How to reduce business travel costs? Ways to better manage business trips

When companies analyze business travel costs, they often focus primarily on ticket prices, hotel costs, per diems, and employee travel reimbursements. In practice, however, these are only a portion of the total travel expenses. Operating costs, which arise much earlier, typically amid organizational chaos, manual processes, and fragmented bookings, are becoming an increasingly significant burden for organizations. The workload of those involved in organizing business trips and the lack of control over budgets and travel settlements are also significant. At WorkTrips, we work with numerous companies across various industries where, at first glance, travel-related processes often appear to be sound, but only a more detailed analysis reveals where the money is actually being wasted.

In short: How to reduce business travel costs?

• Business travel costs include not only transport, accommodation and per diems, but also the working time of people handling this process.
• The biggest financial losses often result from manual processes, fragmented bookings and the lack of a single travel policy.
• Business trips should always be planned as far in advance as possible to limit more expensive last-minute bookings.
• Business travel settlement can be simplified through centralized payments, collective invoices and automatic reporting.
• Self-booking allows employees to book their own travel within company policies.
• The greatest savings are achieved by companies that treat business travel as a business process rather than individual bookings.

What are business travel expenses and what do they include?

Business travel expenses are, in short, all expenses incurred by an employer in connection with an employee's business trip. From a practical perspective, business travel expenses can be divided into two groups: direct and operational.

Direct costs include:

• plane tickets,
• railway crossings,
• accommodation,
• business trip allowances,
• car rental,
• employee food costs
• additional expenses, such as airport-hotel transfer.

Much more difficult to notice and monitor are operating costs, which include:

• Office Managers' working hours,
• manual travel settlement,
• multiple email acceptances,
• correcting invoices,
• manual reporting,
• organizational chaos.

It is these elements that increasingly generate the greatest losses for companies.

Why do companies often fail to notice the real costs of business trips?

When we talk to companies, we often hear that the business travel process "works." Employees leave, invoices are sent to accounting, and the travel settlement is finally finalized. However, after hundreds of implementations of our worktrips.com platform, we know that's only part of the picture. The problem arises when a company begins to consider and analyze:

• how long does it take to organize a delegation,
• how many people are involved in this process,
• how long does it take to settle a single trip,
• how many reservations are made outside company policy.

During audits, we often see that organizing a single employee's business trip involves several people and requires multiple email exchanges. This is where the hidden costs of business travel emerge, expressed in working time spent manually searching for hotels and flights, and multiple email approvals.

You can read more about other hidden business travel costs in our separate Guide.

Proven ways to reduce the costs of business trips

Booking business trips in advance

Last-minute bookings can increase travel costs, especially when it comes to international travel, especially airline tickets and accommodations in major cities. The closer to the departure date, the more expensive the tickets and the smaller the hotel selection. This, in turn, translates into a greater risk of booking outside of your budget. To mitigate this, the company should define a minimum booking period in its travel policy, for example, 14 days for domestic travel and 30 days for international travel.

Defining a company business travel policy

A business travel policy should specify which costs the employer covers, when employees are entitled to per diem allowances, what accommodation limits apply, and what the rules are for settling business trips. You can read more about what a business travel policy should include in our separate Guide. A lack of clear rules causes significant organizational chaos and carries the risk that most bookings will fall outside the budget. Reimbursing employee travel expenses can also be problematic. However, there is a solution. Thanks to centralized payments on the worktrips.com platform, companies can eliminate the need to use travelers' personal funds to pay for business trips.

Reservations in one system

Scattered bookings make budget control difficult. If employees book travel in different locations, the company loses cost visibility, and settling travel expenses becomes more time-consuming. The worktrips.com business travel management platform allows you to organize flights, hotels, trains, car rentals, and documents in one place. This centralization allows you to:

• control the budget,
• analyze expenses faster,
• simplify cost accounting,
• reduce the number of errors.

Possibility of self-booking business trips by employees

Self-booking allows employees to independently book business trips within company-defined limits. This ensures that employee travel complies with company policy and eliminates the need for administrative staff to manually process each reservation.

Automation of acceptance and settlement of delegations

If employees independently book travel to various locations, it's common for documents to be incomplete or contain incorrect information. Sometimes, in the midst of their busy schedules, they completely forget to settle expenses. Instead of manually overseeing the entire process, companies can opt for automation that manages limits, documents, and reports. This not only allows for faster settlement of travel expenses but also reduces the amount of paperwork.

Monitoring domestic and foreign diets

Domestic and international per diem allowances are an important element of business trip settlements. The amount of the allowance depends on the type of business trip, its duration, and the destination country. Employees are entitled to a domestic or international per diem allowance in accordance with applicable regulations. Even if Sunday is solely a travel day and not considered working time, the employee is still entitled to per diem allowances and reimbursement of travel expenses related to the business trip. You can read more about Sunday work, working hours, and business trip settlements here.

Analysis of accommodation costs during business trips

Accommodation costs can vary significantly depending on location, date, hotel standard, and even currency zone. Therefore, companies are increasingly moving away from a single, rigid travel policy in favor of more flexible policies tailored to specific travel destinations.

The worktrips.com platform allows for the implementation of multiple travel policies simultaneously, for example, by country or even city. This feature allows companies to set different budget limits for large, popular metropolises and smaller towns or individual countries.

The worktrips.com tool provides access to over 2.8 million accommodations worldwide. Travel administrators can mark selected hotels as featured, allowing them to appear higher in search results and be recommended to employees when booking. This not only allows for better control of accommodation costs but also standardizes the quality of business travel within the company.

System messages also provide significant support, as they can be displayed to employees at various stages of travel planning, for example, reminding them of preferred hotels, budget limits, or booking policies. Companies that regularly organize business trips can also take advantage of negotiated rates with hotels, which can be implemented directly on the worktrips.com platform. In practice, this allows for significant reductions in business travel costs and greater control over the business trip budget.

Regular reporting of business travel expenses and drawing conclusions

Reporting provides a complete picture of business travel costs. These breakdowns allow you to see the average cost of domestic and international travel, identify the most expensive destinations, and monitor the number of bookings outside of travel policy. Such detailed data helps companies make better budgeting decisions.

Treating business travel as a business process

The greatest optimization of business travel costs is observed in companies that don't treat business trips solely as a single trip or a series of scattered administrative tasks. The best results are achieved by organizations that approach business travel holistically—as an entire process encompassing planning, booking, approval, payments, traveler safety, reporting, and travel settlement.

Such companies are also changing their approach to business travel. They know that well-organized business trips help achieve business goals, support sales, customer relationships, and organizational development. Therefore, the business trip process should be managed in a way that, on the one hand, ensures full cost control while, on the other, allows employees to travel comfortably, efficiently, and stress-free.

Summary: Streamline business travel and keep costs under control

Business travel costs are becoming a particularly important area for companies that regularly organize domestic and international business trips. The more business trips, the more important not only are ticket and hotel prices, but also the operational time devoted to organization, settlement, and budget control. The greatest savings for companies occur when the entire process is streamlined, from reservations and approvals, through cost settlement, to reporting and data analysis. This is why more and more organizations are choosing to implement the modern worktrips.com solution. Want to see what modern business trip management looks like in practice? Schedule a short demo of the platform and see how you can simplify business travel organization in your company.

 

Frequently asked questions

Is an employee entitled to a per diem allowance during a business trip?

Yes, an employee is entitled to a per diem allowance if they travel on business as directed by their employer. The allowance covers the employee's increased food costs during a business trip. The amount of the allowance depends on whether the trip is domestic or international.

What does business travel reimbursement cover?

Travel reimbursement typically covers travel, accommodation, subsistence, travel expenses, parking fees, and other necessary travel expenses related to the business trip. The scope of reimbursement should be determined by applicable regulations and the company's business travel policy. However, a growing number of organizations are opting for solutions that eliminate the need to use employees' personal funds during business trips. Thanks to the worktrips.com platform, business trip bookings, payments, and settlements are handled in a single system, reducing the need for subsequent reimbursement of employee expenses.

How does business trip settlement work?

Travel settlement involves collecting documents, confirming incurred expenses, and determining the employee's entitlement. Companies using a travel management platform can automate many steps, reducing errors and speeding up settlement time.

How to reduce business trip costs?

Travel costs can be reduced through advance booking, a clear travel policy, budget limits, self-booking, approval automation, reporting, and payment centralization. The greatest savings occur when a company controls the entire process, not just ticket and hotel prices.