Companies have to spend money to make money. There’s no other option, but the key is making the smart investments that will lead to solid payouts and returns for your business. In some areas, that’s not that hard to figure out. It’s often very simple to spot the right kind of investment opportunity and take advantage of it. But some areas of your business are often overlooked.
Travel expense management, for instance, is often something that is quickly handled and then filed away without much more attention. Even if you have invested in a good program to help with the process and ensure that fraud and noncompliance are rare or nonexistent, it’s still important to spend some time looking at the different ways that your company’s travelling employees spend.
In particular, looking at the costs and where you can reduce expenses is important. It’s a key part of good expense management, and with increasing travel costs expected for 2015 it’s even more important. Take a look at some of the areas your employees will likely be spending more this year.
For starters, over the last year prices increased in several areas, including:
- 1% increase in average costs of rental cars
- 2% increase in average price of airline tickets
- 4% increase in average cost of hotel stay
- 4% increase in total average cost of a domestic business trip
For 2015, the prices are expected to increase even more. Here’s a look at what experts predict:
- 5.9% increase in overall travel costs
- 3% increase in airline costs
- 4.5% increase in hotel accommodation costs
In short, prices are going up and there’s no real way to avoid that. But what you can do is take a look at your employee travel expenses and where you can save. Start by using your expense management program to get a detailed look at the spending data of your team. Identify the highest areas of spending and try to find ways to cut costs. Things like striking up exclusivity deals with hotel chains or frequent flyer clubs for airlines could help reduce overall costs. The key is using the data from your expense program to properly determine where you can reduce costs and where you simply can’t avoid expenses.
Travel is a part of doing business in today’s global economy, and the costs of travel will be rising this year. But with the right expense management planning and strategies, you can avoid suffering too much from those increases.