The 2022 Guide to Corporate Travel Management
10 Dec 2021
Even in the era of online meetings, corporate travel and face-to-face meetings are still a huge factor in the business world. People travel for work all the time and for various reasons. They may have an international office, offshoring/nearshoring partner, international strategic vendors, foreign investments, branches, franchises, etc.
If any of the things mentioned above ring a bell, the chances are that your employees will have to travel on a regular basis. Here are a couple of things you need to consider in order to make this situation as cost-effective as possible in 2022.
Flights for Business Travels
When it comes to business travel, there are two things to keep in mind – expenses and convenience. You see, you can save quite a bit of money by making your representatives take multiple layovers or early flights. However, cutting down on your costs of representation has some serious ramifications you shouldn’t overlook.
Forcing your employees to abide by this austere corporate travel policy might hurt your company’s internal reputation and loyalty in the long run. As a result, you will be seen cheap and neglectful of the leisure and respect of your own employees. In turn, this will lower your employee loyalty and, as a result, damage your employee retention rate.
Remember that your representation costs need to include more than just the bare minimum. Saving money here is usually not a smart company policy in the long run. Also, remember that the people you usually send on long-distance business trips tend to be employees that you probably can’t afford to lose.
A New Approach to Travel and Representation Costs
Corporate travel management is not just a logistical issue. If anything, it is a matter that is of the greatest concern to your accounting services. So, in order to make things run smoothly and keep everything operationally efficient, you need to have a decent travel and representation expenses policy.
Travel expenses, regardless of whether they are local or long-distance, qualify for a corporate tax deduction. This is true regardless of the means of transportation. Also, entertainment expenses while traveling for business are fully tax-deductible. Meals, gratuities, etc., should all be documented and receipts kept.
One of the simplest ways to manage all of this (and keep all these records) would be to get expense management software. The majority of these platforms allow for the separation of personal and corporate expenses (personal and corporate cards, etc.).
Lastly, you also need to take into consideration the likelihood that the employee in question might use their personal funds on the journey, which they will later need to be reimbursed. You might want to have a policy about this, as well.
The next thing you should think about is the cost of booking suitable lodging. There are several factors to consider here. First, there’s the cost that definitely goes into the total trip expense. Still, this doesn’t mean picking the cheapest option. The cheapest option is usually in the less safe part of the target region, which already makes it suboptimal.
Also, keep in mind that the lodging, more than the flight itself, will show your employees exactly what you think of them and how much you’re willing to commit to their leisure. In other words, having them stuck in a roach motel will send a message that you really don’t care.
This, combined with the conditions of the place where they spend the night, will also affect their self-esteem. The person traveling is the representative of your company. A person in a business meeting (one so important that it couldn’t have been done online) needs to feel confident and empowered. It’s as simple as that.
If the entrepreneur or the acting manager is the one on the road, they also need a suitable environment from which they can manage things back at home (at least partially). For this, you’ll need more than just Wi-Fi.
Traveling across the Target Location
Upon arriving at the target location, there are several ways in which the employee in question could go on about. While using public transportation may be the most frugal choice, being late for a business meeting because the bus was late definitely doesn’t look good. On the other hand, renting a luxury car and arriving this way to the meeting might send a completely opposite message.
Keep in mind that a rental car also makes things a lot more convenient for the employee in question. However, do you have to go for a luxury car, and do they need a chauffeur? Probably not, but what about a scenario where they travel to the part of the world where the car is driven on the opposite side of the road? Would this be too big of a transition for them, thus jeopardizing their safety? In this scenario, cabs, Uber, public transportation, or a vehicle with a chauffeur are mandatory.
Partnering with Travel Management Company
There are companies which specialize in travel management. In a scenario where your staff members travel a lot, the chances are that a specialized agency might save up to 50% of your annual travel spend. Bear in mind that travel expenses tend to be one of the company’s largest expenses, which means that these savings can be quite substantial.
Also, these agencies collaborate with airlines and hotels all over the globe, which enables them to negotiate deals that you wouldn’t be able to pull off otherwise.
This is an excellent example of efficient outsourcing, and it effectively reduces the amount of administrative work on your plate, as well. The 24/7 traveler support is also a great reassurance for someone leading this lifestyle (which is something that might be inevitable for you and your representatives).
As you can see, in 2022, the approach to corporate travel is bound to be handled through a two-pronged approach. On the one hand, it’s a matter of your own budget. Second, it’s the matter of representation. How much you’re willing to spend on representation will affect the way in which your employees (even the ones back at home) and your business partners perceive you. There’s also a hidden, psychological factor that needs to be taken into consideration. Overall, the issue itself has more layers and, while accounting is its major part, it needs to be approached from different directions.