The True Costs of Unmanaged Business Travel

Unmanaged business travel can cost businesses a lot more in the long run, and it's not just money. Here's a look at some of the issues involved with unmanaged business travel.

The True Costs of Unmanaged Business Travel

Most people think managed travel is all about arranging transportation, accommodations, and allowances for employees and executives on official work trips. However, it is much more than that! In recent years, it has transitioned from mere option to necessity—and it is not something everyone can do effectively.

Managed travel has the following characteristics that make it different from standard travel services:

  • Trip planning and booking
  • Controls and policies for employee travel, billing, approvals, etc.
  • Expense tracking and reporting
  • Data and insights

Corporate travel management brings peace of mind for all involved, but also clear routines and helpful numbers for your logistics staff.

Think of having a corporate travel policy as a future-proofing method, especially as your company grows. The earlier you set rules for your different departments and functions, the better off everyone will be. Your expense management solutions can then adjust and expand along with your business.

What happens when your corporate travel is unmanaged?

You may think you can DIY your corporate travel right now, but we say that’s a bad judgment call. Not having an appropriate travel policy in place would actually cost you more in the long run—and we’re not just talking about money!

1. Your employees would have productivity issues

Anything that keeps your employees from accomplishing their tasks would come at a cost to you. In this case, they would end up spending hours searching for and researching flights and hotels on multiple websites instead of focusing on their jobs.

Some employees won’t stop there. They would also be concerned about the tasks that corporate travel management would usually handle. And not having flexible guidelines, particularly for personal or special concerns, leads to more time lost at work.

These scenarios mean your people will take longer to do tasks that others can do at the outset. Then they would use whatever time they have left to play catch-up before they go. That’s not quite the level of productivity or efficiency you want to see in them.

2. There would be a lack of visibility in bookings

Here’s another way to think about the impact of unmanaged travel on company productivity. Without an effective travel policy, your employees would have to make their bookings on several consumer sites and pay at consumer prices.

A single booking change leads to what would most likely be a long tussle with customer support. Cumulative changes will equal a significant travel headache that eats up even more time designated for work.

When it comes to managing travel for companies, it’s vital to have a central resource that offers all the data you need exactly when you need it. You get visibility and control of all employee bookings this way, but overall expense management will also be easier to handle.

3. You will experience compliance issues

If you don’t have a managed travel policy, your employees won’t have anything to comply with. The result? Their travel bookings would be all over the place, as stated above.

However, a more difficult problem comes up here. The longer your company goes without a travel policy, the more difficult it will become for you to implement one. Employees can neglect or forget to provide the required paperwork or fail to follow your desired approval workflows.

4. There would be no control over spending

No policy, approval system, or corporate credit card? Then prepare to say goodbye to your budget, too!

That’s the next logical effect of doing business without corporate travel management. Because there are no set rules on managing their bookings and expenses, employees will book expensive or extremely convenient flights and hotels. This would then drive your total costs up.

Rebooked flights and accommodations due to unforeseen circumstances can add to the headache. Moreover, some expenses may not be reported or supported by receipts at all, rendering expense management useless.

5. Your duty of care will be compromised

A company is responsible for its employees, whether they’re in the office or travelling elsewhere to represent you. This is called “duty of care.”

According to Security Magazine, duty of care is different from managed travel in that the former is a “moral and/or legal obligation” to ensure your employees’ safety or well-being. The latter is the actual “well-rehearsed” plan to accomplish those goals.

With unmanaged travel, you won’t have a reliable way of knowing where your employees are or are supposed to be at any given point during their trip. Also, there will always be factors beyond your control: rebookings, emergencies, inclement weather, transport-hub closures, and events concerning labour, political, and economic issues.

Therefore, you must control what you can (and as soon as you can) to abide by your duty of care.

6. Expense reporting would become more complicated

Rarely do employees have direct access to the company’s finances or hold enough initial cash from the company when they reach their destination. Often, they shell out their own money, then present receipts for reimbursement when they return.

Look at point 4 on our list, then think about manual expense reporting and low compliance rates. If your company does unmanaged travel, this entire inefficient process would add to everyone’s burden - from yourself and fellow employees to approvers, the finance department, and others.

Automated expense management solutions significantly reduce this burden, and provide a centralized system covering everything from bookings to invoices and reimbursements.

7. You won’t have any data or insights for future corporate travels

Unmanaged travel won’t just lead to confusion, stress, and rising costs. It also shuts you out because you don’t have any access to the data you need to organize and budget future work trips.

This would be the most significant risk you’ll take in not managing your corporate trips. The lack of accurate data may lead to a “managed” travel policy with inadequate and rigid measures or cost ceilings that your company will quickly exceed or barely reach.

What do you need to manage your business travels?

As we mentioned earlier, it’s best to create and implement a managed travel policy early on, even if your company is still in its growing stages. It will address all seven of the problems we tackled here, but also protect you and your employees from being caught by surprise by future circumstances.

One key thing to remember when writing your corporate travel policy is that it must benefit both you and your people! For them, it has to be flexible, easy to comprehend, concise, and specific to their needs. That way, it would be easier for you to sell it to them - and they’d be more eager to comply with it.

On your end, it must cover research and comparisons, bookings, automated expense reporting, and insights backed by hard data.

Travelstop’s features cover all these concerns for both parties, and without the restrictions that other services implement! With us, you won’t have to worry about any hidden fees, usage limits, or long-term agreements. And right now, Travelstop is free for a limited time. (But in the future, you’ll pay only $10 per active user per month.)

Sign up at the Travelstop homepage, and start managing your upcoming trips! You can also get our free app on the App Store if you prefer managing your expenses on-the-go!