How small businesses can save money on corporate travel
tl;dr: Business travel expenses can easily get out of control, especially for small businesses that don’t have concrete policies in place.
In a recent post, we discussed how small businesses can tell if it’s time to implement corporate travel policy. We laid out some of the warning signs as well as what these growing companies have to lose by standing pat. But we didn’t dive into the next (hugely important) step: How can small businesses tailor their corporate travel processes to save money?
If “winging it” no longer makes sense as your corporate travel “plan,” and you’re worried about reining in costs, then your company needs a formalized process for managing corporate travel. A plan that works for your internal budget-minders — so you can finally control your annual travel spend — but also a plan that works for your traveling employees, so they are motivated (and incentivized) to actually follow your guidelines.
Managing Your Investment
As your business has grown, you’ve learned (perhaps the hard way) the importance of planning your budget. Your company forecasts business needs and sets spending budgets for office supplies, hiring and training, advertising and marketing — the list goes on.
Business travel should get that same treatment. If it’s not already, travel is likely to become one of your biggest annual line items in short order. Indeed, travel may be a key component in achieving your company’s growth strategies. Don’t think of it as a cost center but rather an investment in your future. Managing your business travel, and establishing booking guidelines, helps you stay under budget and avoid unnecessary expenses.
What does a travel plan include?
- An annual budget (based on last year’s spend, adjusted as needed)
- Policies and procedures for employees to follow when booking travel and submitting expenses for reimbursement
- Duty of care coverage – this is not formal insurance, it is your company’s information for traveling employees about what to do in an emergency, whether that’s a missed flight, a robbery, an accident, or a natural disaster
- A tracking mechanism that facilitates real-time monitoring and timely after-the-fact data analysis for corporate travel bookings
With these elements in place, your company can now clearly see where travel spend is going and how you can reduce costs. For example, knowing where your employees travel, how often, and for how long helps you negotiate more favorable rates with airlines, hotels, and rental car agencies. Perhaps a trade association your company belongs to offers discounted travel options for members. You can also research the most favorable rewards programs as well as the most beneficial business travel credit cards.
Another way corporate travel planning reduces costs is through data analysis. You can identify when and why employees are ignoring elements of your corporate travel policy, making random “extracurricular” arrangements instead. Is this a discipline issue, or do your policies need to be refined to become relevant or convenient? Companies that build flexibility into their guidelines have the best success when it comes to compliance and budgetary control.
Simple and Smooth
The goal of small business travel planning is to set-up a system that controls costs, yet is simple and convenient to use. That includes a way to get help when needed, whether it’s assistance booking flights or changing plans during a trip.
Corporate travel planning works best when it is a team effort. Everyone must understand how to use the system you create and why it’s important that they follow the guidelines.
The easiest and most effective way to simplify your travel and expense program is by adding a digital platform to your team. **Cough, cough** Lola.com, for instance. Lola has become wildly popular with small businesses and their travelers because it’s a single resource everyone can use to streamline travel planning, day-to-day implementation, and real-time analysis. By controlling travel spend and minimizing unnecessary costs, you can stretch your company's cash flow and working capital to help your budget go as far as possible.