Creating a budget for your business trip can be overwhelming and time-consuming.
However, the complex organization and logic required to plan a business trip have proven worth the effort.
In fact, 445 million business trips occur each year, and %88 of those trips are deemed successful.
Below, we have eight tips to follow on establishing a corporate travel budget, so keep reading to find out how to lead a trip worth your investment.
Establishing a corporate budget requires an understanding of what a business trip entails.
Without this knowledge, you and your employees may encounter many problems and inconveniences such as lack of funds, poor lodging, or issues when filing taxes.
The travel manager may want to create an in-depth checklist or follow a corporate travel guide to ensure no avoidable mistakes are made.
If the time for proper travel education and planning is not available, consider hiring a travel agent.
Establish an Offical Travel Policy
Every company that sends employees on business trips must have a travel policy. Although each company’s policy may be different, they generally serve the same purpose of providing travel-related procedures and instructions.
Some things included in a travel policy are:
- Allowable costs for bookings and dining
- Special circumstance rules and expense changes
- Preferred company vendors
- Trip approval process and limitations
- Reimbursement allowable and procedures
- Expenses approved for employees and planning
- Travel insurance
- Record documentation
Attending employees and management often review a travel policy; therefore, it must be professional, thorough, and detailed.
Review Available Funds
The generally accepted cost of business travel for each year is %10 of the company’s annual revenue.
If %10 of the company’s revenue has yet to be allocated to other projects or expenses, that dollar figure may provide an appropriate baseline.
If not, calculate a dollar figure you are comfortable spending on the trip and plan accordingly.
Select Attending Employees
Every time you add an employee to your business trip, the total amount of money allocated to each person lowers significantly.
To ensure all employees have adequate accommodations and funds are not wasted, be mindful of who attends.
Consider which employees are detrimental to the success of the business trip and limit the attendance to as few people as possible.
Generally, the employees that should attend a business trip are:
- The manager in charge of the project
- The employees needed to complete the task
- The employee responsible for communications
Often, the employees listed above are the same person, and one individual can complete the trip.
Determine Trip Expenditures
Many components of a business trip must be added to a corporate budget.
Money will be allocated to:
- Travel tickets or Gas reimbursement
- Emergency funds
- Taxis or ridesharing
Once you know what to include in your budget, you can start the planning process.
Research the Estimated Pricing
The most challenging part of creating a corporate travel budget is determining where your money will be spent.
Because business travel usually takes place in an unfamiliar town or area with a significantly different money valuation, deciding which companies offer sensible pricing is laborious.
For instance, a five-star hotel in California may cost $400 a night, while a five-star hotel in Georgia might be $100 per night.
The best way to determine if pricing is fair is by researching costs and calculating price averages according to rating.
For example, If you come across three four-star restaurants that serve dinner for about $12 per person, a two-star restaurant with $18 plates may not offer fair pricing.
Calculate price averages for each expense on your list and book your reservations accordingly.
Many companies such as hotels and restaurants offer corporate discounts.
When considering your options, spend some time contacting each company to discuss whether or not discounts are available for business travelers.
Generally, most large incorporations will gladly accommodate your staff with affordable lodging and services if they feel their discounts will encourage future revenue from your company.
Be Reasonable with Expenses
When planning your team’s budget, it can be easy to overspend on extravagancies or underspend on essentials.
You can avoid improperly allocating funds by considering what is essential to your trip and the happiness of your employees.
Make sure your employees have enough money to sustain themselves efficiently while traveling. It is advisable that you provide a business travel credit card to your employees to cover their business travel expenses. This will help your employees limit and monitor their spending.
Limit the number of company outings and non-work-related activities.
Dine at restaurants that are reasonably priced or offer discounts.
Have your employees share accommodations, rides, and dining whenever possible and appropriate.
- Use educated assumptions to determine the value of each expense.
Once the official budget has been set, stick to it as closely as possible.
Creating a corporate travel budget includes diligent research, time, funding, and consideration.
By being reasonable, realistic, and educated, you can develop a budget that provides fair pricing for all expenses and leaves employees satisfied with your decisions.