Good news for business travel: Airfare prices went down last quarter, according to an Orbitz for Business press release posted on WSJ.com. Across the industry, year-over-year airfare prices are down by 3.5 percent (domestic) and 3.1 percent (international). While the price break is a nice bonus, organizations that wish to capture long-term savings can take matters into their own hands by adopting powerful, user-friendly travel expense management tools and strategies.
How and when an organization pays for travel expenses makes a bigger difference in the long-term than cashing in on temporary price fluctuations. For example, according to the Orbitz report, booking a business flight on short notice (three days or fewer) cost an average of $311 last quarter, much less than the $385 it would have cost in 2012. Yet booking at least 14 days in advance is significantly cheaper, with an average cost of $208. For meaningful savings, it seems, organizations should optimize travel expense management procedures to consistently book flights in advance.
By adopting an automated travel expense management system like Chrome River EXPENSE, managers gain a more thorough understanding of areas where they can improve business processes and reduce spending. For example, managers can identify which departments or individuals tend to book airfares at the last minute and find ways to solve the problem, perhaps by issuing better spending guidelines or negotiating more cost-effective travel through preferred vendor relationships.
An automated expense management system mimics a company’s existing approval process, gathering the necessary approvals along the way instead of catching errors after the fact. This ongoing process helps ensure that employees comply with travel expense rules and that policy exceptions can be caught before spending takes place.
If the cost of business travel goes down, few will complain. In the long run, however, organizations can best capture meaningful savings by improving their travel expense management system.
We’d like to hear your feedback. What are your best tips for reducing travel expenses?
Source: The Wall Street Journal, August 2013
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