For most businesses, the financial challenges of 2012 will continue into next year. With budgets tightening, it is important for them to review their 2012 business plan targets against their achievements and to look at ways of improving profitability in 2013.
One way businesses can save money is by being smarter with their business travel spend. Travel and entertainment make up a large portion of a small business’ indirect costs. But business travel is still considered key to improving the bottom line. According to the World Travel and Tourism Council (WTTC) report, Business travel: a catalyst for economic performance, executives say 29 per cent of their company’s new sales depend on business travel, with 50 per cent of business travellers estimating prospects converting to customers when a face-to-face meeting takes place. These are compelling statistics that would be wrong to ignore, especially in these challenging times.
Businesses need a simple process to manage the costs incurred by an increasingly mobile workforce with a variety of expenses to pay for, from air travel to hotels and car rental. In terms of business benefits, putting a corporate card programme in place can improve authorisation and budgetary controls and offer greater transparency over data, highlighting areas where savings can be made.
This can also help companies to strengthen negotiating power with suppliers. Creating a preferred supplier list can help to increase efficiency by automating processes, reducing time and administration costs. The savings are particularly important given industry reports on, for example, global airfare prices increasing in 2013, due to rising fuel costs.
Flights aren’t the only cost consideration to be taken into account, as time spent travelling has an impact on the bottom line, too. Companies should be thinking about how to maximise travel time through making the most of business airport lounges that have wi-fi, for example, enabling employees to focus on the job at hand. Fast-track access through outbound airport security and concierge services are other benefits that can be utilised to help travelling staff save time by working in transition.
Evidence abounds of the importance of business travel to overall business growth. According to the recent WTTC report, 74 per cent of executives believe business travel is “extremely” or “very” important in increasing profits. Therefore, getting better value from your expenditure is crucial. If businesses maximise their current card supplier benefits, cost savings can be achieved and reinvested into other business growth initiatives.
☛ Alan Gillies is vice president and head of UK sales at the UK division of American Express Global Corporate Payments