If business travel is part of your company’s cost of doing business, it may be costing you way too much.
In 2015, the number of US business trips made amounted to a staggering 485, 000,000; that’s nearly a half billion trips! The estimated cost of those trips…more than $300 billion. Costs for travel, hotels, and car rentals are constantly changing and since purchasing of travel is too often decentralized, the ability to calculate whether potential savings are being made or lost is lessened. In fact, when it comes to overhead, business travel is the largest controllable line item after salary and IT.
For companies with facilities throughout the country and the globe, tracking and paying these expenses can test even the best of companies. That’s why many companies are now looking for travel management providers who can help them not only save on purchases, but also provide data to enable companies to make smarter business decisions when it comes to travel. Companies that go it alone can end up paying 15-27% more than those who work with a travel management company. And the savings aren’t just in money, there’s also the amount of time that employees spend searching for travel and lodging either on multiple websites or on the phone with travel agents.
A PayStream Advisors 2015 survey asked respondents what the biggest challenges were when it comes to travel management. For larger companies, the top issues are an increase in T&E expense and the inability to enforce T&E policies. That makes sense since larger companies usually have more employees that travel. For SMBs, however, the biggest issues are lack of visibility into spend, and the biggest by far is manual data entry (51% of smaller companies that responded felt this was the major challenge they faced).
If you can afford to have your employees spend time on non-value added tasks like getting prices or making reservations rather than focusing on issues that will assist in company growth, stop reading. However, if you agree that this is not the best use of company time and if your organization has a considerable amount of travel, you should think about working with a travel management company (TMC). TMCs not only handle all of the administrative work and get the best prices possible, they also provide 24/7 visibility into your company’s spend as well as business intelligence and advanced analytics that will help you forecast future travel costs and plan accordingly.
An ongoing problem with travel management is the same as with other indirect procurement. There is of course, the decentralization I spoke of above, but there is also the difficulty in ensuring compliance, in both price and terms, from multiple airlines and hotels. TMC’s utilize automation to validate and guarantee all agreed-upon pricing and discounts. But the advantages don’t have to end here. New services offered by some companies provide full purchase to pay automation which provides a single monthly invoice to the company that includes all booked travel broken down by employee simplifying billing reconciliation for accounts payable.
Cutting costs, increasing efficiency, utilizing employee time more effectively…you’ve probably been working to achieve these goals for all of your organization’s operations…now it’s time to do the same for business travel.