Foundation Tendriling Vacation Expenses

As small business journey expenditures nose upward, companies are knowing that improved cost-management tactics can make a difference

US. corporate vacation charges rocketed to much more useful content $143 billion in 1994, in accordance to American Express' newest study on small business travel administration. Private-sector companies invest an approximated $2,484 per staff on travel and entertainment, a seventeen p.c increase in the last four a long time.

Company T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Corporations are acknowledging that even a savings of 1 percent or 2 percent can translate into millions of dollars added to their bottom line.

Savings of that order are sure to get management's attention, which is a requirement for this type of project. Involvement begins with understanding and evaluating the components of T&E management in order to control and monitor it much more effectively.

Hands-on management includes assigning responsibility for journey management, implementing a quality-measurement system for travel services used, and writing and distributing a formal travel policy. Only 64 per cent of U.S. corporations have vacation policies.

Even with senior management's support, the road to savings is rocky-only one in three corporations has successfully instituted an internal program that will help cut travel costs, and the myriad aspects of journey are so overwhelming, most businesses don't know where to start. "The industry of vacation is based on information," says Steven R. Schoen, founder and CEO of The Global Group Inc. "Until such time as a passenger actually sets foot on the plane, they've [only] been purchasing information."

If that's the case, information technology seems a viable place to hammer out those elusive, but highly sought-after, savings. "Technological innovations in the enterprise travel industry are allowing firms to realize the potential of automation to control and reduce indirect [travel] costs," says Roger H. Ballou, president of the Travel Services Group USA of American Express. "In addition, many providers are embarking on quality programs that include sophisticated process improvement and reengineering efforts designed to substantially improve T&E administration processes and reduce indirect costs."

As companies look to technology to make potential savings a reality, they can get very creative about the methods they employ.