International businesses have dramatically grown in scope due, in part, to the number of business trips taken. Although travellers plan over 480 million business trips a year, the business travel market has not been fully explored yet. The issues of automated processes, transparent expenditure, expense tracking and compiled reports are a matter of a great concern, both for the company’s management and the travellers themselves.
Common tasks for travellers during a business trip are to strike an important deal, attend an annual conference, etc. However, they make considerable efforts to cope with organisational aspects and paperwork. Fortunately, these inconsistencies can be resolved with business travel management software. Nowadays, it is adopted in various industries for the sake of simplicity and ease of use. What features does it have and what kind of challenges is it designed to overcome?
Two points of view: challenges travellers and management can face during business trips
A business trip is mainly used for face-to-face interactions with clients or partners for networking, closing deals, building new partnerships and exploring trends. It is still an essential tool to raise work productivity, as well as open up new prospects for businesses in a global marketplace.
Workers go through three stages of the business travel life cycle - planning, booking and tracking. At the same time, company management have the sensitive task of ensuring that the arranged trip runs as smoothly as possible. What are the challenges they face along the way?
The planning begins with trip schedule coordination which usually includes adhering to travel guidelines in accordance with the company’s travel policy. The process of hotel booking involves checking whether it is tailored to specific requirements, as well adjusting the price to fit within the established limits. This path is often accompanied by a lengthy approval procedure. Employee complaints assert the utter inefficiency of this process.
Even though management representatives introduce concise instructions, some items may be missed out by employees due to negligence. The price of human error can be excessive in this case, as it seriously affects expenses, sometimes exceeding spending limits.
When trip terms are approved, a traveller enters the phase of choosing a travel vendor. They frequently book through a company-approved travel agent, as these options are prescribed in the company travel policy. According to the TripActions survey, more than 40% of workers are frustrated with company tools, as they feel a lack of timely support, a poor marketplace of choices and “it is not as good as those that are used for the leisure trips”.
As for management, they are genuinely concerned by the growing use of third-party travel agencies. The company loses control over these bookings, as well as travellers’ transactions.
The trip can quickly turn into a sequence of unforeseen events for the traveller, due to cancelled flights, changed plans or other circumstances. At the same time, outdated systems are, more than ever, failing to provide relevant tools to monitor these processes in real time. Also, a crucial issue for the travellers is expenses reimbursement. The mechanism implies manual collection of receipts, invoices and tickets, as well as the usage of a spreadsheet programme, which can drag the financial compensation process on for weeks or even months.
As it is quite hard to ensure accurate insight into the expenses of each worker, all inconsistencies result in pecuniary losses for the company. It can lead to expense fraud and overstatement of real spending.
Travel business management software is out now
Most companies are looking for an optimal solution that would simplify and speed up the processes followed by a business traveller. Companies that arrange up to 20 trips during the year often prefer to take the services of a travel agent, while others employ corporate travel software solutions.
Travel business management software is a collaborative tool that could be designed for travellers and managers for business trip organisation. The functional solutions will be applicable both for travellers to manage and control the trip details, and for management to automate travel-related processes and monitor trip indicators.
What features can be useful?
A custom business travel solution could be modified to meet the unique needs of an individual company. To resolve considerable challenges in the corporate travel market, let’s prototype possible app features.
Plan, approve and arrange a trip
Companies incur about 20% of travel-related expenses from the mismatch of actual expenses to the travel policy. Plenty of issues connected to travel policy non-compliance arise at the planning stage; it typically happens when workers are bothered with documents or have to wait for hours to confirm the trip date and budget, without understanding of policy conditions.
These tasks can be solved due with internal travel requisition, which contains three simple steps to plan a business trip through form filling.
Step 1. Attach travel-related documents, which are securely stored in the system.
Step 2. Determine dates and budget of a business trip.
Step 3. Send a request for travel term approval.
By using this streamlined procedure, it is possible to reduce the burden on travellers and supervisors. The single data entry speeds up administrative processes, and is a more cost-effective approach to keeping all travel-related records.
Corporate self-booking tool
Fraud related to tickets and reservation costs are another common budget overrun point, especially when the company loses control over the booking process. Management mainly engage travel agents, who choose an appropriate flight and charge about £22.92 to £38.20 as a non-refundable consultation fee per trip. However, each step still should be coordinated with a supervisor, which significantly delays the booking process and requires their constant attention. The travellers are even more frustrated by conditions, as they feel severely restricted.
To overcome these inconveniences, a reasonable solution would be to apply a corporate self-booking tool. The system will aggregate the best tickets and hotels offers. Using search filters tailored to corporate policy terms, the user books a flight, hotel or table independently, within one transaction. Once the total cost exceeds the permissible budget, the supervisor will be notified and can then revise the request and approve it. In other cases, an automatic confirmation will be delivered.
This accelerated process is beneficial not only for the employees, but also for a company who are tired of improper bookings:
- exclude a travel agent from the booking chain - the cost of a travel agent engagement varies from £13752 to £22920 a year, based on 50 trips per month. Over time, this amount will grow year on year with inflation; a company will have to pay about 2.51% more than the previous year. All these costs can be eliminated by delegating the bookings to a corporate self-booking tool.
- no need to involve a supervisor at each stage of reservation - reduce the operating costs of each trip, due to proper human resource management.
- strict adherence to the allocated budget - control overspending and prevent financial fraud from the employee side.
As a rule, companies reimburse expenses right after a business trip for actual invoices. The travel expense management procedure of collecting bills and dividing them into corporate and personal spending is quite painful for workers, as it takes a long time. At this stage, T&E fraud can rise sharply, and companies lose out on approximately £2.14 billion per year because of expense theft such as multiple reimbursements, overstated expenses and other schemes.
The continuing conflict of interest between management and workers can be resolved by using the travel and expense management system. The system keeps all invoices grouped by a “travel” expense type, including “airfare”, “lodging”, “road”, “car rentals”, “business meals” and “office expenses”. The procedure is extremely easy:
1st way - Take a photo of an invoice and define its expense type.
2nd way - If a payment is made by a corporate credit card, the invoices are integrated into the system.
This powerful tool significantly reduces the risk of expense revaluation, as it provides fully transparent account management. Nevertheless, intricate abuse still makes up 10-13% of the total amount of fraud and remains on workers’ conscience.
Google Trips example
The multinational technology company Google provides an inspiring example of dealing with business trip expenses. A substantial shift in their T&E policy was made by encouraging savings. The company decided to set a budget for each given trip, so that employees needed to act within budget frames, or even spend less than their allotted budget to earn credits. These rewards are further converted into future travel upgrades that keep travellers motivated.
Such an approach works for two complementary reasons - 50% of the money saved goes back to the company, and the other 50% returns to the worker in the form of cash benefits, which they can use for future trips. The main point of this strategy is to enable trustworthy relations with workers and reinforce organisational culture. Also, it reduces overall T&E costs while improving a traveller’s experience.
After a long business trip and compilation of a expenses report using tedious spreadsheets, the worker could wait for about a week for their refund. However, the company cannot speed up this cyclical process, since all the data is entered manually. Firstly, a check of each expense type is performed by a manager, then the audit report is transmitted to accountants for the calculation of the compensation payment. The manual compliance of an expense report provokes reimbursement delays and risks numerous errors. In fact, 19% of expense reports contain errors resulting in irreversible monetary losses.
To optimise reimbursement procedure, companies now widely follow automation practice. Workers can automatically form an expense claim based on an existing travel plan and incurred expenses that have been synced from the travel and expense management system. If the claim matches a trip budget and corporate travel policy, the report for reimbursement will be sent directly to the finance department. In other cases, the system alerts a supervisor of excess spending and reveals improper items.
The efficiency of automating travel reimbursements has already been proven by successful companies in view of:
- double savings from automated processing - according to the Aberdeen Group’s research, manually processed reports cost about £31.53 per item, while an automated report costs only £5.50. This significant contrast is explained by the involvement of three specialists and many steps to follow at one time. The cost-effectiveness of the automation will amount to £15619.20 a year, based on 50 reports being processed per month.
- fewer errors - when the process turns into a well-adjusted algorithm and tasks are processed consistently, it can be run over and over without being subject to crashes.
- speed up processes - industry leaders argue that invoice processing time is reduced by 50-75%.
Why business travel management software is better than point solutions
Since the organisation of business trips is a multistage process, companies, at different phases, may involve several service vendors, depending on need. How does it work and what are the weak spots of this approach?
To cope with the on-going processes of planning and booking, companies utilise open-source corporate travel platforms - TripActions, Egencia, TravelPerk and others. Despite a decent set of features, they cannot handle expense management and reimbursement, so to provide a complete solution, these companies enter into an integration agreement with expense management systems like Expensify. The only apparent advantage of this fragmented strategy is an instant solution that is ready to work the same day. Wide gaps in the integration chain can lead to data loss, and it is difficult to conduct data analysis when everything is stored in various parts. The company is then faced with disjointed processes and loss of productivity.
In contrast to point solutions, travel business management software consolidates these tools into one end-to-end solution that is expressed in:
- a complete view over data flow. Due to the usage of a common database, the company can manage and interpret diverse data sets from spending habits, bookings, etc. Performing analyses and audits allows for more accurate estimating and eliminating T&E expenses being exaggerated.
- sensible decision-making. The prompt analytics feature contributes to accurate forecasting and, as a result, reasonable business trip budgeting.
- unified solution. As travellers do not want to lose time switching between apps, the all-in-one solution allows for the elimination of disparate tools. In addition, it saves financial resources, as the sum of licenses and fees for each specific solution will quickly exceed the cost of an integrated tool.
If business trips are an integral part of workflow, you should reflect on optimising this process for the business as a whole, and for travellers. The first benefit of abandoning manual business trip organisation is the elimination of inflated T&E costs due to irrational travel and expense management. Beyond this, ineffective human resources management adversely affects performance and increases operational costs.
An alternative to this obsolete approach is to design a travel business management software that can handle planning and booking trips, as well as collecting expenses, all within one platform. By putting business trips on the automation track, the company will be able to manage business processes, in terms of task consistency and transparency, more effectively. That is exactly what the modern business travel market needs, since expenses fraud, human errors and data duplication are the most significant challenges that can be resolved by business travel management software.