Almost everything you need to know.
Table of Contents
1. Pre-trip
Travel Policies
Travel Management Platforms
Traditional vs Modern Expensing
2. In-trip
Pre-paid and Virtual Expense Cards
3. Post-trip
Reclaiming Credit
Review and Upkeep
4. Summary
Managing business travel expenses is just one job of corporate travel managers today. But with rising rates of inflation, ongoing industry strikes, and decreasing levels of availability, it is a job that is becoming more and more difficult.
For many businesses, the way in which travel expenses are managed has not changed. Excel spreadsheets dominate finance teams and travelling employees are left out of pocket, waiting for reimbursement. All of this means more time spent manually filing expense claims for the traveller and reconciling receipts for the finance team and travel manager.
Business travel is changing, and so too is the way in which we manage it and its expenses. By taking control of your business travel expenses you can make your life as a travel manager easier, while also simplifying the lives of your travellers and finance teams.
When looking at how to manage your business travel expenses, we find it easiest to segment out the different stages of business travel. Not only does this make it easier to plan your trips, but it will also give you greater insight into where and when you’re spending the most on your business travel – helping you make informed, cost-effective decisions.
Pre-trip
Most of the cost saving changes you can implement come before any travellers have hit the road. By getting things right in this pre-trip stage, you are laying the foundations for a successful journey for all your future travellers.
Travel Policies
For organisations conducting business travel of any kind, a corporate travel policy forms more than just an important part of your duty of care, it can also be used to streamline costs, enhance brand reputation, and provide essential information for employees.
What is a business travel policy?
Simply put, a business travel policy is a set of rules and guidelines that assist your employees as they travel and specify how they can spend company money while travelling. These policies are usually created by the finance manager and travel manager and outline things like how far in advance trips should be booked or if any precautions are required for employees travelling alone.
Why should you have a travel policy?
There are numerous benefits that travel policies provide to your organisation and your travellers. Travel policies allow you to provide clear guidance to your employees and create trust between your organisation and its travellers. Here are some of the key benefits:
1. Provides clear guidance
For employees, work travel can be a minefield of dos and don’ts. Colleagues may wonder what expenses they can claim, how to make last minute cancellations, and what to do in the event of illness. Having a robust policy that’s easy to access allows employees to find information when they need it.
It is important that your travel policy lays out the company’s policy on travel expectations, with no room for misinterpretation. For your organisation, this can also provide protection from certain liabilities.
2. Reduces deviations from corporate policy
Having a robust travel policy makes it less likely that employees will deviate from existing company policies, which can help you with cost savings and potential HR issues. Pairing this travel policy with an online booking system further reduces deviations as most of these travel management platforms, like Roomex, let your travellers know immediately whether a booking will be in or out of company policy. They will also tell you the overall company compliance, showing you if your travel policy is working effectively.
3. Helps with cost savings
No question about it, one of the greatest benefits of having a robust travel policy in place is the cost saving it brings to your organisation. A well thought out travel policy helps you to manage and control spend, while also providing a guideline for expenses and the booking process. This way your business can prevent unnecessary spend and make both time and monetary savings simultaneously.
What should a travel policy look like?
The main thing that your travel policy needs to do is provide your employees with clear guidance on the booking process, health and safety when travelling, per diems, expenses terms and conditions, and other frequently asked questions that relate to business travel.
Before you begin writing your business travel policy you should decide what exactly the goal of the policy is. By deciding the goal of the travel policy you will be able to better structure the content within it. Is your goal to save time or money? Is it for the benefit of employees? Will it provide flexibility for travellers? No matter the goal of the policy however, there are four sections which should always be included.
1. The introduction
When introducing your business travel policy you should explain why you have created the travel policy and the reasons that your business requires employees to travel for work. Start by explaining what you want to achieve with your policy so that there is a clear understanding of what to expect from the pages to come.
Here is where you should also define what exactly constitutes ‘travel’ for your employees. How far do they need to travel to be eligible for expenses? What kind of trips are covered? Branch visits, site visits, events, talks, media appearances, and client meetings could all be included here.
2. Bookings
In this section you should outline who is responsible for booking trips. If you have a specified travel booker, maybe a secretary or finance manager, you should provide their contact details.
If employees are allowed to organise their own travel, this is where you may want to outline how far in advance arrangements should be made, the type of tickets they can book, the amount of luggage covered by expenses, and any preferred hotels or airlines.
If your business uses a travel management tool, here you may want to explain how it works. The benefit of using a travel management platform like Roomex is that it allows employees the freedom to book their own travel, while allowing the travel manager to keep control of spend levels.
Finally, in this section you should set out price restrictions, room requirements, amenities – like breakfast, and any other terms and conditions you want featured in your travel policy. This will ensure that employees stay within budget, while also providing them with flexibility.
3. Expenses explained
This is the section where you explain to travellers what expenses can and cannot be reimbursed. For example, this list might include toll fees, fuel, car rental, transport tickets, and meals. You may want to set limitations to individual expenses such as ‘£20 per meal’ or ‘only taxis hailed for business related purposes are eligible’.
When eating out with a client, how much more can be spent? Also, consider outlining who will pay more when more than one team member is present.
In this section you should also highlight when expenses must be submitted by and how long it will be before they are reimbursed. Explain if paper receipts need to be retained or if they should be uploaded to an app or software program. It’s also a good idea to note which person or department approves expenses to provide full visibility to your travellers.
4. Responsibilities and what to do in case of an emergency
Details of the company’s travel insurance policy need to be included in this section. Explain what kind of medical coverage can be expected if an incident occurs while travelling for business, as well as who to contact and what to do in an emergency.
It is also wise to highlight who is responsible for the expenses incurred after a missed flight or what happens if an employee wants to extend a stay for leisure reasons.
Once you know what information you want included in your company’s travel policy, it is important to consider the format. Your travel policy should be clear, simple, and easy to access. Consider using memorable visuals and a table of contents to help employees find the information they’re looking for. Compliance can be difficult to enforce, so every step you take to make it as easy as possible for your team to follow will increase how compliant your travellers will be.
Travel Management Platforms
Using a travel management platform is often associated with large corporate entities and companies with a global reach, but this isn’t necessarily the case. There are many cost- and time-saving benefits to using a travel management platform even for companies whose travel is entirely domestic.
What are travel management platforms?
For every company there comes a point where it is no longer practical to manage workforce travel manually. With sometimes 20 or more employees travelling at one time, booking, and the expense management that goes along with it, becomes increasingly time consuming. It’s an inefficient strategy that cuts into operating margins and takes up a considerable amount of office manager’s times.
Simply put, travel management platforms help travel and office managers regain control and oversight of their travelling workforce by consolidating all the booking and expense information in one place. They give employees the freedom to book accommodation and travel within a company’s budget while also providing expense management solutions for finance and automated check-in solutions for travellers.
Why should you use a travel management platform?
If you’re currently managing your colleagues’ work travel, you may feel that you have no need to make the change to a travel management platform. Currently you have control and oversight of all your colleague’s travel which can be tough to let go of. However, as your team grows it will become more and more difficult to successfully manage the travel of all your colleagues on the road. By switching to a travel management platform, not only do you retain your current level of control and oversight, but you also gain multiple other benefits which you would not have access to otherwise.
What should you look out for when switching to a travel management platform?
When you make the decision to switch to a business travel management platform it is important to review your options so that you choose the platform that meets your needs best. Every organisation has different needs and every travel management platform is built to cater to these needs differently. Another important aspect to look at is the pricing of such platforms. Once again, the pricing of these systems varies greatly so make sure to find one at a suitable price point for your organisation and needs.
For example, Roomex is a travel management platform which has been built to specifically cater to workforce companies with no sign-up fees or hidden charges. Roomex differentiates itself from other travel management platforms by providing travel managers with workforce-based benefits like reservation checks, in-platform filters like ‘secure parking’, and a purpose built service for group and meeting bookings.
How to get started with a business travel management platform?
Getting started with a travel management platform is easy. Most platforms will offer you the opportunity to have a free live demo, and some even provide demos that you can watch on their website. Once you have watched a demo and have chosen your preferred travel management solution, the onboarding team will make your life as easy as possible in getting you started.
Traditional vs Modern Expensing
Expense management is a cornerstone of efficient business operations, particularly in the realm of corporate travel. Yet, the traditional methods of managing business travel expenses have far-reaching implications on the physical and mental health of employees, as well as the financial health of organisations. This traditional process has become burdensome for both employees and employers, leading to inefficiencies, financial strain, and reduced well-being. In response to these challenges, a transformative solution has emerged: travel allowances.
The burden of the status quo
Traditional expense management processes, characterised by manual reporting and reimbursement delays, have taken a toll on employee health and organisational efficiency. Business travellers, in particular, face a myriad of physical and behavioural health risks, from stress and sleep interruption to unhealthy eating habits. Moreover, outdated expense management systems contribute to unnecessary stress and anxiety, further exacerbating the negative impacts of business travel. This has resulted in business travellers reporting higher body mass index scores and further health issues such as clinical symptoms of anxiety; depression and alcohol dependence; no physical exercise; smoking; and trouble sleeping. All of these factors add up over the long-term, having a serious impact on traveller health.
But it is not only employees who are feeling the impact of traditional expense methods, organisations too have their health compromised by traditional expense management methods. These traditional processes increase the burden on organisations and can be damaging to the company's long-term financial health considering the levels of fraud and non-compliance associated with traditional expense management methods. As one of the most prevalent types of employee fraud, expense fraud costs businesses 5% of their total revenue annually and over £3.5tn worldwide.
The status quo in expense management isn't good enough for the modern business. It has numerous negative impacts for both employees and organisations. But all is not lost.
The modern solution
Enter travel allowances—a paradigm shift in expense management that offers a fresh approach to addressing the challenges of business travel. Travel allowances simplify the expense reporting process by providing predetermined funds to employees for business expenses during trips. With virtual allowance cards and real-time expense tracking, travel allowances offer a streamlined solution that benefits both employees and employers. This significant enhancement to the conventional expense management process removes the need for travellers to dip into their personal finances while on work-related trips, not only preserving their personal funds, but also eradicating the cumbersome waiting period for reimbursement. In the context of the increased financial strain currently facing business travellers, this change provides substantial relief, alleviating a major source of stress associated with business travel.
Organisations can use allowances to promote healthier spending habits in their travelling employees. By leveraging real-time insights into employee spending patterns, companies gain visibility into how employees are spending their allowance, particularly in terms of meal allowances. Armed with this data, organisations can proactively encourage their employees to make healthier dietary choices. This not only fosters a culture of health and well-being but also contributes to increased productivity, as healthier individuals are generally more focused and energised.
Beyond the immediate benefits of providing a more favourable and healthier experience for business travellers, allowances offer multifaceted organisational advantages that extend to fraud prevention, travel policy enforcement, and administrative efficiency. The dual benefit of enhanced employee health and a strengthened employer-employee relationship underscore the profound positive impact that travel allowances can have on the overall work experience and the long-term health of an organisation.
In-trip
While the pre-trip changes you have made to date will have started your saving, there are still changes you can make to your in-trip travel processes that can add to your cost savings.
Pre-paid and Virtual Expense Cards
As we already discussed, reviewing your company’s expense process is one way which you can begin to add to your cost savings. One way to simplify your organisation’s expense process is to provide your employees with pre-paid or virtual expense cards for their travel expenses.
What are pre-paid and virtual expense cards?
At first glance, a pre-paid card looks like any ot
er payment card. On the back you’ll find the same magnetic strip and three-digit code that you would find on any other payment card. But as the name suggests, these cards are pre-paid. This means that the card is pre-loaded with a specific amount of money, and you cannot spend even one cent over. Similarly, virtual expense cards provide employees access with the same, limited funds. However, this time the card is stored virtually on their phone and can be deleted once its use has been fulfilled. Both types of pre-paid cards provide employees with the ability to spend without going out-of-pocket, while allowing the travel or finance manager to remain in control of expenses.
How do pre-paid and virtual expense cards work?
Pre-paid and virtual expense cards are easy to manage and use. Simply put, you give a card to an employee or department, load it up with however much money they require, and set limitations to control their spending. Employees then use the cards to make purchases. Cards can be topped up daily, weekly, monthly, or quarterly, and if necessary, frozen and cancelled within seconds. From the back-office end, you are able to get real-time visibility into all transactions, enabling you to make better cost saving decisions.
What are the benefits of virtual expense cards?
Pre-paid and virtual expense cards provide your employees with all the same benefits of a debit card, but there are a few additional benefits to virtual expense cards which you may not have considered previously.
1. Helps prevent fraud
The most obvious benefit to virtual payment cards is that they can’t be lost or stolen like a physical debit card, making them far more robust against fraud and cybercrime. If you do end up noticing some suspicious activity, they are also much easier to cancel than a typical debit card. However, the key benefit here is their resilience against e-commerce fraud. When an employee makes a transaction, a one-time number is provided to help identify them. This has proven highly effective against credit-card fraud and is one of the key reasons why businesses are moving over to them.
2. Highly convenient
For employees, anything that saves time, administration, or stress is a huge benefit, and virtual expense cards tick all those boxes. They offer a highly convenient option for tracking expenses 24/7, and since they are always accessible via a mobile digital wallet, they can be used anywhere, at any time, to make a payment. Additionally, unlike using personal credit cards, employees are never left out-of-pocket, waiting for expense reimbursements to be processed. This also saves finance time when processing expense claims!
3. Companies can set limits and stay in control of spend
For your business, equipping employees with virtual cards is a great way to track employee spend and keep on top of cash-flow. Most virtual payment cards have been designed with businesses in mind, so they allow companies to customise limits and track spend in real-time. For example, the RoomexPay card allows businesses to limit cards to certain dates and times with allowance options, useful for business trips and trade events. Overall, this can help with better internal transparency in the expense process!
4. Takes the admin out of expenses
There’s no excuse for late expenses and lost receipts when employees use virtual payment cards. Payments can be tracked digitally with all the necessary virtual paperwork in one place. This can massively speed up the expense process for all parties, and relieve administrative stress, while keeping track of expenses.
5. Manage subscriptions and memberships
Keeping control of cross-company spending has never been easier. When virtual cards are used for subscriptions, advertising, or memberships for instance, you can track if a merchant overcharges you, press pause if you’re on holiday, or cancel the service in a matter of clicks. This puts users and finance managers back in control of spending in an easy and transparent way.
Post-trip
Your cost saving opportunities don’t end once your travellers return from their trips. While the travelling may be over for now, there are still some key opportunities for you to make further savings.
Reclaiming Credit
Travel managers may strive for perfection when organising travel for their colleagues but, no matter how much planning you put in, things will still go wrong from time to time. Reclaiming due credit allows you to make the best of a bad situation and can add to your cost savings.
Why you should be reclaiming credit.
Train strikes and short-staffed airlines have all impacted the way we travel, but they don’t have to impact our costs as well. As a travel manager it is important to be up-to-date on what you can and can’t claim back in cases of delayed or cancelled transportation. For example, many train services offer full refunds if trains are cancelled and partial refunds if trains are delayed by more than half an hour. Similarly, airlines have a number of legal obligations to uphold as well.
How do you reclaim due credit?
Reclaiming due credit is usually a straightforward process, however this can depend on what transport service you have used. Most transport companies will outline their compensation options on their website and provide you with the materials and links you need to process a claim. If these pages are not present you are best off speaking to a member of their support team directly. Before speaking to a member of support we recommend that you research what compensation you are entitled to so you know exactly what to expect. Rules for airlines vary depending on your location so it is best to research the specific legal obligations of airlines in your area.
As a travel manager, and as a traveller, it is important to be vigilant about delays and apply for any potential refunds you may be due. This also means having the right travel insurance in place, to protect your business against unnecessary costs.
Review and Update
One of the aspects of travel management and cost savings that is not spoken about as often, is the necessity to review and update your policies and processes. Having implemented these cost-saving suggestions, it may be tempting to think you are finished and relax a little. However, the world of business travel is always evolving and so too are the best cost saving methods.
How often should you review?
Your policies don’t need to be reviewed every time a colleague is travelling but it is good to have an established process where you review your travel and cost saving methods, be it quarterly, bi-annually, or annually. This can help ensure that you are staying on top of the most recent innovations in the business travel space and allows you to take advantage of the latest cost saving methods.
Summary
The travel management process is complex, demanding, and ever-changing. It’s for this reason that finding new time-saving methods and ways to curtail unnecessary spending is so important. By reviewing your current travel processes at the pre-trip, in-trip, and post-trip stages, you should be able to identify gaps that will improve your current processes. Implementing some of the above strategies is one way to futureproof your travel budget and ensure that colleagues continue to succeed in their jobs and enjoy the business benefits that only come with face-to-face interaction and business travel.
