Common business travel expense issues to avoid
According to data from FCM Travel, optimising travel and expense management is a priority for over 75% of business heading into the new year. But managing business travel expenses can be a headache, especially when there are inefficiencies and gaps in your travel program. And with everything else going on in your business, let’s not make work any harder. Here's how you can avoid some of the most common traps we see:
Manual handling
Issue: Manually handling business travel expenses leading to human error and wasted time. Leaving finance team with more and more admin burdens, when they could be doing something more useful.
Solution: Enter a travel management company (TMC) trading account or central travel account. With these options, travel expenses are automatically tracked, reported, and reconciled in one tidy spot, giving you full transparency. No more chasing down paper receipts crumpled in your traveller's pockets or manually entering expense claims. A TMC can take it one step further by managing all travel expenses upfront and then sending one consolidated invoice at the end of the billing period. Both these solutions are known to reduce errors, speed up the approval process, and provide a central platform for managing and reporting on all travel expenses.
No spending cap
Issue: No spending limits making business travel expenses spiralling out of control. One business class flight here, a five-star hotel there, and suddenly your business travel costs are through the roof (yikes!).
Solution: Rein it in with a travel expense policy. You can put in place clear spending and rating caps or even choose preferred brands for flights, accommodations, and more. Once established, most TMCs can join the united front and should be able to integrate these policies directly into their online booking tool, further supporting compliance and helping keep a lid on unwanted costs.
Multiple ways to pay
Issue: Too many payment options creating confusion and complicating things for everyone.
Solution: Keep it simple. One streamlined payment method is usually best (and it might not be the one you're currently using). It could be traditional plastic credit cards, central billing accounts, or virtual credit cards. Each has its perks and challenges. The trick is to choose the option that works for your people, their business trips, and the overall corporate travel management processes. Check out some options here.
Not considering exchange rates
Issue: Fluctuating exchange rates throwing out international travel making it hard to predict and manage business travel expenses.
Solution: The best way to overcome this is to bundle book. Lock everything down as soon as those business trip flights are booked so you can secure the rate at the time of booking and know what you're up for. This means accommodation, cars, transfers, and dining (if you can get it as part of the hotel booking).
Lack of partnerships
Issue: No partnerships in all the right place. Airlines, hotels, rental cars, and more, leading to missed discounts, perks, and streamlined services.
Solution: Reach out to suppliers, negotiate, and lock in contracts. These contracts can be integrated into a TMC’s online booking tool, so rates and conditions carry over. If this is a bit ambitious, engage a TMC and leverage their network—they've already done the hard negotiating for you. These types of partnerships generally translate into savings and added value for your corporate traveller, like upgrades or additional amenities.
Poor visibility and oversight
Issue: Lacking clear data visibility into your business travel creating all sorts of challenges to managing budgets, spotting trends, and making data-driven decisions.
Solution: Third-party travel management software can help consolidate everything into one spot. Or a TMC can offer one central location for all users, to make bookings and provide reporting and analytics that provide real-time insights into business trip movements. Reports typically include spend, duration, traveller wellbeing, sustainability, and compliance. And can sometimes integrate into third-party expense management software to provide a clearer picture of what is taking place within your travel program.
Unable to sync expenses with policy
Issue: Travel policy that doesn’t sync up with spending habits, creating non-compliance and overspending.
Solution: This is a tricky one to navigate on your own. No matter how many times you communicate the policy there will always be people who don’t read or process it. A TMC can step in here and make sure all bookings and expenses automatically adhere to the company’s travel policy. By integrating the policy into the booking process, a TMC helps (more like forces but that sounds bad) business travellers or bookers to make compliant choices. Reducing the risk of overspending, expense fraud, or even personal expenses slipping into the claims process.