Business travel is one of the largest and growing expense categories across the world. In the US alone, business travel expenses topped $291 million, an increase of 7% from 2014, reports Global Business Travel Association. A JP Morgan survey estimated that travel and entertainment expenses were 10-12% of the total budget, second only to rent and operational expenses.
It is important for companies to closely monitor their TnE (travel and entertainment) expenses to streamline operational efficiency and save costs. Organizations across the world are automating TnE expense reporting to identify fraud and find avenues of saving costs. Automation, along with a set expense policy that advocates advanced planning, helps in keeping travel expenses under control in organizations.
It is important to recognize the warning signs of increasing travel expenses, and to take effective steps for control.
Advance bookings should be your norm
Does your company encourage the practice of advance booking? It is estimated that business travelers who book at least two months in advance save almost 21% of their travel costs. It is not feasible to minutely plan in advance for every situation, but planning ahead does pay off. It is also important that organizations negotiate their travel costs with partner airlines and vendors, so that they can provide corporate discounts.
Automation red-flags close call bookings and helps alert company policy makers. A company travel policy can be integrated with the travel booking tool. Many organizations mandate advance booking for travels to avail purchase discounts. Pre-trip approval is gaining credence and many companies feel that it will eliminate potential problem areas. In many organizations, advance planning by using automated expense management solutions actually enforces company polices with variations red-flagged at the planning stage.
Remain within budget provisions
Automated travel expense management efficiently tracks prepaid bills and prevents duplication of bills. This helps identify double dipping and frauds while filing expense reports.
Company travel polices should resonate with the current prices and cost of living at destinations. Many organizations identify potential partners and enter agreements with hotel chains, and travel providers for better terms. This helps reduce costs and discourages employees from looking out for expensive options.
Take full advantage of data insights
Historical data mining and analytics help in identifying spend patterns and expenses accrued for each vendor. These figures can be used to negotiate better terms and packages from vendors. This brings down the costs. Many organizations report that TnE expense management solutions help in getting volume discounts from the vendors.
Reporting and monitoring become transparent as employees and the management can simultaneously view and track the cost savings. The visibility and control of the process reduces the opportunity for disputes.
Employees can be given incentives to reduce their travel costs. In certain companies, an employee is rewarded with a percentage of their total travel savings. This encourages employees to go beyond their responsibility of spending judiciously on travel. Quicker reimbursement of employee expenses makes business travel more welcoming and employee satisfaction also increases.
Automation helps you to integrate your expense policies to help employees plan their business travel well within budget. An efficient travel and expense management solutions helps to enforce company travel policies and data analytics deliver better control for decision makers. Automation speeds up the expensing process and provides data in your arsenal which can be used for future negotiations with vendors. It is important for every business to understand what is driving travel costs north, and set the goals for saving something substantial.