While Zoom calls are great for efficiency, nothing can replace the in-person connections you make when travelling to a conference or tradeshow. Face-to-face interactions are essential for building trust and strengthening client relationships. But high-volume business travel comes at a cost. Without a financial plan in place, travel spending can creep up quickly, and by the time it appears on your monthly statement, the opportunity to manage it has passed.
If your company has a significant travel budget and you want to take control of how the money is spent, here are some practical financial planning tips to help.
Set an annual travel budget
Build a travel budget every year that’s based on your company’s objectives, rather than last year’s budget. It doesn’t have to be complicated. Start with your company’s business goals for the year ahead, then estimate the associated travel costs, and build a contingency fund for unplanned travel. You can use past travel expenses to understand spending patterns, but also think about how your priorities have shifted and where new opportunities might require additional money.
Create a clear travel policy
A company travel policy should clarify how travel should be booked and managed, and how expenses should be submitted. A clear policy typically outlines information including:
- How and where employees can book travel
- If bookings require manager approval
- Preferred airlines, hotels, and car rental companies
- Employee spend limits across key expense categories
- Payment and reimbursement process
By ensuring employees know exactly what is covered before booking a trip, the company can spend less on expenses that don’t fit within the policy.
Book travel early
Early bookings typically result in a wider selection of flight and hotel options and lower costs, especially when scheduling an international trip. Encouraging employees to book flights, hotels, and cars a few weeks or months ahead of schedule can help to maximize the company’s travel budget. Building clear minimum booking expectations into your company’s travel policy is an easy way to set expectations and reduce last-minute costs.
Negotiate with travel partners
If your company brings consistent travel volume to an airline or hotel, try to use this to your advantage. Many airlines, hotels, and rental car companies offer corporate rate programs which can significantly reduce your expenses. By consolidating your company’s travel spending with a small number of preferred vendors, you can use this as leverage to negotiate lower rates, package deals, and other perks or discounts. Also consider a co-branded credit card to maximize rewards with a preferred airline or hotel.
Choose the right business travel credit card
A business travel credit card can make it easier to monitor and control business spending, improve adherence to your company’s travel policy, and maximize savings through rewards and affiliate programs. CIBC’s business travel credit cards not only offer rewards and benefits but also integrate with travel management tools to provide a comprehensive solution for managing travel expenses. Issuing business credit cards to employees can also reduce the administrative burden associated with processing individual claims. Many business credit cards allow companies to set individual spending limits for each card, which can help to ensure that no one goes over budget. Providing employees with a company card can prevent them from having to front their own money for travel and then wait to be reimbursed.
Leverage credit card rewards and benefits
The right business travel credit card can help your company earn rewards on high spend categories, like flights, hotels, and gas, which can be reinvested into future travel. Consider credit cards that offer flexibility in how rewards are redeemed, whether for flights, hotels, or card statement credits. Beyond rewards, the right travel credit card can provide a layer of protection in the form of insurance. Coverage can help to cover cancelled flights, lost or delayed baggage, or medical emergencies.
Use travel management tools
Travel management tools are online or app-based systems that help to streamline the entire travel management process. These tools allow employees to book travel and then submit their expense claims and receipts electronically. This makes it easier for managers to track travel expenses and improves the efficiency of processing claims and payments. Some business credit card providers, such as CIBC, offer travel management tools designed to streamline the booking and expense tracking process. A travel management system also provides an overall, consolidated view of the company’s travel spending, increasing overall visibility.
Review travel spending regularly
Setting an annual budget isn’t enough; you have to check in regularly to ensure you’re sticking to the plan. Conducting regular reviews where you compare actual company spending to budgeted spending can help to catch issues early. This way, adjustments can be made to course correct before travel costs get out of hand.
Save on travel with proactive financial planning
Business travel is a valuable company investment. Whether you’re trying to sign a major client, enter a new market, or introduce a new product, there are situations where you need to be present in the room. With a little up-front financial planning, you can help your company save a lot of money on travel, while still achieving your business objectives. Setting a clear annual budget, implementing a company travel policy, and selecting the right business travel credit card are some strategies you can use to manage high-frequency travel.