According to the Global Business Travel Association, Travel expenses are expected to rise in 2016. In many organizations, T&E is the 2nd largest line item in your budget after salaries. In some cases, out-of-date business processes may only reflect 60% of your employees’ Travel & Expense spend.
If this is true for your business, then you know there’s an opportunity to trim expenses and you need to find a solution. What’s the solution? The key lies in understanding where your expertise is within your own business and then aligning your organization with a Business Process Services partner with travel management expertise. A Travel Management Company that focuses on travel leadership will provide the support you need to get your budget out of the red and here’s how:
Combating Rogue Travelers
When employees book their own travel arrangements it takes time away from the work they’re paid to do. Some sources say it can take a minimum of two hours to book flights and hotels and this decreased productivity costs the company time and money. To complicate things further, rogue travelers often use their personal credit cards, which can mean the organization misses out on data security, rewards and other opportunities for cost savings.
Then, there are the lost receipts, the amount of time spent reconciling expense reports after the fact and the loss of bargaining power when it comes to airlines, hotels and car rental where it’s less expensive to buy as a group than as an individual…it’s clear there’s a big opportunity to lower costs with improved travel management.
A TMC can help gain control over fees. One way a TMC can do so is by implementing an online booking system that prepays some expenses and improves receipt tracking.
Getting Control Over Fees
You also know that if you could get control of airline ancillary fees, you’d have the opportunity to see what is being spent where and by whom. Today’s airlines offer premium economy, business class and first class. Which align best with your corporate culture? Additionally there are baggage fees, change fees, meals, and Wi-Fi among other fees that eat into your profits.
A travel management company can help analyze your corporate spending patterns, your current purchase processes and how well your staff complies with travel policies. It can also help automate and prepay many expenses, so there are fewer surprises after the trip. Such business process services will help you achieve company goals of improving profit.
More Travel Policy Compliance
Chances are your travel policy outlines clear guidelines around your preferred suppliers, travel class, and process of booking among other concerns.
Yet, do all of your employees adhere to this policy? Do they know about it and how to follow it? Or are their expenses unpredictable, at times inefficient and subject to liabilities? When employees are left to their own devices to make their travel arrangements, they can be based on very individual concerns that can quickly add up.
An improved travel management process ensures that an easy-to-use, online booking system will keep better records, so you know who is adhering to policy and who isn’t. In some cases, your employees may not even be aware of the travel policy.
A TMC makes compliance easier because the business processes are smoother and everyone is clear on the travel policies. Up-to-date technology makes booking and prepaying simple. It reduces waste and unpredictable expenses. It can also speed up reimbursements, shortening the time from weeks to just 48-72 hours.
We realize investing and maintaining a T&E solution can be challenging. After all, you want to know that you’re getting the best value and that you’ll be able to get employee buy in among other concerns.
Luckily, an experienced travel management company can actually help you gain access to better rates, there’s less administrative work on the part of the organization and many employees prefer the easier online booking systems.
All of this leads to you discovering more revenue that was formerly lost in the margins. One question to ask yourself is, are you budgeting $5 million or less for T&E expenses in 2016? If so, our 2016 Whitepaper Trends in Travel should help. You’ll find answers to your questions about mobile technology, automated payment systems and more.
Learn more! Read 2016 Trends in Corporate Travel Management for the SME Marketplace.