Business travel can be essential for meeting clients, showcasing products in new areas, attending training sessions and seminars, and a range of other purposes. However, business travel can get also be very expensive. To ensure travel costs stay under control, there are a variety of strategies you can explore.
To keep costs under control, map out business trips as far in advance as possible, and outline projected spending goals for each trip and for the year as a whole. You can do this on your own with a simple spreadsheet, but as your business grows and you start sending multiple employees on journeys, you may want to use a budgeting app.
For example, IQBoxy allows you to create a monthly budget, but instead of using the app to budget for all your business expenses, you can opt to use it exclusively for travel budgeting. Additionally, the app offers tools to track mileage, upload receipts, approve employee reimbursements for travel expenses, and more. As of 2016, one user can access budgeting and receipt storage for free, but if you want access more tools, expect to pay $5.99 (USD) per user per month.
Tax Deductions and Spending Goals
To ensure your business gets every possible deduction for business travel, you need to track your expenses meticulously, and as explained above, apps such as IQBoxy can help. Beyond this, you may want to use tax deductions and limits to help you create your travel budget.
For example, the Canada Revenue Agency (CRA) allows business owners to write off the cost of attending two conventions per year. To maximize your deductions, you may not want to exceed this amount. Similarly, the CRA only allows you to claim 50% of reasonable food expenses or as of 2015, a daily maximum of $51, and you don’t need receipts for this latter option. You may want to crunch the numbers both ways to determine what works best in your situation.
Assessing Return on Investment
Budgeting can help keep costs under control, but keeping travel expenses relatively low shouldn’t be your only priority. You should also assess the potential return on investment of every trip. Unfortunately, this can be hard to do, as many benefits are intangible.
If the trip is focused on meeting a client to talk about a deal, you simply need to consider the potential revenue from the deal. If planning any other type of trip, try to hone in on specific advantages such as networking opportunities, training, and exposure to new markets, and closely consider these issues before booking the trip. Also, assess the efficacy of each trip after it is over. If it’s a trade show or convention, in particular, the post-trip analysis can help you decide whether that event makes the cut for next year.
Ideally, your employees should have spending guidelines for their business trips, but you should also require itemized receipts. Rather than offering blanket approvals on all reimbursement requests, look over everything carefully and ensure expenses are warranted. Finally, use itemized expense reports to identify overspending and areas for improvement.