Corporate travel management
The whole world went remote, and a pandemic took over. But mere months later, global business travel was on the rise again. This showed us that corporate travel is here to stay and managing it is going to be harder than ever.
In 2021, World Travel and Tourism Council claimed that 20% of all global tourism spending came from business travel. Even the pandemic could not slow it down. This is probably because even in the age of virtual reality and metaverse, nothing beats the familiarity of face-to-face interactions.
As rapid growth grips businesses, the corporate bubble for every company expands. The need for business travel thus amplifies, and the challenge that is corporate travel management surfaces.
Do you want to know how you can tackle these challenges? In this guide, we will explain what corporate travel management is and how you can benefit from it.
What is corporate travel management?
Corporate travel management is the process of organizing all business travel-related functions of a company, including scheduling, reimbursements, travel data management, pre-trip and post-trip expense management, compliance, etc.
Business travel management aims to optimize business travel processes by establishing a policy-backed travel infrastructure. The main aim of corporate travel management is to simplify the pre and on-travel experience for employees and save money for the business by cutting down on false reporting, misspends, and overstatements.
Why do businesses need an efficient corporate travel management process?
Businesses are always looking for ways to optimize their processes. Efficient corporate travel management not only streamlines the travel expense and reimbursement structure but also enhances employee experience. Here are three additional reasons why businesses need efficient corporate travel management.
Systemized travel management infrastructure significantly reduces the vital employee time spent on the tedious filing of expenses. This, in turn, increases employee productivity and indirectly contributes to higher ROI per employee.
b) Faster processes
When you adopt a corporate travel management platform, those unending email threads and unanswered calls go out the window. It not only obviates the need for external trip-related communication but also provides a more transparent channel.
c) Happy employees
Employees bear the brunt of traditional travel and expense management systems. They must constantly save receipts, justify expenses, and chase after approvers to get their money back. Owing to the inefficiencies in the system, the reimbursements get delayed.
A good travel management system can help the employees focus on their primary jobs and not worry about travel itineraries and policy violations.
How do corporate travel management systems work?
Corporate travel management systems supervise, organize, plan, and coordinate the entire travel structure of specific or multiple business trips. The three common types of corporate travel management systems are travel management company (TMC), in-house travel planners, self-booking travel systems and corporate credit cards.
1. Travel management company
Businesses often outsource travel planning to TMCs. They have expert travel agents who take over and simplify the planning process. Travel consultants have the contacts and travel industry know-how to get you the best deals. They can also advise your organization on the best ways to ensure traveler safety.
2. In-house travel planners
Some companies, especially small businesses, have in-house travel admins who make travel arrangements for all employees.
3. Self-booking tools
For large businesses, employees do their own travel planning. They initially book the tickets, accommodation, etc., and then file for reimbursement.
4. Corporate credit card
Some organizations allot corporate credit cards to their employees. These cards eliminate the tedious reimbursement process altogether and increase spend visibility to almost 100%.
Happay’s self-booking tool Happay Travel simplifies travel planning for employees. It comes with policy violation alerts and pre-spend controls that help maximize savings.
Read also – A Guide to Travel and Expense Process
What is the travel management process?
The corporate travel management process comprises a set of tasks that optimize the business travel cost and experience. Let’s look at the specific tasks that are crucial to the process.
1. Travel request
In the first step, the employee has to submit a travel request to his manager or superior. A travel request should include the date of travel, destination, mode, purpose and duration of the trip. It is also crucial to detail the estimated budget for the trip, necessary advance amounts, accommodation needs, transportation, etc.
The superiors then have to review the validity and necessity of the travel request. Depending on their analysis, they can accept, reject, or request changes in the travel plan. If the request gets accepted and requires an advance, this is the stage at which the money is disbursed.
2. Travel planning
Unlike leisure travel, business travel requires judicious use of resources. Business travel planners must ensure that the trip is planned to maximize savings.
The travel planning phase starts when the travel request has been approved. Depending on the organization, either the travel admin, travel agency, or employee executes this step.
During this step, you have to plan the travel itinerary of the employee. The travel plan should be comprehensive and include the following things.
- Flight and hotel timings
- Intercity transport
- Day-wise budgets
- Client meetings and gifts
- Authorized and unauthorized trip expenses, etc
3. Travel expenses
On any business trip, the employee incurs pre-trip, post-trip and on-trip expenses. In the traditional travel expense management method, the employee has to save all the receipts and bills he paid for during the business trip to file for reimbursement later.
4. Travel expense report
After the trip, the traveler has to submit a travel expense report to the finance department to get reimbursement. This report should contain a list of all the authorized expenses the employee incurred during the trip.
An expense report should also contain the dates on which the expenses were incurred, the name of the vendor/payee, the expense category, the total amount paid, etc. Employees must support their expense claims with relevant proof, like receipts and invoices.
5. Travel expense approval
Once the employee submits the report, the manager or supervisor must approve the expenses after checking if all the purchases comply with the company’s travel policy. Once the manager approves the claim, the finance department disburses the amount to the employees.
However, in many organizations, travel expenses require multiple approvals from the managers and the finance teams.
6. Travel reimbursement
Once the expense claim is approved by all relevant parties, the organization is ready to disburse the reimbursement funds to the employee. The reimbursement process can sometimes take a long time, much to the discomfort of the employees. Hence, it is advisable to automate the above processes as much as possible and speed up the process.
Challenges of corporate travel management
Finance officers of big companies tackle one of the most dynamically complex organizational functions with travel management.
From devising an exhaustive travel and expense policy to executing it- they deal with too many variables that are impossible to control solely through human efforts. Additionally, they deal with dishonest employees, information gaps, and varying degrees of the leniency of the approvers.
1. Misreporting of finances and expense fraud
A significant part of traditional travel and expense management rests on employees’ honesty. Since the mechanisms to verify expenses are weak, employees can overstate costs without being caught.
One of the biggest roadblocks to effective travel management is the lack of transparency, which directly contributes to the company’s monetary losses. The solution to this problem is establishing a spend management system that simplifies accurate verification of expenses or enables real-time expense tracking.
2. Information gaps in travel policy
Specificity in the travel and expense policy of a company is crucial. However, drafting an all-encompassing policy is tricky for companies that tackle thousands of trips every year. What is more problematic is communicating this policy to all the stakeholders. Lack of clarity on approval hierarchy, spending limits and authorizations can confuse and lead to conflicts.
3. Expected cost reductions
As if tracking, organizing, and managing all company travel is not enough, the finance teams are also expected to minimize the overall travel costs of the companies as much as possible. These cost reductions are hard to bring- what with the rising travel and accommodation expenses. To top of the sky-high travel rates, over-reporting payments and occupational frauds further drive up overall travel spending.
Traditional travel expense management does not offer solutions that can help forecast, analyze and reduce travel costs. The data repository used for analysis is either non-existent or non-exhaustive. As a result of this low transparency, businesses experience money leakages and budget exceeds.
4. Wastage of time and resources
Inefficient travel management leads to a waste of employees’ time and resources. Before the trip, a lot of time gets wasted in the planning process. Communication becomes a tedious task when there are multiple approvers.
On the trip, it gets difficult for the employees to collect all the receipts and accurately record all the information. The post-trip phase becomes more difficult because of confusing reimbursement procedures and lengthy payment cycles.
5. Decentralized and contaminated data
Travel expense processes traditionally rely on the data supplied by employees, vendors, and managers. When all of the data is entered manually, the chances of inaccurate inputs increase. As a result, the final database is contaminated with errors and may lead to erroneous decisions.
All of the above issues add more burden upon the finance team. Manual and repetitive travel expense operations use up their valuable time and plunge them into an unwinnable war against a failing system.
Read also – 6 Best Travel and Expense Software
9 steps to simplify the corporate travel management process
1. Analyze your current travel management process
Audit your travel management workflows and analyze past expense reports. Identify the processes that cause minimal cost leakages and the ones that cause minimal savings.
2. Understand the user priorities
Travel management is a complex process for large organizations. The number of stakeholders is large and different users have different priorities. Employee travelers prioritize faster reimbursements, while managers prioritize easy approval processes and transparency. The finance officials, on the other hand, prioritize security and validation above all.
3. Deploy a self-booking system
A self-booking travel tool allows employees to book their flight tickets, hotels, car rentals, etc. on a single tool. It allows employees to have control over their travel plans. Online booking tools also minimize the number of hours wasted on approvals and expense authorization.
4. Streamline communication
Inefficient communication methods like emails and phone calls can cause a lot of confusion in the travel management process. Try to opt for a tool that can be used specifically for travel-related communication.
A business can take steps to ensure that they don’t face the mentioned issues.
5. Devise an exhaustive travel and expense policy
A business travel study reports that 40% of businesses still don’t have a travel policy. An exhaustive travel and expense policy can help ease the process of approval and validation by eliminating ambiguity in the system. Ensure that your travel policy covers all travel-related workflows, authorized and unauthorized expenses, communication channels, etc.
6. Communicate policies to employees
The next step is to ensure that all the stakeholders understand the travel and expense policy. This will avoid future conflicts and increase employee accountability.
Tell your employees which expenses are valid and which are unauthorized. Explain the details of policy non-compliance to them and the penalties they can incur for not sticking to the travel budget.
7. Track and record company expenses
Tracking and recording all travel expenses can help you create comprehensive reports and draw important finance-related conclusions. An accurate history of company expenses can help you
to make smart budgetary decisions.
8. Use past spend data to negotiate better deals with service providers
Analyzing past spend data can tell you which vendors and service providers you do business with frequently. You can use this information to negotiate better deals with service providers and increase your savings.
9. Automate expense reimbursement processes to save time and prevent expense fraud
Corporate travel management comes with a set list of complicated problems. However, technology has stepped up in the past few years and proposed digital solutions that laser-tackle these problems. Corporate travel management solutions have emerged as the perfect companions for CFOs and finance teams.
What is corporate travel management software?
Corporate travel management software is a digital platform that simplifies enterprises’ travel and expense management processes. Also known as travel and expense management software, it leverages the power of automation to streamline the most complicated operations.
Top 5 corporate travel management software
Happay is an integrated travel and expense management platform that can be customized according to your needs. It offers lucrative tools like automatic GST module, missed savings alerts, TMC integrations, etc.
Zoho expense is a travel and expense management software that offers features like expense report management, expense reporting automation, receipt management, etc. It simplifies approvals and reporting and accelerates reimbursements for the employees.
3. Travel Perk
Travel Perk is an expense management platform you can use to optimize your corporate travel management process. It offers unique features like VAT recovery, carbon emission control, and travel risk management and is one of the most sought after travel management platforms in the market.
Coupa is a business spend management platform that leverages automation to streamline travel expense workflows. It also offers intelligent insights into travel data and enhances travel-related decision-making.
Egencia is a new-age travel management software that uniquely personalizes the business travel process. AI and automation back Egencia’s tool to provide users an intuitive travel management experience.
Read also – 10 Best Travel Management Software
Benefits of corporate travel management software
A corporate travel management software digitizes and automates processes and, in turn, reaps the following benefits for business travel.
- It provides a strict structure to the company’s travel and expense policies
- It digitizes the expense reporting and reimbursements process, helping build a data repository that can be later used for review, audit, or analysis
- It helps standardize certain travel rules for the entire team by mandating specific workflow tasks
- It makes the reimbursement process transparent to both the employees and the finance department.
Majorly, corporate travel management is dependent on three parties: employees who file the expenses, managers who approve the costs, and the team that handles them.
Ultimately, the corporate travel platform acts as a link between the three parties. It negates the need to discuss and plan trips over other channels and centralizes all data and information needed for decision-making at various levels.
1. Financial efficiency and accuracy
Corporate travel management software automates workflows and streamlines a large chunk of expense filing and reimbursement. Automation reduces chances of error by minimizing human intervention and saves hundreds of employee working hours each month. Automation also helps standardize data and minimizes contamination of travel-related financial data.
2. Pre-spend Controls
Corporate travel management software allows you to limit spending for employees at different levels of pay grade. Pre-spend features help organizations encourage policy-compliant spending behaviour from employees. You can determine what kind of flights, seats, benefits and hotels can be booked.
Pre-spend controls can also include missed-savings alerts curated with the context inputted by employees. These alerts offer cheaper flight suggestions at the time of booking and further increase savings.
Many parts of the expense filing, budgeting, reporting, booking, and reimbursements are repetitive and do not require human intervention. The right travel management platform should have the ability to automate these parts.
4. Digital audit trail
Internal audits can help finance officers detect and eradicate bottlenecks in the system. Travel management software digitizes and centralizes data making it easier for the finance team to conduct audits.
5. Customizable approval workflows
The hierarchy for travel expense approval differs in every organization. Even within the organization, some approvals have to be cleared by multiple people to go through. The right travel management software allows you to customize the approval workflow for different types of travel.
6. Integration with existing systems and policies
Adopting a new system is challenging, especially when numerous management infrastructures are already in place. When selecting travel management software, it is crucial to ensure that it is integrative and compatible with the company’s existing HR software or ERP.
7. Customizable reports
Corporate travel management software has features that allow the prompt creation of graphics and reports. These reports enable a seamless analysis of travel expense data and give the finance team sufficient insight to make budgeting decisions.
8. Categorized analytics
Travel management systems can offer you location or branch-specific expense reports. You can categorize data based on department, city, and even project. You can compare data from various reports and understand how the different teams perform.
9. Vendor management
A business travel management platform can provide a complete overview of vendor-related information. You can keep track of the spending frequency and the number of purchases made from specific vendors. This information can help you negotiate subsidies and discounts and further cut travel-related costs.
Choose innovation with Happay, the perfect corporate travel management platform
If you want to save on costs, increase policy compliance, improve employee satisfaction levels and give your organization a hassle-free alternative to traditional travel management, try Happay’s end-to-end T&E solution. Happay offers intelligent automation solutions for all your organization’s travel needs. Schedule a demo with the Happay team to know more about their features.
Corporate travel management – FAQs
1. Is it wise to invest in corporate travel software?
Yes, corporate travel software is a good investment for businesses that invest in corporate travel frequently. For large businesses, corporate travel software is especially important.
2. What are the different types of corporate travel management?
Businesses can have any of these three corporate travel management systems: in-house travel managers, travel agencies, self-booking tools, or travel management software.
3. What are the different types of business travel?
Business travel includes client meetings, site visits, conferences, company retreats, trade fairs, etc.
4. What is the difference between corporate travel and business travel?
There is no real difference between corporate travel and business travel. They are two terms you can use to describe work-related travel activities.
5. What is the meaning of the acronym CTM?
CTM stands for corporate travel management.
6. What is the main goal of CTM?
The main goal of CTM, or corporate travel management, is to minimize business travel costs and simplify and accelerate the reimbursement process.