Cost reduction methods in travel cost management

One of the concerns of every Human Resources Department is cost optimization. Efficiency in spending is one of the competitive advantages that can help an organization to maximize profits, because if there is no proper control, there are operations that could be loss-making and not fit the company's strategy. That is why it is very important to manage travel expenses when it comes to reducing costs, since this could have a positive impact.

Often the company's expenditure is not analyzed in detail. Before carrying out reductions in working hours or restructuring due to high levels of expenditure, since these are company assets, it is advisable to analyze company travel and to what extent the various expenses (hotels, meals, travel, etc.) are contributing to the current situation.

Expense control is a fundamental part of Human Resources processes, since not all expenses have to do exclusively with payroll and social security.

The importance of planning to save costs

A business trip must be approached from an intelligent and strategic perspective. If business travel does not contribute to an increase in profits, it is necessary to assess how it is being managed in order to optimize costs and prevent it from becoming a problem for the company's cost structure.

There are departments that can exceed their allocated budgets if there is no control. Especially now that fuel costs tend to be high, the various processes associated with each business trip must be carefully examined.

When we say business travel, we mean all types of travel that need to be covered by the company, from attending events and trade fairs to visiting customers. Not all travel brings the same return to the organization, but that does not mean that it is not necessary. What does need to be considered is the way in which the organization plans so that expenses do not skyrocket.

Good travel planning can help to reduce travel costs. For example, through intelligent route planning, vehicles can spend less time on the road and save money on fuel. The choice of hotels or means of transport can also be a savings mechanism, as well as the per diems included in the trips, which must comply with the law.

How to reduce costs in corporate travel management?

The management of travel expenses could be the nightmare of your Human Resources Department, especially if it is a large organization with many people on staff. Why do costs tend to skyrocket? Often the problem is the lack of prior planning, as you simply accept the expenses that staff members charge to the company, without proper control mechanisms in place.

To solve this type of problem, the ideal solution is to use a travel expense software tool, such as ZTravel. This solution would allow you to plan and organize business travel in an intelligent way, foreseeing expenses in advance, approving or rejecting expense requests from staff members and having control over each of the mobility and business travel processes.

A large part of the expenses can be planned in advance, such as the allocation of per diems or hotel reservations, as well as the determination of travel routes or means of transportation. It is also possible to assess whether or not it is necessary for one or more members of staff to travel to a particular destination, since nowadays, with video calls and teleworking, a face-to-face visit is not necessarily necessary to have a conversation with customers or suppliers.

Let's take a look at 5 areas where your company could improve its corporate travel management.

Travel approval process

The first thing to do is to assess which trips or travel are necessary and which are not. Many times it is the members of a work team who make a request to HR. In these cases, there must be a person responsible for that area who approves the request (Department Director or Head of Operations), since HR does not know whether or not it is appropriate to make such a trip.

Ideally, this can be channeled through software, so that the approval or rejection process for travel requests can be streamlined as much as possible. Although there are no longer the Covid-19 restrictions that there were previously, company policy could be geared, on the other hand, towards optimizing travel and replacing it with digital communications as far as possible to reduce costs.

More organized travel

Planning is the key to everything. A per diem can be assigned to each person to use as he or she sees fit, or a set of requirements can be established to restrict spending and the use of the allocated budget on each trip.

Efficient transportation

The company can establish requirements regarding the means of transport to be used for travel, in order to follow a sustainable mobility policy in the company. The reduction of the carbon footprint and respect for the environment is part of the mobility strategy of companies, so ideally, if road travel is to be made, the most efficient route should be determined and the one that generates the least costs and pollution.

Reasonable per diems

The management of per diems is one of the aspects that must be controlled when making a business trip. Per diems are the economic amount that the company provides to staff members who have to make a trip or travel on behalf of the company. The purpose of these allowances is to cover the costs of accommodation, transport and food for the team.

Paperless management

It is advisable to avoid the use of paper in the travel and trip processes in order to avoid unnecessary expenses. On the other hand, the documents to justify the expenses incurred (invoices and tickets) must be managed digitally. Here the ideal is to have a solution like ZTravel that allows staff to take a photo with their cell phone of the documents and assign it to the expenses, so that the HR area can have control and visualize all expenses digitally.

Zucchetti Spain's ZTravel software solution is the ultimate tool for your company to control travel expenses in a smart way. Contact us for more information.