Base Travel Expenses

As business travel expenses nose up, companies are Recognizing that better cost-management techniques can make a differenceUS. Business travel expenditures rocketed to more than $143 billion in 1994, according to American Express’ most recent poll on business travel management. Private-sector companies invest an estimated $2,484 per employee on entertainment and travel, a 17 percent growth over the previous four years.Corporate T&E outlays, now the third-largest controllable expense behind sales and data-processing expenses, are under new scrutiny. Businesses are realizing that even a savings of 1 percent or two percent can translate into millions of dollars added to their bottom line.Savings of that order are certain to get management’s attention, which is a necessity for this type of project. Involvement starts with understanding and evaluating the components of T&E management so as to control and monitor it more effectively. In spite of senior management’s support, the road to economies is rocky-only one in three businesses has successfully instituted an internal program which will help cut travel expenditures, along with the myriad aspects of travel are so overwhelming, many firms don’t know where to get started. “The industry of travel relies on data,” says Steven R. Schoen, creator and CEO of The Global Group Inc. “Until such time as a passenger really sets foot on the airplane, they have [just ] been buying information. “If that is the case, information technology seems a workable place to hammer out those elusive, but exceptionally sought-after, savings. “In addition, many businesses are focusing on quality applications that include sophisticated process improvement and reengineering efforts designed to substantially enhance T&E management procedures and reduce indirect costs. “As companies look to technology to make prospective savings a reality, they could get very creative about the methods they employ. The Great Leveler Centralized booking systems were the exclusive domain of travel brokers and other business professionals. Travel-management applications, for example Trip Power and Travel Net, instantly sprang up, providing businesses insight in where their T&E dollars are being spent. The software tracks spending tendencies by interfacing with the company’s database and supplying access to centralized reservation systems which offer immediate reservation advice to airlines, hotels and car rental agencies. These programs also enable users to create computerized travel reports on price savings with details about where discounts were obtained, hotel and car usage and patterns of traveling between cities. Actual info gives corporations added leverage when negotiating discounts with travel suppliers. “When you have the information, you do not have to go back to square one every time you decide to modify agencies,” states Mary Savovie Stephens, travel director for biotech giant Chiron Corp.. “Software gives us unprecedented insight to how employees are spending their journey dollars and better manage to negotiate with travel service suppliers,” says Robert Lerner, director of credit and corporate travel services for Sybase Inc. “We have better access to data, faster, in a real-time surroundings, which is expected to bring us big savings in T&E. We have control over our travel information and no longer need to rely exclusively on the agencies and airlines. “The price for this privilege is contingent upon the quantity of business. One-time buys of travel-management applications can run from under $100 to more than $125,000. Some software providers will adapt smaller users by selling software piecemeal for $5 to $12 per reserved trip, nevertheless a significant savings in the $50 industry norm per trade. No More Tickets Paperless traveling is catching on faster than the paperless office did as both service providers and customers work together to decrease ticket costs for business travelers. Possibly the most cutting-edge of these advances is “ticketless” travel, which nearly all significant airlines are testing. Meanwhile, travel providers and agencies are experimenting with new technologies to enable travelers to book travel services via the world wide web, email and unattended ticketing kiosks. Best Western International, Hyatt Hotels and several other major hotel chains marketplace online. These solutions reduce the need for paper and also offer far better service and such peripheral advantages because increased efficiency, improved tracking of travel expenses and trends, and price reduction. Dennis Egolf, CFO of the Veterans Affairs Medical Center in Louisville, Ky., recognized that the medical centre’s decentralized place, a quarter-mile in the hospital, made efficacy tough. “We had been losing production time and things got dropped,” he says. “Every memo had to become hand-carried for approval, and we took seven different copies of each travel order.” Because of this, Egolf tried an off-the-shelf, paper-reduction software bundle designed for the federal government. The software allows the hospital to handle traveling online, from tracking per-diem allowances and calculating expenses to creating cash advance forms and authorizing reimbursement vouchers. The software also lets the hospital maintain a running account of its traveling expenses and its remaining travel budget. The program has helped the hospital reduce file processing period by 93 percent. “The original goal focused on managing employee travel without newspaper,” he says. “We have achieved that goal, in part because of the efforts of their team and in part due to the precision of the software.” For more detail click on this link

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