Take control of your business travel with a managed travel program

Business and corporate travel are very different from years past. Remote and hybrid workforces have become the norm, and a managed travel program has become essential for many businesses. Once tightly controlled from central office locations, business travel is now often left in the hands of employees who submit hotel and airline receipts for expense reimbursement. Because of this, it’s become more difficult to manage travel expenses.

Relinquishing control over travel expenses can negatively affect your business’s profitability. Employees may have different perspectives on business expenses, so booking travel accommodations that work best for the business may not be their priority. Extra amenities on planes, room service at hotels, and upgraded rental cars are areas where extra costs are prevalent. For companies that spend more than $1 million per year on business travel, a managed program can offer a solution to help with risk management.

Most companies can benefit from a managed travel program. Some small businesses may not need managed travel right now, but setting up a corporate travel policy early on can benefit them once they do start traveling for business.

This article will explain what managed travel is, highlight the benefits, and lay out some travel and expense (T&E) management strategies that can help streamline your company’s travel expenditures. We’ll also touch on an automation-driven alternative to managed travel that can give you additional flexibility for your employees and control for your finance teams.

What is a managed travel program?

A managed travel program is a system by which a company manages corporate travel arrangements and expenses for its employees. Travel management can be done by a travel management company (TMC) that manages your corporate travel logistics or by a central team within the company responsible for booking flights, hotel rooms, rental cars, and other travel-related necessities. With managed travel, all arrangements and accommodations are made for employees.

The primary objective of managed travel is to manage costs and expenses. This is particularly important for companies with remote workers that have varying points of origin and travel routes. It’s more challenging to find cost-saving opportunities in this scenario. With multiple employees traveling from one location, bulk discounts may be available.

Implementing an internally managed travel program requires real-time expense management, a dedicated team that knows how to shop around for the best deals, and, in some cases, travel management software. To streamline their job, the company will also need a comprehensive T&E policy and guidelines on how much money is allocated for travel per person. Having both simplifies budgeting.

Managed travel vs. unmanaged travel

Unmanaged travel is a system where travel arrangements are left up to employees. Employees self-book flights, hotels, and cars, then submit expense reports and requests for reimbursement. Unmanaged travel gives the employee a lot of freedom, but without the right tools in place, it takes cost control out of your company’s hands. Implementing managed travel can optimize your business’s corporate travel planning.

That’s not to say that unmanaged travel doesn’t work for certain companies. Some circumstances make managed travel more of a burden than a blessing. For bigger businesses, however, with multiple employees traveling, managed travel is usually a good fit.

What are the benefits of a managed travel program?

The most obvious benefit of a managed travel program is the ability to control cash outflows related to employee and executive travel. If your company plans to implement a managed travel program, it’s not just for the sales team and purchasing agents—owners can also benefit from having travel expenses managed. Here are some of the reasons why:

1. Managed travel saves time

Unmanaged travel is time-consuming for everyone. The traveler needs to take time away from their regular work to research travel options, including hotel rates, airfare, rent-a-car deals, and more. They also need to spend time calling airlines and hotels to change flights and reservations. They won’t do this during their personal time. As the business owner, you’ll be paying for those hours. Implementing a managed travel program puts teams back to work on more productive tasks.

2. Boost ROI on travel spend

Business travel should ideally produce some type of return for the company. As an example, conferences are great for generating leads. Sticking to a travel budget when purchasing trips and getting the best prices on goods and services when making travel arrangements can be complicated and tedious. Travel costs need to be deducted from the ROI of each trip, so saving money with a managed travel program increases the company’s net profit margin.

3. Improve policy adherence

Large and small businesses alike have expense policies. Unfortunately, when employees are left to make their own spending decisions while traveling, those policies aren’t always followed to the letter. Denying a reimbursement for policy reasons doesn’t promote goodwill in the workforce. Controlling the spending with managed travel eliminates that problem ahead of time.

4. Simplify reporting and analytics

Putting together expense reports and reimbursement receipts for reporting and analytics is a time-consuming and error-prone process. A managed travel program has a central database and reporting system that keeps track of the numbers as you go. Purchases go into the appropriate business expense categories, and you can run and analyze reports with the click of a button.

How to get the most out of managed travel

Deciding to implement a managed travel program is only the first step; getting the most out of your program requires additional work. Ideally, you’ll want to use software with expense automation and reporting features that give you real-time numbers. You’ll also need to get all your employees on board with the new system. Here’s how to do that:

1. Create a corporate travel policy

The admins of your managed travel program need parameters they can work within. That's where a corporate travel policy comes in. A travel expense policy stipulates the rules and regulations regarding employee travel for business. It defines what expenses can be claimed under corporate travel and sets clear rules for both employees and your travel management department or company to follow.

2. Assign employees a corporate charge card for per diems

Allowing employees to use their personal credit cards and submit reimbursement requests is not part of an effectively managed travel program. Some companies believe in doing all the booking but letting employees govern their own expenses. With corporate cards, you can put limits on what they spend and block charges that don’t qualify as business expenses.

3. Emphasize the importance of receipts

At some point, your company or the IRS may want to do an expense audit. Managed travel programs have the reporting and transaction ledgers for that, but expense receipts are the proof of purchase you need to validate your expenses. Emphasize the importance of receipts to your employees. They should be able to use their mobile devices to scan and save digital copies.

4. Have the travel manager keep a database of travel providers

A third-party TMC will already have this in place. If you’re managing travel in-house, have the admins build a database of travel service providers for flights, lodging, car rentals, and so on This will be time-consuming upfront, but it will eventually start to save your company time because booking information will be readily available. A central database also helps if you transition to new travel managers.

5. Review travel ROI and spending behavior frequently

One of the best features of a managed travel program is that the numbers you need to calculate travel ROI and analyze spending behaviors are all available in one place. Review these carefully and frequently to find ways to cut costs and improve the company’s bottom line. Managed travel should save you money, increasing profitability.

6. Use reporting and analytics to plan ahead

Planning conference schedules and buying trips can be risky if you try to do it too far in advance. The reporting and analytics you can glean from a managed travel program can give you the insights you need to plan ahead. Schedule spending and budget reviews on a monthly or quarterly basis, and adjust travel schedules when needed.

Should my company switch to managed travel?

Any business with employees that travel needs a managed travel program. The most obvious benefit of a managed travel program is the ability to control cash outflows related to employee and executive travel.

Planning business trips for employees can be complicated. Finding the best prices on accommodations, flights, and other expenses, and then reconciling everything after the trip, is time-consuming and error-prone. If your company has a sales team or other employees that need to travel within the next six months, now is the time to switch to a managed travel program. Trade shows, conferences, and other corporate events are back in full swing after several years on the ice.

Some of the tools used for managed travel, like expense automation and corporate charge cards, can be useful for non-traveling businesses as well. Ramp has both these features, on top of real-time reporting and analytics on your spending. We also integrate directly with the most popular accounting software, like QuickBooks and NetSuite.

Ramp Travel: Integrated travel booking and expense management for your managed program

Ramp combines corporate cards with expense management software, AP automation, procurement, and, now, corporate travel booking with Ramp Travel:

• Set corporate travel policies that detect and block out-of-policy spend before trips even start
• Low rates, rewards, and an intuitive booking experience with flights and hotels listed in one interface
• Integrations with apps like Uber, Lyft, Gmail, and Outlook automatically generate and categorize travel expense receipts

Ramp Travel gives you the complete package for your managed travel program: effective controls, low rates, real-time visibility, and a hassle-free booking experience for your entire company. Get better ROI from your business travel with Ramp.