If you’re a finance manager responsible for budgeting business travel expenses, you know how difficult it can be to keep track of travel expenses while giving employees access to the best travel deals.
The United States will spend $322.42 billion on business travel in 2021. As this number will increase through the rest of 2022, finance teams monitoring business travel budgets need to be on the lookout for overspending.
Familiarizing yourself with the primary sources of company overspending helps you stay ahead of the curve and budget for business travel.
Here are some possible reasons for your current overspending and our top five ways to take control of your company’s corporate travel budget.
5 Ways to Control Overspending on Corporate Travel
1. Use an all-in-one platform
When employees book business travel using various platforms and apps, managing travel budgets and keeping track of expenses can feel as chaotic as an airport customs lineup.
As any experienced finance manager knows, logging into separate platforms to download individual invoices for reimbursement is tedious, difficult to track, and detrimental to expense management.
To simplify invoicing and expense reporting, find a travel management company with an all-in-one platform, where you can book flights, accommodations, and everything in one place. Ideally, the platform should be easy to use, provide ample support and plenty of trip options.
TravelPerk offers the best business travel management solutions 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 the finance team does not have a clear overview of the company’s spending trends. Without available real-time data, financial decisions are made retrospectively rather than in the present moment.
By accessing real-time data you will be able to identify teams that are consistently booking over budget – Astronomical New York hotel rates, anyone? Or, where to adjust the per diem spend on credit cards allocated for domestic travel and international travel.
TravelPerk’s flexible real-time reporting helps you budget your business travel. Our real-time reporting breaks down company data by individual employee, transportation type, booking type and cancellation. It also allows your team to schedule reports at pre-defined deadlines and set alerts when it’s time to make data-driven decisions.
3. Consult the Business Travel Policy
Informing employees of the current authorization process for business travel expenses, as well as expense reimbursement, is essential for companies seeking proactive overspend solutions. It educates employees about corporate travel policies and gives employers an opportunity to review the guidelines.
Start with a business meeting involving all necessary teams and departments to address the following questions. It 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 often is it communicated?
- Need to update your travel policy?
Next, establish a clear schedule outlining the frequency with which you plan to communicate the company’s travel policies to employees. Determining what relevant information to include at this stage also ensures that you capture all the essential points in your messaging. For example, information on tax deductions, incidental expenses, and IRS policies.
Establishing a policy review schedule during your deliberations 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. It is also important to communicate company-wide or more granular policies.
Also be clear about the exceptions to the corporate travel policy. For example, there are certain instances where employees have allowed Go over budget?
To get better policy compliance results, choose a booking tool that features customizable built-in policies and gives you a clear picture of policy parameters. With TravelPerk, policy parameters can be set for groups that travel more frequently, or individuals with special allowances. You can also automate and set limits that enable employees to book trips within your policy, without requiring pre-approval. Alternatively, if their trip is outside of policy, TravelPerk will flag it for review by your pre-selected approver.
Having employee travel policies is essential to meet employee travel needs and improve policy compliance TravelPerk’s travel policy templates help you get started. Our comprehensive templates are fully customizable, and designed to help you set up your travel policy in minutes.
4. Plan ahead for business travel
Booking last-minute travel reservations increases company spending toward business travel expenses. While real-time data reveals that workers are booking last-minute trips, planning ahead is your safest bet for cheap fares.
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 benefits, travel awards, or upgrades for business travel, encourages them to book their business travel expenses in advance for cheaper airfare and hotel costs.
5. Provide flexibility for canceled trips
Despite planning ahead, business travelers need complete flexibility if they need to cancel their business trip.
In a recent GlobalData survey, 52% of respondents reported feeling concerned about international travel restrictions. Post-pandemic business travelers are looking for flexible options when facing potential delays or cancellations as a result of these restrictions.
A travel program factoring flexibility and reimbursability into the total cost gives peace of mind even though travel plans are subject to change. FlexiPerk allows employees to book airfare, hotel rooms, car rentals, or ground transportation at any rate with any provider and cancel any part of a business trip up to two hours before your departure and receive a minimum 80% refund of the trip cost. .
Bottom line, make your business travel budget work for you by controlling company overhead. A business travel tool, like TravelPerk, gives employees the freedom to self-book their travel, while offering customizable options to keep your budget under control. For more information on how to get the most out of your corporate travel budget, download our eBook How to Optimize Your Travel Budget.