18 ways to optimize business travel expenses

Why optimizing business travel expenses is important

Meeting face-to-face with customers, suppliers, partners and employees can drive strong outcomes for your business. In fact, 88% of travel decision-makers said that business travel is critical for driving organization growth, according to a 2023 study. So how are leading companies managing their corporate travel and expense programs to balance the need to control costs with the benefits of more face-to-face interactions?

We’ve assembled 18 strategies that leading companies are implementing at every stage of their journey to optimize business travel expenses. Jump to the section that interests you most:

• Planning the trip
• During the trip
• After the trip
• Expense reporting
• Analyzing and optimizing travel spend

Planning the trip

1. Simplify your business travel policy

Nearly half (47%) of corporate travel decision-makers described their last policy change as a “tightening” to simplify employee choices and better control costs, according to our recent travel & expense (T&E) policies survey.

To help employees make business travel decisions that adhere to company expectations and avoid unnecessary costs, make sure your policy is clear and concise. Employees should be able to quickly understand permissible expenses, preferred vendors, and expense reimbursement procedures.

2. Use corporate travel management tools

A travel management platform for airfare, hotels and ground transportation can help your employees make policy-compliant choices that also fit their travel preferences.

Corporate travel tools consolidate relevant travel information from multiple platforms and providers into a single place. If plans change, the platform may also offer simple, policy-compliant rebooking and cancellation options.

3. Set travel caps

Caps on individual travel expenses for lodging, meals and ground transportation can prevent overspending and help control costs. Many companies provide travelers with city or destination-specific budgets and use data from travel management companies, consultants or their own expense records to estimate costs. According to our recent T&E policies survey, more than 6 in 10 embed T&E policies and processes into online booking or expense tools to flag employee choices as falling within or outside company policy.

4. Book in advance to stretch your travel budget

Early bookings often mean lower rates on airfare and accommodations. To make this a practice, your corporate travel policy can set a timeline for booking travel in advance and remind last-minute bookers when they are out of policy.

5. Use corporate discounts

Travel service providers understand the benefits of building lasting relationships with businesses. Airlines, hotels and car rental companies will often work to secure the best possible rates to fit your company’s unique travel needs and volume.

If you want to leave the negotiation process to the professionals, you can enlist a travel management company to work out corporate discounts on your behalf and help you optimize business travel expenses.

During the trip

6. Encourage employees to use corporate cards

Capturing more T&E spend on credit cards can provide valuable organizational benefits:

• Easy-to-access transactions can help control employee spending and increase visibility.
• Robust transaction-level reporting can optimize accounts payable processes.
• Employees can receive travel insurance, concierge support, telemedicine and access to airport lounges.

Virtual cards and mobile virtual cards are another option. They use temporary, randomly generated card numbers and are linked to a funding account with an established line of credit. They give businesses more control over spending with the ability to set customized parameters around how, when and where the card is used.

7. Promote sustainable choices

61% of travel decision-makers said their organization encourages travelers to book sustainable options. This can take many forms. One common approach is to implement regional or national policies that favor rail over air travel. Others set policies to minimize day-trips by air.

Another measure is to reduce multiple trips. Encourage your employees to schedule multiple meetings in the same location to gain efficiencies, or shift select meetings to video calls.

If ground transportation is necessary, encourage employees to split ride-share or rental car costs to reduce costs and carbon footprints.

8. Allow bleisure travel

Leisure travelers are taking longer vacations compared to pre-Covid trends. As work-life boundaries blur, many employees are extending their business trips to enjoy time at the destination while off the clock. Letting employees take “bleisure” travel can increase flexibility in the timing of their trip and reduce total travel costs.

After the trip

9. Review and approve expenses quickly

Do your team’s expense reports get submitted promptly, only to linger with management in the review and approvals stage?

For many businesses, this process is complex and time-consuming. Streamline yours with a clear and concise expense management policy, pre-authorizing certain expenses and setting expectations for approval timelines.

A virtual card program is another way to process expenses faster. Virtual cards have enhanced data tied to each use and they’re often integrated with expense management systems. This data integration can streamline your back-office processes, including automating reconciliation of expenses for finance teams.

10. Encourage feedback 

Gather feedback from employees about their travel experiences to balance the need for travel with cost-saving measures. Feedback can help determine which expenses are important to your team-and which you can reduce without impacting employee satisfaction and business growth. Regular post-travel surveys and employee interviews can help you identify opportunities to cut back on unnecessary travel spending and improve policy compliance.

Expense reporting

11. Implement an automated expense reporting system

Outside of work, people expect convenient mobile-first and cloud-based technologies. Many now expect the same at work. Automate your expense reporting process to reduce costly errors, save time and improve employee satisfaction.

12. Standardize receipts submission

Digital copies of receipts can help streamline expense reporting. Imagine if your team could seamlessly submit an expense with just the snap of a photo. Real-time visibility into spending can help finance teams ensure T&E policy compliance and eliminate piles of paper receipts. If tax codes allow, you can consider waiving receipt requirements for transactions under a certain amount.

13. Categorize expenses clearly

Properly categorized travel expenses let you more easily analyze spending trends to unlock savings. A travel management software platform can simplify this process by integrating corporate card transactions directly into their system.

14. Provide training on expense reporting

Educating your team about how to properly report travel expenses will help them avoid common mistakes and follow company policies. Over 55% of companies with annual travel spend of over $50 million require employees to view or attend travel and expense policy training. Some companies even require employees to pass a test before receiving a corporate credit card.

Analyzing and optimizing travel spend

15. Track key metrics and benchmark against industry standards

Review spending patterns regularly to improve T&E policy compliance and unlock savings. Monitor key performance indicators, such as average cost per trip, policy compliance rates and total travel spend. Comparing your expenses with industry benchmarks can highlight opportunities to streamline spend. Industry associations, consultancies and travel management companies often offer varying levels of benchmarking data for business travel.

16. Create forecast models

Statistical models can use historical data to forecast travel patterns, demand fluctuations and pricing trends. These insights can help you navigate supplier negotiations, anticipate fluctuations in T&E needs, and optimize your business travel expenses.

17. Deduct eligible business expenses from your company’s taxable income during tax season

Tax deductions for travel expenses can help optimize the cost of business travel. Create a detailed expenses list (with or without an expense management tool) to identify which work expenses constitute tax deductions at the end of the year. Eligible expenses may include the cost of airfare and other transportation, accommodations, meals, business-related communication and business events.

18. Evaluate supplier contracts

To find opportunities to negotiate better rates and payment terms, review the terms you’ve set with business travel suppliers like airlines, hotels and car rental companies. For example, they might suggest switching payment methods to maximize savings. Virtual cards also offer the same convenience and security benefits as physical corporate cards - all while also enabling you to control spend via the amount, time period, type and location of transactions.

In summary: Why to optimize your business travel expenses

Optimizing business travel expenses requires a strategic approach that involves planning, monitoring, and continuously improving travel policies and practices. These 18 strategies can help you and your business manage travel costs – all while improving the way your employees travel to drive your business forward.