.
2. Keeping track of the company's travel expenditure and ensuring that it remains within budget.
3. Vendor selection and management.
4. Evaluating or delivering travel expense information to the finance department for review.
An in-house travel management agent is a person you hire to handle the booking of trips, make last-minute modifications to travel plans, and maximize your savings while finding the most excellent prices for your staff.
These people are highly specialized travel agents. These people are available at your request and use online booking tools to help you save money. External travel management agencies will be open 24 hours a day to your service.
Every business needs to master the four c's of corporate travel management if they want to streamline their travel spending.
It's necessary to understand the why of overspending. As overspending by employees can account for up to a third of a company's travel and expense budget, employees must collaborate with corporate travel managers to understand travel policy guidelines, and CFOs must collaborate with travel managers to create strategic policy improvements.
In business, everything comes down to expenses on office supplies, vendor payments, ads, or traveling Though traveling is just a small part of expenses, it can take a significant toll on your budget if not managed properly. Overall corporate travel managers have to look for only two aspects: Spending less and higher ROI from business travel Pricing optimization can help organizations finance additional business trips without increasing their budgets substantially.
Effective travel management will only be possible if CFOs are involved in understanding the technicalities of a travel policy or instead of creating a business travel policy. Because if it comes down to cost-cutting, they should know where the travel spend is allocated and why.
Whenever we talk about a good environment, culture plays an essential role. Businesses should encourage a positive corporate travel culture for employees to be their most productive selves; Businesses may empower their employees with tailored travel experiences by utilizing effective corporate travel management software.
Because each employee in the organization has a corporate card, the process for each employee is the same:
- Through their travel software, the employee submits a request for an additional trip. This information contains the vendor, the price, and the rationale for the purchase.
- Their manager, deployed during the approval process, receives an alert. They get access to all of the information through the software they require without leaving their workstation.
- The manager gives his approval, and the employee can now access the funds.
- Using either a virtual card or physical card, they make the purchase for which they requested funds.
- When employees upload a photo of receipts, the transaction (together with the receipt or invoice) is forwarded to the finance department.
- The transaction, receipt, and required accounting details are synced to the accounting software.
- In accounting, inbox transactions are labeled as owner, merchant, amount, date, and status.
- Now the finance team can reconcile expenses & receipts from one single platform through an automated encoding.
Travel management systems help companies streamline their travel processes. It is software that allows you to plan, track, analyze business trips and provide travel inventory, policy, and reporting.
For companies that still follow old and traditional managing expenses, the system smoothens out those manual work and automates them altogether.
A travel management program is built on four pillars:
- Maintaining employee safety.
- Boosting program cost-effectiveness.
- Increasing employee productivity.
- Increasing transparency.
Travel costs aren't always the most critical portion of a company's budget. Employees think that if it isn't a core component of their job, they will find various ways to avoid adhering to the rigorous standards. And instead, focus on the element of their job description. They avoid specific guidelines or steps because there are too many rules, approval hurdles, and complicated processes. Challenges to managing corporate travel range from operating costs, rigid policies to not giving employees freedom while planning a corporate trip.
Sometimes fixing the errors takes a lot of time. Employees sometimes fill in incorrect expenses, which may not match your credit card statements. It involves going back and forth to your invoices, receipts, and if any receipts go missing, it's annoying. It's annoying in terms of figuring out who approved the expense. So to avoid any errors and save up hours, it's essential to invest in good automation software that avoids the errors and duplication of travel expenses.
For employees, a business trip is an opportunity for new experiences and to build a business. So employees must plan their journey according to what's best for them. Too many rules, like forcing them to live in a particular hotel they don't want. If employees feel compelled to choose specific options, some of the allure is lost, And they may not be able to focus on work assignments with the same excitement. Doing this will provide employees with autonomy and will lessen the burden of the finance team on booking itineraries for every employee.
Filing expense claims is the one thing that employees dislike. Expense reports take a lot of admin if employees pay from their pocket or through company credit cards. Every time employees come back from the trip; they have to spend hours filling the expense report and avail for reimbursement the next day.
The thing with using company credit cards for managing travel expenses is that keeping track of receipts becomes a nightmare for employees and the finance team. The finance team has to collect those receipts every month to reconcile the expenses with the credit card statements And later work to settle employees' claims.
To lessen the burden for both payment cards are the best way to settle expenses. They log in every payment the moment you make it, so there is no more reconciliation or filing expense report headaches.
Managing travel requests differ for small to large businesses. Large corporations might hire a travel agency to manage that corporate travel, wherein the small businesses' workload comes down to the person in charge of the financial or administrative aspects of the company.
What if you have to go on several business trips? Depending on your company's size, you may find that traveling becomes quite cumbersome compared to how easy it was when you were managing things on a smaller scale. At times like these, having suitable systems in place can help ensure you don't fall behind or delay the approval process.
Otherwise, it could mean missing out on essential things, which means fewer positive outcomes relating directly to your project's results. Sometimes it may also happen that one team member from one department may send you trip requests through different sources simultaneously.
Sometimes unplanned travel like last-minute air booking, hotel booking can be hard to pull together, And the challenges seem to vary. Frequent modification or cancellation of flights can add to a company's already enormous travel costs.
Travel automation software helps your finance team and employees:
- In managing all employees and their expenses through an easy-to-use interface.
- Regular detailed reports help keep track of your spending.
- A software that allows you to reconcile your trip expenses easily.
- Pay straight from the company wallet to save the headache of submitting lengthy reimbursement paperwork.
And with all of this, Automation leads to fewer errors in travel arrangements, and the administrative crew is free to focus on more vital tasks. Furthermore, if employees may arrange their excursions, they can design the most convenient vacation for them.
A travel policy is an effective tool to manage employees' travel expenses. No matter how good your travel policy is, it takes time for employees to go through every detail in that lengthy document. And if they do, they might skip some steps, ignore some essential rules, ask too many questions if they don't understand, and forget those minute details. This could lead to mistakes.
But what if you automate it? That means you can incorporate your travel policy into a travel management system, which eliminates the need for anybody to remember it or ask questions. They follow the procedure from beginning to end, doing what is needed of them. Remember that compliance will be significantly more straightforward if the policy is well-balanced and flexible than if it is excessively rigid.
This is the best way to control your budget. How. Apart from the flights and overnight accommodation, employees might pay for daily expenses such as meals and cabs out of pocket or with a business card; depending on your firm's policies, these small costs can quickly add to your travel budget.
So, the finance team can set spending limits for each card according to the budget. And not only this, they can even restrict the available vendors. And the budget for traveling employees is set slightly higher than the other employees. And for that, your finance manager can increase your pre-approved sum to match your per diem. The primary purpose of setting limits on cards is to provide controlled access to company funds to the employees. They can spend freely and fast, but never over the limitations.
Approving funds requests or trip expenses is another time-consuming task. With the automation tool, you can request funds and get them approved in real-time just by using the mobile app, web app, and even just from email.
You can create approval workflows in 3 ways
- No approval is required for any trip
- Approval is required for some trips
- Approval is required for every trip.
You should have a simple approval process in place. If an employee tries to book a trip outside of policy, they should be able to request approval from within the app, And once they send the approval request, the admin should be notified instantly. There's no need to send emails with all the expense details for approval.
The most crucial step is to choose who will approve the trips: the finance manager, corporate travel manager, CFO, or numerous department heads. Some systems offer a multi-level approval process to streamline requests, wherein you 2-3 people to approve the requests. This procedure could save your company time spent on back-and-forth emails between team members and supervisors and hours spent examining the details of budgets per trip type.
The most challenging work a travel automation software lessens is filing expense reports. So, if there is no filing of expense reports, no expense claims, You know employees hate expense reports altogether.
As no one wants to come after a long trip and create long expense reports and then wait for months to attain reimbursement, finance departments have to reconcile payments with credit card statements, chase receipts, and instruct the entire firm on complying with the guidelines.
The sad part is, what if employees lose their receipts? A finance manager has to go back and check credit card statements amongst the thousands of other transactions and look for who made the payment and what? Employees can quickly file a claim with the tools by clicking on the receipt and sending it in for review. So, giving employees access to the company's funds from the beginning of their trip takes away a lot of pain and admin work and takes away the headache of losing expense receipts.
Expense management software like Volopay allows you to pay with virtual and physical cards to keep track of your travel bookings and payments in one spot. You can use a virtual card generated by the platform to book flights or accommodations online. You have a physical, prepaid credit card to pay for when you're on the go, maybe an Uber. As a result, employees are never required to pay for anything with their funds.
Now, it's decided that fixing your travel issues is about improving how your company spends. It would help if you had comprehensive expense management software for your business that manages travel expenses and other expenses. It provides real-time insights into your travel spending, so you don't have to track payments later. Combine this expense management approach with payment methods such as prepaid and corporate expense cards. Both these cards include pre-approvals, spending limits, so you don't have to look into travel policy every time you make payment.