Estimated reading time: 5 minutes
• A year ago, a gallon of gas in the United States set you back around $3. Today, the same gallon costs $5. The long and short is that inflation and supply chain shortages are rearing their ugly head and making its effects felt far and wide.
• For businesses, the consequences are manifesting themselves in supply chain shortages, an increase in supply chain risk, and rising procurement costs.
• Against such a backdrop, what can organizations do to keep corporate travel costs low and spend less? In this post, we tackle a few best practices companies may want to adopt as we brace ourselves for the tough times ahead.
The latest report from the United States Bureau of Labor Statistics informs us that the May 2022 annual inflation rate hit record highs. At 8.6% – the highest since 1981 – experts are warning about the possible supply chain shortages scenarios citizens and businesses may face which include:
· Lower pension and retirement funds for senior citizens
· Increase in variable interest rates on loans
· Uptick in real estate prices
Listed Below some heading describe in brief.
1. Re-evaluate Your Existing Travel Policy
How appropriate is your present corporate travel policy in light of inflation and supply chain shortages? When it comes to tightening travel-related operating costs, your first point of order should be addressing your current corporate travel policy.
Re-think how flights are booked as well as what incentives are covered for travelers i.e. handling fees and meal allowances. Cut back on any superfluous expenses and establish limits for on-site spending.
Earmarking these new changes and notifying travelers of the updated policy will help keep traveling costs and spending low. And speaking of corporate travelers…
2. Put in Place a Clear Pre-Trip Approval Process
Part of your corporate travel policy should have a clause specifically dedicated to your company’s pre-trip approval (PTA) process.
This PTA process should answer questions such as
· Which employees have clearance to book their own flights, hotels, and business-related travel necessities?
· Which travel management companies do you work with for travel bookings?
· Who is monitoring and has oversight of company travel arrangements?
Having a designated person with oversight and a list of prequalified travel management companies can lessen the odds of having to cancel trips, flights, and bookings that are beyond the scope of the company travel policy.
3. Invest in a Price Tracking Tool
With airline ticket prices going up by 25% outpacing inflation, every company is going to need all the help it can get when it comes to savings on flight costs.
This is why an investment in a price tracking tool is an absolute must.
Not only does this travel management software allow you to search for tickets at the most competitive rates but it gives you the freedom to cancel and rebook cheaper tickets when you find them.
4. Consider a Hotel Rate Tracking Tool
Flights aren’t the only ones that can be tracked. You can also monitor the prices of different rooms in various hotels with a hotel rate tracking tool.
Such a tool can give insight into the charges hotels within a certain location are commanding based on the star rating.
It’s worth pointing out that where it concerns reducing the cost of hotels, you might want to limit what the company will cover in the way of Wi-Fi and minibar charges.
5. Set a Budget Threshold for Food and Transport Expenses
How much will the company provide as food and transport allowance? Is it better to pre-pay ahead of time or to adopt an allowance per day model for travelers?
It appears that the latter model works better as it gives employees the freedom to arrange their meals as they choose. Knowing they have a budget will also keep them responsible.
Regarding transportation, the selected choice must always be the most affordable option. The company may wish to think about encouraging employees to use their own cars and then reimbursing them for travel costs incurred.
6. Be Wary of Miscellaneous Charges
It’s very easy for seemingly minute auxiliary charges to compound. Just think of parking, Wi-Fi, concierge, or baggage handling fees. A careful eye must be kept on any and all additional charges.
It is possible to secure packages that ensure business travelers are covered in case they do make use of these services. Planning ahead is one of the surest ways of significantly reducing corporate spending.
7. Partner Up with a Travel Management Service
Corporate travel management is a business function all of its own and will require a dedicated person to manage in-house affairs. If doing all the above sounds like too much work, it is possible to outsource this activity by partnering up with a corporate travel specialist.
By relying on the expertise and experience of a seasoned travel specialist you can effectively rein in business travel spending. How?
Through:
· The implementation of tailored travel management plans
· Access to industry veteran travel support
· Access to discounted airfare and hotel rates
Ultimately, it is possible to keep corporate travel costs low and spend less but it does require wise counsel and guidance.
Wrap Up:
As in-person meetings and travel resume in this post-coronavirus era, it is imperative that companies stay abreast with best practices that will help them keep spending and operational costs low while facing supply chain shortages.
One way in which small, medium, and big businesses can do this is with the help of reliable, robust, and innovative procurement solutions such as those provided by ProcurePort.
This software is trusted and used by enterprises and organizations such as UNOPS, HUD.GOV, and conEdison.
If you have any questions relating to purchasing and supply chain management in 2020, or would like to discuss procurement software with one of our consultants or schedule a demo of our solutions, contact us today.
