Travel management for small businesses: a complete guide
Travel is important, even for smaller companies. Meeting face to face can be the final thing that gently pushes a lead into becoming a client. So here are some tips to make your small business travel program efficient and stress-free.
Larger companies usually have an established budget for business travel, which not only lets them confidently book a certain number of trips in a month, but it can give them a little extra flexibility for the trip itself. They are also much more likely to have a travel procedure already established.
For smaller companies establishing business travel, this travel procedure, budget, and other policies may have to be built up from scratch. So this may seem overwhelming, so meeting with leads on a video call instead of face to face may seem like the more appealing and simpler option.
This doesn’t have to be the case.
This guide will cover everything that small businesses should consider and arrange when starting to send employees on business travel.
See how to save money on business travel
How to run business travel in a small business
Small businesses tend to spend more on travel as a percentage of their outgoings compared to larger companies. So it's important to establish priorities, goals and processes to make your business travel as cost-effective as possible.
Main priorities for small businesses:
- Consolidation - no duplication of efforts and doing as much as possible in one round trip
- Compliance - Making sure your staff stick to your spending rules and know why they are in place
- Flexibility - Letting your staff book travel that works for them and that lets them react quickly to scenarios where travel is needed
- Transparency & Accountability - having oversight over why your staff are traveling, their spend and their objectives
If followed well, a good travel system leads to well-organized, cost-effective, and productive business trips. And..happy travelers!
When to travel and who to send
There are two very important questions to ask when beginning to establish a travel policy for your business:
- When do we send people on business trips?
- Who do we send on these trips?
The answers to these will depend on several factors. The size and makeup of your team, your budget, the details of the trips themselves, and more. For example, in regards to seniority, the higher up an employee is, the more flexibility and agency they should have in their decisions to go on business trips. While more junior staff are likely to have stricter limits on their ability to travel.
The important thing here is to make sure your decision, and the resulting policy, is made clear to your team. Especially in a small business, it’s a good idea to reduce the number of travel requests that have to be processed, while also prompting staff to travel when it’s appropriate.
Expenses and invoices
Keeping travel expenses within the pre-established budget is essential. Especially as a small business, staying within this limit is vital - not only because small businesses have less flexibility to make financial decisions, but as the company grows, this lax adherence to expenses will only become more chaotic.
Things to consider:
- Spending limits
- Specific spending rules, and how they vary between employee seniority or importance of the trip
- Payment method - travelers pay and invoice the company, company credit cards, or pre-paid cards.
- Invoice process, if this is the chosen payment method
Regarding the payment method, it’s generally advisable to avoid having employees pay the costs themselves and then requesting they invoice the company back.
If business travelers are given a company credit card for use during the trip, then the guidelines of what is acceptable to purchase and pay for should be made clear to them.
The final option is to give employees a pre-paid card with a spending limit - just make sure they have a way of paying if they find themselves over the limit and in an emergency.
Establishing a travel policy
Having a well-established travel policy is important to keeping your capacity for business travel sustainable.
Organizations should be the initial focus. The travel policy must be:
- Clear and easy to understand.
- Well communicated to everyone who may be sent on business trips.
- Kept together in one location and easily accessible by everyone.
- Easy to work with, with a low number of steps for employees to organize their travel.
Along with the travel policy, important information and documents for business travelers must also be kept well-organized. Keep all traveler information in one place, so when they need to fly, or rent a car, or book a hotel, it’s as quick and easy as possible.
This is especially important if business travel is managed by a single person, whose job also requires them to be responsible for other tasks. If they’re away for a few days, you want to make it easy for someone to step into their role temporarily and still find all the relevant information.
Employees should also know the exact process for requesting permission for these trips. Be it through a messaging program like Slack, an email, an online form submission, or something non-digital - however the communication is made, employees should be made aware of it and encouraged to adhere to it.
There should also be clear policies for what to do in the event something negative happens, either during or after the trip, like:
- Missed flights.
- No available hotel room.
- Client/lead canceling the meeting close to the trip.
- Lost receipts and incomplete expense claims.
- Extreme situations which require rapid repatriation.
For a more in-depth guide, read out article on why and how to write an expense policy for a small business.
Compliance with the policy
If your travel policy is complete and hits each of the 4 standards in the section above, then you can start to focus on ensuring compliance.
Having your whole company adhere to these rules will make business travel much more efficient, and will result in more satisfied and productive employees.
Modern business travel has seen a shift of focus from finding the cheapest supplier to ensuring more controlled behavior and expenditure by business travelers. Employees not following the rules while traveling can greatly skew financial results.
With that said, there does need to be a level of flexibility involved, which makes this a balancing act. It’s important to know when to treat the rules as concrete, and when they’re guidelines. For flexibility to be possible, open communication between travelers and managers is vital.
Changes to the plan are made all the time during business travel. Most of these trips are to a foreign country and mean working with a separate organization. There are bound to be aspects that were unaccounted for. So, changes are often made - either to the budget and sometimes even to the itinerary.
Overall, communication and visibility will be key to travel policy compliance. Business travel is reliant on people being aware and up to date with the policy. Even in a small company, it’s a mistake to assume everyone knows the policy. So, communicating the policy to staff and making it easy for them to look up are big components to ensure.
Reporting and measuring impact
Solid expense accounting makes future business travel much easier. Business travelers must know how to log their expenses, and it should be a process that is quick and easy. To this end, the best suggestion is to use a travel booking platform or accounting/expenses software.
A thorough log of financial information from business trips can enable you to conduct annual analyses of the ROI they have gained, and inform you on the degree to which they are worth investing in for the future.
Finally, it’s also to important to report on non-financial aspects of the trip. After a business trip, the traveler should be encouraged to give feedback on how it went, perhaps in the form of a short questionnaire. Here are some questions to consider:
- Were you ever short of funds during the trip?
- Did you have enough time to complete everything?
- Were the directions clear?
- Was the pre-travel communication sufficient?
- Did you feel you were supported by HQ during the trip?
Make this questionnaire easy to access and fairly quick to answer - if they can get it done while waiting for their flight, then all the better.
How small businesses can book travel
There are a handful of different methods of booking and managing business travel that are available to small businesses. They each have their pros and drawbacks. These options are:
- Corporate travel agencies
- Consumer travel websites
- Free business-focused travel tools
For an in-depth guide, you can read our article on the best free travel-booking tools for small businesses. This will cover some cost-saving tips also.
Corporate travel agencies
Corporate travel agencies can fill an important gap in small teams. They’re especially useful for those who don’t have a dedicated travel manager on staff, or at least with an office manager with travel management as a key responsibility. These agencies can work as a valuable go-between and can help negotiate cheaper rates with necessary providers, e.g. hotels, airlines, car rentals, etc.
Travel agents aren’t as expensive as you may believe, and the human aspect of their service can be helpful. However, many companies will charge clients based on call-handling time and booking numbers. Also, in many cases, all you want is to quickly book something through an online portal, and not have to handle an extensive phone call to explain what you need.
Travel agencies are often aware of secret discounts - ones that aren’t publicly published online for the general public to see. However, these agencies are also businesses, and they’re also looking to take a cut, which can sometimes mean a higher net cost to your own company.
Consumer websites are those which let users put in their travel parameters (locations, dates, price ranges, etc), and then show a page of options from many different airlines. Famous examples are Kayak, Booking, and Skyscanner. They’re primarily used for non-business travel, but they can be useful for small businesses too.
The benefits are the wide range of options available and the facility for finding cheaper options. For companies who opt to use an open booking policy for business travel, this is a fairly straightforward option and one that makes life easier for employees to book their own travel. Finally, since these websites are extremely common for booking vacations, all of your staff are likely accustomed to using them, so there’s no learning curve to consider.
There are drawbacks to using these sites, however. First off, an open booking policy will certainly result in a lot of paperwork for whoever is in charge of managing travel. Each employee will be sending their own invoices, often multiple ones if they book flights with multiple providers.
You’re also giving control overspending to the employees, which makes policy compliance extra important.
Free booking tools for small businesses
The option most appropriate for business travel is to use the online booking tools available, which are much more geared towards business travel than vacations. Generally, they blend the benefits of easy-to-use consumer sites and the support and insight of business travel agencies.
These sites give businesses the benefits of control and oversight over their traveling employees but don’t require the company to sign up to an expensive travel agency. The majority will offer a free version of the service.
Additionally, there is customer support available with these tools. This means users get the benefits of the automated digital platform, like with consumer travel websites, but also have the option of requesting human support as with a travel agency.
If you know an agency is what you want, then read our business travel agency guide for small businesses.
The only real drawback is the slight learning curve compared to simply using a consumer travel website, but this never tends to last long, and the benefits over time far outweigh the time it takes to start using these tools.
Tips to reduce small business travel expenses:
Business travel credit cards
Many credit card providers will have options that are aimed specifically at rewarding business travel, and offer legitimate benefits. These cards offer perks not only for booking flights, but also for hotels, car rentals, and more.
The one drawback of these cards is the annual fee, but this cost is generally paid off quickly if your company invests in business travel.
Some key benefits to expect:
- Extra points on flights and hotels.
- Rebates when paying for points.
- Annual credit for airline incidental fees
- Airport lounge access,
- Access to loyalty programs
- Free hotel stays on certain days
Providers such as airlines, hotels, car rentals, and more also have reward programs. They want people to be loyal to their brand, so these rewards programs should be kept in mind when choosing providers. Over time, the right choice can mean significant savings on business travel expenses and much more satisfied employees.
- No blackout dates, extra points earned when booking
- Discounts on upgrades, e.g. to extra seating space, or for bringing animals
- Possibility to skip security queues
- Free check-in for several luggage pieces
- Waived fees for cancellations
- No blackout dates
- Guaranteed room types and room availability
- Late checkouts
- Free extras, like in-room wifi and breakfasts
- Private airport delivery of the vehicle
- Guaranteed rental availability
- Free extra days of rental
- Free selection of vehicle
Providers are especially interested in business travelers, and will often offer corporate rates. For these companies, earning the trust of an organization that sends a high number of employees on trips is a high priority. They want to be your go-to option, so you can leverage this to get big discounts.
By contacting providers directly and explaining that you represent a company can result in you negotiating for better rates. It’s worth getting in touch with a handful of providers and comparing their offers.
Deductions on travel expenses
For business travelers themselves, some deductions can be applied to annual tax returns. These savings can be granted if the traveler:
- Pays for their meals
- Uses their own vehicle for travel
- Pays for shipping or baggage
- Pays tolls
Ride-sharing apps and your travel policy
A question to consider when setting up a travel policy is what modes of transport to allow travelers to use while in the new city.
- Fast and convenient
Public transport is:
- The cheapest option
- Inflexible and may require the traveler to walk a distance to/from stations and stops
Car rentals are:
- Mid-priced between taxis and public transport, and very convenient for travelers
The final option is to use ride-sharing apps, which are growing in popularity, especially in the US. They could be considered a potential option since they’re cheaper than taxis, but a little more convenient than public transport.
Shared accommodation can be a huge cost-saver if you’re sending more than one person on a business trip.
However, it can be a prickly topic with business travelers. Many have no issue sharing a room with a fellow traveler, but others highly prioritize their privacy and personal space, especially when at work in a foreign city.
The big piece of advice here is to ensure transparency. If you do choose to have travelers share accommodation, then it should never come as a surprise to them. Even before confirming their travel, employees should be made aware of the possibility of sharing a hotel room with another employee. It’s a huge factor for many employees, and it can result in deep dissatisfaction if they learn they are sharing a room out the blue.
Geo-specific travel guidelines
Travel policy and guidelines should also take geo-specific factors into account. Business travelers should expect very different experiences when traveling to foreign countries, which have foreign cultures, different business practices, and perhaps a different level of safety in the country.
So it’s worth making aspects of your policy dependent on location, such as:
- Daily spending limits
- Access to car rentals and taxis
- Individual travel vs pairs of groups of employees
A reality of business travel is that employees may be sent to destinations that aren’t as universally safe as what they’re used to. So advice should be provided to these employees, and other exceptions should be considered, such as ensuring access to private vehicles or larger hotel chains which focus on guest safety.