Improving Company Travel Compliance While Keeping Budgets in Check

Many company’s chief financial officers will tell you that their employees do a very poor job of staying in compliance with their corporation’s travel policies. Others will tell you that they are constantly being asked to pay for expenses exceeding proposed budgets. This constant fight can be handled by making sure that travel policies are clear and up-to-date along with appropriating funds correctly. Many company’s chief financial officers will tell you that their employees do a very poor job of staying in compliance with their corporation’s travel policies. Others will tell you that they are constantly being asked to pay for expenses exceeding proposed budgets. This constant fight can be handled by making sure that travel policies are clear and up-to-date along with appropriating funds correctly.

Corporate Travel Policies

Regardless of a company’s size, they should have written corporate travel policies that are in line with the company’s culture. These policies should clearly spell out where employees are expected to book their travel or if they can choose to book wherever they find the best rates. Policies should also enunciate when corporate travel cards will be used and when employees can use their own credit cards while receiving compensation at a later date. Furthermore, the policy should state what class of flights will be covered and if particular airline alliances are preferred. The policy should state how to determine the type of accommodations the employee must choose along with how to determine an appropriate rate. Policies should also be put into place on car rentals, taxis and other forms of transportation allowing employees to understand when these expenses will be covered. Clear and realistic policies are likely to increase employee compliance.

Cost of Airline Tickets

The corporate travel policy should cover an estimate of a reasonable cost for airline tickets into different cities. Encourage employees to book as far ahead as possible by putting a requirement in place that tickets booked on short-term notice must be approved by upper management. Encourage employees to use exchange rates to the company’s advantage. Additionally, make it fun for employees to hunt down the best fare for their seats by splitting the savings with them.

Average Ticket Prices US to Major Destinations

 

Destination First Class Economy Class
US to Africa $5,800 $4,800
US to Asia $3,800 $2,800
US to Australia $5,800 $4.800
US to India $5,000 $3,700
US to Europe $3,500 $2,500
US to South America $3,800 $2,800

 

Corporate financial officers can help keep travel budgets under control by making sure that all policies are outlined clearly in writing so that employees know what is allowed and what they must avoid. The policy should cover all areas of travel including airlines, taxis, car rentals and trains. The written directions should also cover when a hotel will be paid for along with advice on picking out great ones at reasonable costs. Encouraging employees to save money by splitting the rewards with them when they find a great deal may also help keep costs in check.

Business Travel’s Changing Landscape

Over 94 percent of all business travel in the United States happens on the ground within four hours of where the business executive is based. The other 6 percent are usually made by air and last for less than four days. Businesses expect to pay an average of $1,887 on business trips. Almost 50 percent of all business travelers say that they feel intense pressure from their employers to control expenses while traveling. These excursions are usually made because top management finds that there is no substitute for being there in person. The average business traveler is 38 years old, has a college degree and is male. Beyond that, business travelers tend to divide into two distinct groups who each have their own expectations.

Road Warriors

Business travelers who are road warriors tend to take more than 13 trips annually, and they tend to spend at least four days away from their main office on each business trip. Staying connected to their families is a high priority because of the amount of time that they spend flying. Therefore, they are very likely to bring along the latest gadgets and they embrace new technology with open arms. They are also likely to bring along multiple ways to connect because they do not want connectivity issues to ruin their trips. While they are capable of writing expense reports that outshine other travelers in their offices, most prefer to use technology to make filing these reports faster and easier. Many road warriors have been to the same destination multiple times, so they are harder to impress although they will not hesitate to spend money on a new adventure when the opportunity presents itself.

Business Travelers Gaining Experience

In order to become a road warrior, businesses must recruit younger members who are willing to spend time traveling. These travelers are very likely to take more than 14 business trips a year. They are also more likely to tack personal days on either end of a business trip, and they may even bring someone else along with them. Therefore, the best companies have created well-written policies on how many personal days can be taken on a business trip and who can go. The inexperienced business traveler is more likely to spend money entertaining clients in unique ways. This has given rise to travel industries offering unique experiences for the business traveler. The inexperienced business traveler is also more likely to use social media to connect with local friends in each destination, and they are more likely to share their experiences on Facebook, Twitter and other social media platforms.

In order to make the most of the travel budget, corporations must have well-written travel policies. Establishing these policies ahead of time sets clear expectations on what employees can and cannot do while traveling on corporate expense budgets. Corporations need to make it easier for travelers to use the latest technology to stay connected to their families and friends while on the road. Allowing employees to file expense reports quickly adds to the enjoyment level of trips while lowering stress and burnout rates. Businesses need clear policies on who is allowed to go on trips along with policies on what expenses are deductible.

Best Airlines in 2017 for International and Domestic Business Travel

It is estimated that businesses will spend more than $1.5 trillion on business travel by 2020. China is quickly becoming the hottest market for business travelers growing by about 11.4 percent annually. By comparison, business travel in the United States is growing only by about 1.5 percent annually. More executives from India and Indonesia will be traveling, and more directors of companies will be traveling to those countries as well. No one is sure the long-term impact that Brexit will have on business travel within that region. Regardless of the region, they are traveling to or from, business travelers are demanding more personalized service along with the ability to get more done while in the air. They also want top-notch services from their airlines while they are at the airport. Competition on many routes will continue to be stiff with airlines fighting to get the most business travelers.

The Best Airlines for International Business Travel

Qatar Airways has upped their game for business travelers with the introduction of Qsuites. These moveable dividers in business-class allow travelers to enjoy working in their own private suite which comes complete with a door. Up to four seats can be enclosed in one suite making it easy to have a meeting in the air. Travelers can adjust the mood lighting along with using luxury beauty products from Italy’s Castello Monte Vibiano Vecchio. Travelers can also choose from a wide selection of the world’s best wines and choose from top-notch food selections based on the destination along with the ability to choose from over 1,000 movies, songs and games by just touching a button.

Other airlines with suites that business travelers may want to consider include Singapore Airlines allowing guests to pre-order from their favorite airline chefs, Etihad Airways suites that come equipped with their own showers, Air France suites that come with their own 6.5 foot long bed and Qantas featuring vintage champagnes.

The Best Airlines for Domestic Business Travel in the United States

Even if you are staying in the United States, the choosing the right airline can help business travelers feel great when they reach their destinations. Business travelers will want to check out the Polaris Experience on United’s 77W wide-bodied airplanes and soon to be introduced to their other airplanes. Their patented Zodiac Seats each offer aisle access, and flyers can pull up a petition allowing them to be totally secluded from flyers sitting next to them. Each seat comes with a white marble-like side table and a pull-up bar. Above each seat, flyers find an air vent allowing them to control the temperature in their portion of the airplane. A mattress and a cooling-gel pillow make it easy to sleep while in the air or use the in-flight entertainment to keep yourself occupied. Before leaving and after arrival, many flyers take advantage of the Polaris Lounges that include showers and laundry service.

If you simply must get to your meeting on time, then consider Hawaiian Airlines, Alaska Airlines and Delta. These airlines each had more than 85 percent of their flights land within 15 minutes of their announced arrival time, and they had very few canceled flights.

As more top executives take to the air to reach important business meetings, airlines are increasing the enjoyment during flights to get there. Travelers flying overseas should consider Qatar Airlines because of their Qsuites while other airlines like Singapore Airlines, Etihad Airways and Air France are incorporating their own suites into airplanes. In the United States, United Airlines has introduced the new Polaris experience to many of their planes. If you simply must get there on time, then consider Hawaiian Airlines, Alaska Airlines and Delta.

Why Business Travel Policies Are Important

If you run a business that demands travel, then you more than likely to have some sort of travel policy in place. Your travel policy also should have procedures in place that cover most contingencies that employees might face on the road. But when was the last time your policy was reviewed? It is a good idea to do this at least once a year to make sure that it’s not limiting your business growth and frustrating your employees. The other reason to do this review is that change is pretty constant in all things and reviewing your company’s policies and procedures in travel and expenses related to travel and business may be exactly what you need to drive up your business results and decrease your travel expenses.

Here are five things you may want to consider when creating or updating your company travel policy. First of all, base your policy on the employees that will be traveling the most and on what they feel and on what would be beneficial for them. As an example, they may not care what hotel they stay at, but they may prefer to eat better than the fair available at a low-cost hotel. In that case, the money you saved on accommodations could be reallocated on better dining options. Avoid a standardized travel policy, instead, you could even adapt it to the traveling employee’s lifestyle.

Your travel policy is a tool for communication. If properly laid out it will provide clarity and boundaries for those employees that travel. It is a company guideline policy. It should detail everything from booking flights to reserving rental cars. It should also put whatever limits are expected by the company for payment of these services. As an example, do you expect the lowest air fares available to be purchased by your employees or is first class acceptable? All of these things need to be communicated in you travel policy manual.

Don’t forget that travel, especially long-term traveling, will take your employee away from their friends and family. This can take a physical and even a mental toll on people. You can soften some of that burden by allowing your traveling employees to use their personal travel reward memberships for flights and even hotel stays. This way they not only are making a paycheck but they are also accumulating points toward their next family vacation.

Because the price of travel is constantly changing, travel policy and procedures manual should be reviewed at the very least on an annual basis. This will allow you to balance your travel budget by being aware of any additional costs that crop up. Here are a few of the items that you might want to know about.

  1. What is the cost of travel now? Does the company’s budget allow for the necessary expenses? What are the average gains for the company based on travel days and prospects seen?
  2. Are company employees getting what they need when they travel? Are there things that would make their travel more comfortable? Are they making any unnecessary purchases?
  3. Have there been any issues or employee complaints that might change your policy or procedures?
    • Answering these questions can help you refine your company travel policy and could even possibly help control the costs involved. You should also evaluate industry trends and regularly assess your travel budget needs. This will help you discover if your travel budget is accurate along with your projected travel expenses. Also keeping track of new business contacts and new customer acquisitions versus money spent to acquire them. This number will give you what the cost benefit analysis of your business travel actually is. Be especially aware of even small costs that could possibly be considered minor. These seemingly insignificant expenses can add up to a surprisingly large amount if not kept under control.
  4. Be Aware of Scams

When you create a travel policy, always be sure to put in checks and safeguards to prevent employees from taking advantage of the company. Turning in receipts in this digital world we all live in today is just not enough as technology advances. As it advances, so do the chances for successfully manipulating travel expenses by employees. There are, as an example, websites that actually allow the users who log in generate fake receipts. Here is an example of what I’m talking about, just click or paste the hyperlink http://goo.gl/XT6WNb into your browser. Because of sites like this and the fact that it’s illegal to request an employee’s personal credit card statements, there is little chance of proving that this sort of activity goes on with the employees you have that do travel.

However, there is a way around all of this without calling an employee’s character into question, just get your company to issue the traveling employee a corporate credit card. Another way to attack this problem is with a company expense card. Expense cards can be managed easily and all expenses can be tracked and accounted for as they are paid for. You have the ability to approve card funds and even set limits on spending if you wish. Which one is best for you is personal preference.

One of the biggest expenses a company has, is with airline travel. However, what many people are unaware of is that you may be able to actually negotiate airline rates. You can, if you have an attractive travel schedule, even be able to get into a cooperative traveling schedule with an airline. These kinds of arrangement do occur depending on the amount of travel you intend on doing and some other factors. While this is becoming harder to accomplish, it’s still possible if you can demonstrate a significant travel volume, and your ability to control and shift your travel volume to a preferred airline.

Negotiating rates with airlines is, however, becoming an increasingly difficult proposition as airlines consolidate, trim routes and limit discounts to protect their always-fragile bottom lines. It can still be done, but in order to even get an airline to pick up the phone and engage in negotiations, you have to demonstrate a significant travel volume, and the ability to control and shift that volume to a preferred airline. Once you have that foundation, set realistic goals for negotiations based on the scope of your travel program. If you are inexperienced with these negotiations, you might need to use a knowledgeable consultant for their expertise.

Another way to handle these costs is by using a Travel Management Company. What they can provide you, can be all inclusive if that is what you need. They can decide on the class of service employees are allowed to fly on, they are able to negotiate corporate fares with airlines and hotels, and can even how corporate credit cards are used by your employees. For many, if not most companies, travel and expense costs are generally the second highest controllable annual expense facing a company.

The Travel Management Company’s job then is to offer a set of comprehensive services to its clients. They may have the ability to provide you with the best airfares and give you all the tools that you need to manage, to adapt and to advise your travel requirements. Whether their customers are large or small, they can enhance the travel experience and make certain that the business travelers itineraries are successfully met.

Another thing that is important to the companies that provide this service is the customers’ travel management needs. To remain competitive, the best of these companies offer solutions that are reliable, cost-effective, and compliant with local ordinances. However, what generally sets a business apart from its competitors is its customer service. The difference in travel management companies is, of course, their customer service and their scale. Are they local, regional or global and are they innovation driven or technology driven?

There are, as you may have noticed here, many variations of services available in different Travel Management Companies. The only way to really determine which one is best suited to your needs is to do a Google search and either go onto their website or give them a call and talk to them about your needs. Once you find one, you are comfortable with, always get several referrals you can speak with to double check their references. In fact, talk to the company CEO, the owner of the company or their Chief Operating Officer to get to the truth of how effective the travel management company actually is in providing the services that you need.