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How Efficient Is Your Company's Business Travel Process?

Answer these seven questions to see how you can add savings to your bottom line.

July 10, 2008
by Mary Schaeffer

With the weak economy, organizations are looking to get the most for their travel dollars — and so are their employees. There is no extra cash lying around for frivolous business travel. Every trip must count, and in some cases do double duty. To make sure, you should ask the questions below of your accounts payable and travel policy staff. You may be surprised to discover opportunities for achieving a more efficient, cost-effective business travel process and add savings to your bottomline.

  1. Is it really necessary for the employee to take the trip? Could the business at hand be addressed appropriately simply by using conference calls, Web technology or video conferencing? If the trip in question is a conference, can those funds be better spent on a series of Webinars that the whole staff can attend?

  2. Can the trip be combined so one trip is made instead of two or three? This works especially well when an employee is attending a conference in the same locale as some of your customers. With a little judicious planning, salespeople can sometimes combine two or three trips along a given route instead of making separate trips for each location.
  3. Are you reimbursing at the most current IRS mileage rate? This means taking into account off-cycle increases. Effective July 1, 2008, the optional standard mileage rate was increased to 58.5 cents per mile for the remainder of 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008. If you charge clients for travel, don't forget to use the higher rate as well.

  4. Do you negotiate preferred pricing with carriers and hotels that get the bulk of your business travel business when you have a large staff that travels? And when you do so, do you then encourage (or require) all ouf your company's travelers to use those preferred service providers?
  5. Do you insist on policy compliance by all your travelers? In some organizations, compliance with the travel and entertainment policy is often overlooked, especially when approvers don't review reimbursement requests closely, if at all. The result is increased expenditures for items the organization shouldn't have paid for. What's more, when others in the company realize that not everyone is being required to adhere to the policy, some employees will follow the example of their overspending peers.
  6. Do you allow cash advances? If so, get rid of them. They are extremely inefficient and with company travel cards there is no real reason to offer cash advances. When cash advances are offered, employees tend to request more than they really need and then drag their feet turning in their expense reports. Require your employees to either use their own cards and/or pay for cash items themselves and then request reimbursement — this way, they are more likely to turn in their reports on time.
  7. Do you encourage travelers to stay with family and friends when traveling on company business? Many organizations allow employees to stay with family or friends. Typically, to compensate the family, the employee is allowed to take the family out for a nice meal, but no other compensation is offered. In most cases, especially for longer trips, this policy saves quite a few dollars.

So, before your staff takes that next business trip, make sure you have answered the above seven questions and not only made your company's business travel policy a sound one, but also added savings to your bottom line.

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Mary S. Schaeffer is the author of over a dozen business books including Travel & Entertainment Best Practices (2007 John Wiley & Sons) and The Controller & CFO's Guide to Accounts Payable (2007 John Wiley & Sons). She serves as the editorial director of Accounts Payable Now & Tomorrow, a newsletter for professionals interested in payment issues, writes a free weekly ezine for that organization and directs the organization's consulting practice.