Travel Expense Challenges To Stay On Top Of
Despite the increasingly connected world that exists online, there are certain aspects of a business’ operations that still require in-person travel. Whether it’s going to industry conferences, presenting to a client in person, meeting new contacts in-person to shake their hand, or otherwise, travel remains an integral part of many businesses.
That said, businesses must take care not to let the costs of travel become burdensome. When careless spending on travel expenses gets out of hand, the potential benefits of such travel can be undermined. To ensure you stay on top of your travel expenses, here is a quick 101 overview of the travel expense challenges to track carefully:
Vague or misunderstood travel expense policies
If the owner of a business is the only one traveling, then it’s easy for him or her to understand what should and should not be expensed to the business. But as a company grows and employees begin traveling, assuming they understand what should and should not count as a travel expense becomes murky. Be sure to document and communicate travel expense policies to these employees. These policies should be clear, easy to understand, and maybe even include examples, so there’s no confusion.
Understanding the granular travel expenses
As your employees begin to track expenses, you’ll want to understand exactly what the travel expenses being paid are. It’s not enough to know how much the total travel expenses were, but you need to understand how much is going to airfare vs. rental cars vs. food vs. other expenses. Making sure these individual expense types are tracked will allow a business to understand what costs are being hit too hard and which costs can or cannot be controlled via tighter restrictions. For example, there’s not much a business can do if the airfare costs go up, but if too much is going to client entertainment costs, then tracking individual travel expense categories will allow for a better understanding.
Tracking Travel Costs Over Time
Another way a business can track its expenses is to keep tabs on how those travel expense costs are changing over time. It’s important to routinely look at individual business trips and see what the total costs are over time. Are they increasing? If so, you should investigate which expenses are increasing, if an increase is necessary, or if there is an opportunity to tighten the belt and reduce unnecessary travel expenses.
If keeping tabs on the amount your business is paying in travel expenses is something you want to learn more about, you can always contact the experts at Tobin & Collins to learn more. We’re here to make business easier for you.