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.