How to optimize your business travel budget
Whether you’re working for a small business or a larger corporation, business travel can be a large expenditure, second only to payroll. With 84% of business travelers expected to take at least one trip in the next 6 months, making corporate travel cost effective has never been more important.
The problem is, many CFO and Finance managers spend too much time chasing multiple invoices, receipts and logging into numerous travel platforms to get a grasp on how much of their business travel budget has already been spent.
This often chaotic process combined with lengthy expense reports makes it incredibly challenging to get ahead of the budget and make informed financial decisions in real-time.
As business travel is typically a variable cost, if your company is booking corporate travel across various consumer platforms or via a traditional travel agent, rather than booking everything in one place, getting an accurate, up-to-date view on your spend so you can optimize your budget is not only stressful but nearly impossible.
In this piece we’ll share our insights on how you can save money and make your budget work harder for you.
Real-time data is the key
If you want to optimize your business travel budget, having real-time data to hand will help you set benchmarks for your travel costs, create future budgets that reflect reality, and help you make smart decisions that will affect financial decisions in your current month and quarter.
To gain better control of your budget, you need to have full visibility of all business travel expenses and be able to visualise the spend of every business trip by various categories. This will help you work out the average cost of business travel for each department, team, person, and/or office location. If you’re used to more manual, labor-intensive processes, this sounds like a dream, right?
So how do you get the data you need?
The easiest way to get the data is to let your business travel booking tool collect it for you.
This means moving away from allowing business travel managers and office managers to book their corporate travel on websites and apps designed for leisure trips and vacations. Avoid using traditional travel agencies to book your business trips too. Instead, we recommend using a modern booking platform specifically designed for business travel and most importantly, keeping the finance teams’ needs in mind.
Ideally, the booking platform you choose should automatically report on the total cost of travel by individual employee, team and office location. and also provide insights such as average trip price, date range, and spend type (airfares, hotel rates, etc.).
The tool should also include labels so that you can collect more tailored information on your travel expenses, like how much money is spent on a particular client or event, for example.
At TravelPerk, we offer a flexible reporting solution – allowing you to see where spend is going in real-time. Our tool allows you to choose a mixture of automatic filters and manual labels, so you’ll be able to see all the data you need at a click of a button.
With reporting tools you can separate your business travel spending and costs by:
- Spend by department or team.
- Spend by employee.
- Spend split by flights, hotel room, car rental, trains.
- Spend by office.
- Spend by project, customer, job position or event.
- Real-time spend for the current month, quarter or year.
- Recoverable VAT.
Being able to categorize and separate these expenses is the key to making smart operational decisions and optimizing your business travel budget.
Travelperk’s reporting tool also allows you to configure reports or schedule alerts centered around the data that matters the most to you, meaning you can make more informed financial decisions.
Streamline your expense management process
In addition to sophisticated reporting tools, your travel management company, should allow you to integrate your business travel booking tool with your expense management system. This way, you have all expenses consolidated within one platform to make your spending analysis much simpler.
Tools like Ramp, Divvy, Payhawk, and Yokoy enable you to add in other data such as meals or event tickets to get a full overview.
Learn more in our comprehensive guide about how to streamline your expense management process.
In addition to real-time data and streamlined expense processes, here are 3 more tips to make your business travel budget work harder for you.
Integrate your travel policy into your booking tool
To control real-live bookings, you should be able to integrate your business travel policy into your booking tool. This not only benefits the finance team but allows employees and travel managers to be better informed of what’s in budget. Meaning you’ll have better chance of improving travel policy compliance.
When setting up your travel policy inside of your booking platform, create the minimum number of policies possible. We recommend most business owners to apply a standard policy, and an executive policy if needed. This will help make travel policy management and coordinating travel expenses a lot smoother.
Set up automatic approval workflows
It helps to define approval workflows so that travel managers can review and validate requests more efficiently. If your travel policy is integrated into a booking tool like TravelPerk, you can set up your preferred approval workflow. For example, if a traveler books an upcoming business trip that falls within the travel policy you’ve set, you can set it to be automatically approved. Leaving you to get on with more important tasks!
Reclaim VAT on your business travel
Small and medium sized businesses lose millions each year from unclaimed VAT on their business trips. With so many different tax regulations in the UK and around the world, the refund process can often be confusing and drawn out for many finance teams. Luckily, TravelPerk has created a simple VAT recovery solution allowing you to keep travel costs down and save up to 20% of your annual travel budget. TravelPerk collects invoices on your behalf from service providers so no cash is left on the table.