Experts all over the world are now heavily speculating that by the end of 2024, the corporate travel industry will recover to pre-pandemic levels. This forecast is supported by a recent poll done by Booking.com, which also implies that small firms are expected to increase their spend on business travel compared to larger companies. This contrast shows the relevance of having a managed travel program for smaller firms to streamline travel management and control spending.
Switching to a managed travel program entails either adopting a travel management system or outsourcing to a vendor that can handle all elements of corporate travel, from planning to reimbursement.
What’s managed travel?
Managed travel is when a corporation implements a travel solution or outsources travel management for all its business travel operations. The travel solution manages all corporate travel requests and bookings, allowing the business to concentrate on its core operations. Teams can also handle travel expenses, advances, and reimbursements on one platform, simplifying complete transportation and expense management.
Unmanaged vs. managed travel
When it comes to managing business travel, smaller businesses tend to lack standardized practices and structured policies that can guide the employees when booking their travel and reporting related expenses. This lack of streamlined approach leads to having little to no control over travel bookings and expenses, thereby increasing costs, and the risk of expense fraud. This is commonly known as an unmanaged travel program.
As the team gathers data for reimbursement through various sources, tracking, monitoring, and scrutinizing these reimbursements becomes difficult.
Managed travel, on the other hand, lets firms manage, regulate, and analyze travel reservations and spending with the help of a software to create cost-effective travel policies.
Why do small businesses require managed travel?
Some the most common reasons to travel include, client meetings, office/branch visits, team building activities, training and development, tradeshows and events.
In a recent survey, 95% of respondents agreed that in-person events assist in accomplishing corporate objectives. Small businesses specifically focus on event marketing to build their network.
A managed travel program in this scenario is a must-have rather than a good-to-have. It allows teams to build automated workflows (criteria-based auto-rejections and auto-approvals) and will enable companies to enforce all rules through a one-time configuration. The absence of follow-up hassles or critical violations can help companies focus on core business activities improving overall productivity.
Travel Policy Creation
Small businesses need to enforce a travel policy that optimizes expenses. The most important factors to establish when building a travel policy are:
- Expense types: Clearly define the types of expenses that are eligible for reimbursement
- Per diem allowances: Establish per diem allowances as per government regulations, or the company policy.
- Expense categories limitations: Set expense limits for each expense category to ensure you stay within the overall budget.
- Approval workflows: Create a well-structured approval workflow to ensure that every expense is verified.
- Corporate card expenses and limits: Depending on the employee requirements, status, and allowance, set credit card limits for their business travels. While processing credit card expenses, ensure that the right approvals and processes are in place to avoid fraudulent expenses.
Additionally, when creating an employee travel policy, setting down rules, guidelines, and strategies to build a successful travel policy for the company is a must. Businesses can consider addressing the following questions first to create a comprehensive travel policy:
- Why is it necessary to travel?
- What is the purpose of the trip?
- Who will be travelling?
- Where will they be travelling?When will they be travelling?
- How will the travel be managed?
For detailed tips and instructions, here’s a guide to creating an effective corporate travel policy to increase compliance.
As against opting to outsource travel management, investing in a travel management system enables small organizations to control expenditures, reservations, regulations, policies, and standards while tracking all information and actions of the employees during the trip. It also enables businesses to make smart choices, monitor expenses, and schedule efficiently while increasing business travel ROI.
Enforcing Policy Compliance
Without the enforcement of rules, an ideal travel policy is pointless because the management team of a small business is bound to cope with resource limits. This one aspect makes it hard to implement business policy across divisions, seniority, and projects.
A travel management system notifies users and administrators of policy violations, prevents them from filing expense reports that exceed category limitations, and reminds them to attach receipts. This automatic notification and control function lets travel teams concentrate on creating efficient travel processes and negotiate better vendor discounts instead of following up with employees.
Analysis and Strategic Planning
Regardless of the size of the business, every company prioritizes spending in the right areas. Analyzing employee spending over time for all corporate travel yields statistics like:
- Cost of cancellations and rescheduling,
- Expenditures per mile driven,
- Cost overruns,
- Preferred payment methods and
- Other travel-related costs
Moreover, an integrated travel management system that connects with the company’s technology stack also helps collect and analyze data one step further. Integrations ensure visibility across business travel expenses towards projects, customers, services, and more.
The Takeaway
Small businesses have specific goals owing to resource constraints allowing them to focus on specific things at a certain time. As travel management is a supporting role to all critical business activities, it becomes necessary for small businesses to establish an efficient managed travel program. The right solution, for which, is a powerful travel management tool such as Zoho Expense.
With Zoho Expense, a scalable end-to-end travel and expense management solution, businesses can set up travel policies, enforce policies across departments and seniority levels, facilitate self-booking and offline booking options for all travel arrangements, and analyze travel data to optimize strategically.
Find out how Zoho Expense can benefit your small business: Try it for free now!
