CONTROLLING TRAVEL EXPENSES

John VeLora

Small companies must find ways to reduce the cost of employee travel.

Congress reduced the deduction for business meals from 80% to 50% of

the cost. No deduction is allowed for a spouse unless he or she is a

bona fide employee.

Make maximum use of frequent flier miles; Make a deal with a hotel in

cities frequently visited; rent cars only when necessary; and avoid

high-priced hotels.

Find a good travel agent who can save your staff time and money by

delivering tickets, itineraries, hotel confirmations and other travel

documents directly to your office. A good travel agent helps manage

costs and identify savings. Often airlines offer tie-in arrangements

with hotels and car rental agencies on top of frequent flier

participation. Take advantage of them.

Establish a clear-cut travel policy. Such policies set limits on

expenditures and require adherence to guidelines on when travel is

permitted and when a phone call will do. The formal policy denies

“automatic” attendance at trade shows and similar meetings.

Seek out teleconference services where both groups can visit a TV

camera room. The conference can then be held via phone and video

lines, saving travel time and travel expenses.

Employees should be required to take the lowest airfare offered within

a reasonable schedule. Try to book travel arrangements as early as

possible. Booking air travel two or more weeks in advance where the

stay includes a Saturday night can cut costs by at least 50% less than

the cost of the hotel for the extra nights. Booking on connecting

flights often costs less than booking on nonstop flights. However

layover time might be such that the savings in airfare is counter

productive.

Overnight stays should be at moderately-priced hotels and “in-room

movies” should be discouraged. There are discount hotel booking

services that negotiate lower “bulk” rates and pass them along to

smaller business.

Book ground transportation from and to the airport whenever possible

and practical. Many hotels offer free rides to and from the airport

in a courtesy van or limousine.

If you have to rent a car, book only mid-size cars or smaller cars and

inquire about free upgrades upon check in. If other automobile insurance

is in force, make sure the optional collision damage coverage is de-

clined.

Often smaller car rental firms offer better rates then the larger car

rental companies. The smaller car rental companies offer free shuttle

bus service minimizing any inconvenience.

Many hotels levy a surcharge for each long-distance call and sometimes

local calls, even those calls made on a credit card. Surcharges have

been as high as $1, and that adds up when you make 20 or 30 calls.

To save the surcharge at the conclusion of the call, press the # key

and dial the next number. That way you pay for only one call. Ask

the hotel about its phone charge policy. Use public phones whenever

possible.

Do not eat at the hotel. Ask the bell captains for the name of quality

local restaurants; they are usually less expensive and often higher

quality. Avoid tourist traps. If possible, have a big breakfast and

save money on lunch; especially if the hotel offers a breakfast as

part of its accommodations.

All expense accounts must be supported by receipts. The Internal

Revenue Code requires substantiation of travel expenses. Also, the

better the supporting records, the easier to maintain control of

expenses.

Avoid cash advances. Not only will you save on bookkeeping costs, but

the requirement of a reimbursement is an incentive for employees to

submit expense reports quickly and accurately. Keeping track of

advances is costly and time-consuming and often ends up with a loss of

control.

John VeLora is an independent small business consultant based in Los Angeles.