Cashflow is the lifeblood of a business, which is why effective money management is so crucial to keep things ticking over. Depending on the frequency of business trips, corporate travel can eat substantially into a company’s budget, so you need to know how to manage the associated costs.
Are you too generous with expenses?
A good management style is even more important in light of research which showed that 99% of all employee expense claims in Britain were given the tick of approval, regardless of whether they were in keeping with the expense policy of the company.
The research, which involved 12 million individual expense claims by 200,000 employees based in the UK, revealed that less than 1% of all claims were questioned – and 94% of these were ultimately paid.
The study, conducted by Concur – The 2013 Concur Employee Expenses Benchmark Report, also found that businesses are failing to enforce their policy on expenses despite the fact that staff make travel reservations which are not in line with company procedure.
Concur noted that companies need to be more “robust” when it comes to approving expenses, particularly in respect to more expensive purchases such as travel, entertainment and hotels.
The research estimated that UK-based firms shelled out ?8.2bn worth of expenses in 2012, a figure which could have been significantly lower with effective management of corporate travel costs. With this in mind, how can you keep costs associated with business trips to a minimum?
The study by Concur complements a survey from Amadeus which found that 51% of staff do not fully understand their company’s travel policy. Therefore, educating employees about expenses should be priority – make sure they are aware of the deadline and that they know what will be covered.
This might involve enforcing limits. For short trips, prohibit dry cleaning and laundry, put a cap on mobile phone usage abroad so employees take advantage of free services such as Skype and enforce a limit on alcoholic beverages. Encourage them to opt for cheaper alternatives, for example taking the free shuttle or a train to the hotel rather than a cab.
You should ensure that anyone tasked with making reservations for travel is frugally minded. Do they know the best websites to look at, or are they aware of the companies that might offer you a good deal? While for smaller firms it might be more cost-effective to book travel in-house, larger companies may wish to consider a reliable Business Travel Agent such as CT Business Travel.
Travel management companies have often secured deals with hotels and airlines meaning clients can book trips at discounted rates.
Finding a hotel
If you are going it alone, it is worth taking the time out to choose a hotel perfectly suited to your needs. If you know in advance that you will need to print, copy and fax/email documents, it is worth choosing a hotel with a free business centre. Most hotels offer free Wi-Fi and some have conference rooms, so think ahead which amenities you will need – and which are offered for free – and you could save a tidy sum.
Know what you’re spending
Make sure employees know to keep all their receipts in order to claim for expenses when they get back to the office. That way, you can have a detailed look at where money is being spent and source areas where you can cut down. Business credit cards can also help with this, since information related to all business trip activities will be in one place.
- License: Creative Commons image source
This article has been compiled by Simon Colley of CT Business Travel – Twitter handle @CT_Corporate