Consumer confidence recently dropped to its lowest level since 1980. U.S. stock indexes fell for a fourth consecutive week. Economic uncertainty has left companies in a state of panic, many predicting the worst is actually yet to come. And that means lots of scrambling to identify every possible way to cut expenses—headcount reductions, hiring and pay freezes, and even eliminating business travel altogether.
According to a recent study by the folks at Replicon, the market leader in web-based timesheet and expense management software, businesses spend an average of $440 per flight, an amount that’s more than 25% higher than the average cost of domestic airfare. Throw in hotels, taxis, meals, parking, and entertainment, and on-the-road business expenses can add up fast.
But before making major cuts to business travel, companies need to know what’s actually going on internally. Thanks to products such as IBM’s Global Expense Reporting Solutions, Oracle's Travel and Expense Management, and Replicon’s Web Expense, companies are able to automate and streamline their entire travel expense reporting process. They can access a real-time snapshot of where their money is going, something that would have been impossible if they were using Microsoft Excel or a paper-based system.
Web- and cloud-based applications make it possible to look at actual data and make more strategic decisions around where companies spend their money. That way, they can decide to optimize their travel dollars to support relationships with key clients by diverting them away from less profitable projects. "Sometimes high expenses might not be bad," says Lakshmi Raj, cofounder and co-CEO of Replicon. "Companies want to keep their best clients happy."
Automating internal controls can also lead to significant productivity gains. Employees will spend less time submitting and processing expense reports, will be less likely to lose those pesky receipts, and as a result can use the time saved on more value-added, customer-focused duties.
If you don’t have a web- or cloud-based travel expense management solution, no need to panic. Instead, look for other creative ways to maintain client relationships without having to cut your business travel altogether. Start by considering the following low cost alternatives:
- Cluster visits around trips to meet with key accounts
- Use web-conferencing applications such as GoToMeeting
- If all else fails, just pick up the phone
What other strategies would you add to the list? Share your thoughts on what’s worked (and what hasn’t).
[Image: Flickr user runningclouds]