11 Ways to Reduce Corporate Travel Expenses

With COVID in the endemic stage, work-related trips are expected to bounce back in a big way in 2022. Companies and startups will increase business travel spending to increase revenue. However, they also need to implement cost minimization as a financial strategy to increase return on investment (ROI) on business travel.

As a decision-maker, you can control and minimize your organization’s business travel costs by reducing unnecessary and inefficient corporate travel expenses. However, you also need to focus on keeping employees happy, engaged, and safe during business trips.

Also, you need to ensure that the tactics for reducing corporate travel expenses are not impacting the employees’ travel experience negatively. Here are some ideas and best practices you can implement to reduce corporate travel expenses without affecting the business travel experiences.

11 Ways to Reduce Corporate Travel Expenses without Affecting Business Travel Experience

1. Communicate Travel Policy to Employees

A well-crafted travel policy will help employees understand the reimbursable and non-reimbursable expenses clearly. They can refer to the travel policy to avoid additional expenses and adhere to expense amount limits. 

However, you can make employees comply with the travel policy only by communicating the rules and restrictions unambiguously.

2. Enable Access to a Global Travel Inventory

You can reduce corporate travel expenses significantly when employees book flights, accommodations, and car rentals at discounted rates. However, your business may lack access to build a global travel inventory.

But you can enable employees to access a global inventory of airlines, hotel chains, and car rentals by partnering with the right travel management company. The partnership or investment will ensure that employees book trips at discounted and negotiated rates.

3. Switch to Pre-Trip Preapprovals

Employees often incur unnecessary travel expenses during business trips when they submit expense claims for approval after the trip. This is because they don’t have clarity of the travel policy.

When your travel policy requires pre-trip approvals, employees spend wisely. Also, the approvers can reduce employee expenses by recommending the right airline, hotel chain, and car rental according to your travel policy.

4. Automate Travel Expense Management

The surge in the number of work-related trips will make your finance team process more travel expense reports regularly. This will force you to deploy additional human resources to speed up travel expense reimbursements.

However, you can eliminate the need to recruit and train more employees by switching from paper-based or spreadsheet-based expense processing to automated expense processing. 

Expense automation can be achieved with the help of travel management software. The best travel management software in the market eliminates menial tasks by automating the entire expense management process like expense approvals, expense audits, and expense fraud detection.

5. Eliminate Travel Expense Fraud

In addition to causing revenue leaks, expense fraud always escalates a business’s overall travel spending. You cannot reduce corporate travel expenses successfully without preventing expense fraud of varying types and amounts.

Your organization can detect and prevent travel expense fraud through expense management software. The software detects expense fraud automatically based on multiple factors, including duplicate receipts and policy violations. Also, it informs decision-makers about every travel fraud by sending smart notifications.

6. Encourage Advance Bookings

A traveler can book domestic and international flights in advance to leverage discounted rates. Likewise, they can book hotels early during peak seasons to get better deals. 

Hence, you can reduce corporate travel expenses significantly by discouraging late bookings. At the same time, your organization’s travel policy must make it mandatory for employees to submit travel requests early.

7. Incentivize Travelers to Opt for Low-Cost Alternative

Many companies provide employees with a self-booking tool to choose from multiple options of airlines, hotel chains, and car rentals. Also, they use analytics to suggest the right options to an employee according to your travel policy.

However, you can control corporate travel costs only when employees opt for low-cost alternatives. Your travel policy must create programs that incentivize employees to choose low-cost airlines, hotel chains, and car rentals.

8. Promote Shared or Public Transportation

Sometimes enterprises send multiple employees on the same business trip. In such scenarios, employees can reduce travel expenses by sharing a cab. Also, you must explore ways to convince business travelers to curtail costs by using public transportation instead of private transportation.

These initiatives will help your business curtail corporate travel expenses. But you must not compel employees to use shared or public transportation as the measure might impact their business travel experiences adversely.

9. Set Food Allowances

Most enterprises reimburse the expenses incurred by employees during business trips on breakfast, launch, and dinner. The option creates opportunities for business travelers to spend more on food. 

You can curtail business travel expenses by replacing the expense reimbursements with daily allowances. However, you must keep the food allowance reasonable and accept exceptions to keep the business travel experience intact.

10. Audit Travel Expenses Regularly

You cannot control or curtail corporate travel expenses successfully without finding loopholes in your travel and expense policies. When you audit the travel expense data of employees regularly, it will become easier for you to work on many loopholes in your travel expense policies.

The audit results will help you know if employees are submitting duplicate receipts, forwarding old receipts, exceeding the present allowable limit, or passing personal expenses as work-related expenses. 

11. Leverage T&E Analytics

The new-generation travel and expense management systems come with built-in analytics. The travel and expense analytics help you access and analyze employee expense data in a single location. Also, you can leverage the analytics to understand the types and patterns of travel expenses incurred by employees.

The analytics make it easier for you to check if employees are overspending during business trips or executing expense frauds while submitting expense reports. The software will create opportunities for your business to reduce work-related travel expenses by creating opportunities for negotiated discounts and better deals.

Conclusion

You can reduce corporate travel expenses in several ways. But you must remember that each travel cost reduction tactic will impact your employees’ work travel expenses. You can make work-related trips successful only by implementing best practices that reduce corporate travel expenses without affecting the work travel experience.

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