Learn More About Travel Management Software
What is Travel Management Software?
Travel management software is used for booking and managing travel arrangements online for business purposes, as well as to track and report previous trips. These tools allow companies to enforce and track their travel policies and consolidate travel invoices for expense and reporting purposes.
Companies use this software to simplify purchasing decisions, centralize records of employee travel expenses, and control corporate travel budgets. Travel management solutions provide users with a tool for booking and automatically reporting their travel purchases, rather than using individual agents or submitting self-purchased receipts to an expense management product. Both small businesses and enterprise companies can benefit from using travel management software.
Employees at companies that don’t use travel management software have traditionally booked travel for businesses through a website or travel agency, then submitted an expense form to be reimbursed. The new way, for organizations of any size, is for employees to book travel themselves using travel management software that already includes the company travel policy and approval workflows. This software also includes company payment details so the employee can pay for the travel without reimbursement, and the company is able to easily track their spend for reporting reasons.
What Types of Travel Management Software Exist?
Enterprises
Enterprise travel management software is often included in a larger suite of business tools or offered as a standalone product that has the option to integrate with other travel management tools, such as expense management software. Enterprise software can sometimes be compared to modernized online versions of travel agencies.
Small and medium-sized businesses (SMBs)
SMB travel management software tends to be more user friendly and is relatable to consumer mobile apps, especially on the booking side. Similar to traditional enterprise options, travel platforms designed for SMBs tend to integrate with other corporate tools, such as expense management and mileage tracking software.
What are the Common Features of Travel Management Software?
The ideal travel management platform should manage the entire process, from booking travel, to expense submission, to reporting.
Interactive booking interface: Employees are able to find the best inventory and rates on an easy-to-use interface. They can book travel on behalf of a colleague or for themselves, which includes saved travel details, payment methods, loyalty programs, travel preferences, and more.
Company guideline filters: This feature allows companies to control the travel options available by filtering listed prices that fall within their company’s guidelines. This helps teams stay within budget and in compliance.
Calendar and scheduling coordination: Calendar and scheduling coordination is an important feature because it allows other team members to plan their travel if necessary. It gives managers the ability to track their employees’ whereabouts, and plan meetings and calls around their travel schedules.
Expense capture, submission, and tracking: Many travel management platforms have the functionality for travel employees to digitally import and submit receipts for reimbursement. This feature allows them to track the progress of their submissions so they know when they’ll be reimbursed.
Reporting: Employees can create and submit expense reports through the software, as well as view past reports and expenses. Managers use the reporting feature to track their team’s travel budget and forecast future spend.
What are the Benefits of Travel Management Software?
Travel management software can make the entire booking process easier and more efficient for users by housing all of the steps in the process in one platform.
Creates a comprehensive interaction booking interface: Employees are able to search, compare, and book travel directly through an interface, either for themselves or for another employee within their company. This interface can also save travel preferences, loyalty programs, and payment methods all in one place.
Integrates corporate travel policies to automate compliance: The ability to integrate corporate travel policy directly into travel management software reduces travel spend by helping teams meet spend and budget objectives. These policies help to clarify the types of expenses employees can claim, refuses to reimburse travelers for claims that aren’t compliant, and allows travel managers to make sure their team is optimizing their budget and staying within company policy guidelines. The automation of company policy enforcement also ensures no fraudulent expenses are accidentally submitted and approved.
Incorporates expense management tools: Expense management tools help managers and accounting teams by categorizing expenses that more accurately organize and optimize the tracking of travel costs. These tools manage the approval workflow for travel expenses to be processed and reimbursed, as well as analyze large amounts of expense transactions that can be used to forecast future spend and create budgets.
Enhances reporting capabilities: Reporting tools in travel management software improve data-driven decisions and make travel management more effective overall. These tools help to identify noncompliant expenses or bookings more quickly and can recommend actions that can be taken to improve future results. Reporting also manages travel programs more effectively by monitoring travelers and identifying ways to save money.
Who Uses Travel Management Software?
Travel management software can be used by anyone employed by companies of all sizes. Most commonly, it is used by the following types of employees:
Sales teams and consultants: Any salesperson who is required to travel to meet a current or prospective client would most likely use travel management software to research and book their travel, whether it’s airfare, a hotel, or a car rental.
Accounting teams: Accounting teams use travel management software to leverage its reporting and forecasting capabilities. This allows them to track spending in relation to travel, and make critical decisions in regards to travel budgets and the planning of future spending limits or restrictions.
Managers: Managers use this software to review and approve employee travel and expenses, as well as gain visibility into overall travel spending. Using reports and other insights, they are able to identify trends to optimize savings and achieve better clarity when working with suppliers on preferred corporate rates. They can also utilize this software to track their employees’ whereabouts and gain access to their travel itineraries.
Software Related to Travel Management Software
There are a number of solutions that benefit accounting departments and procurement managers, which also integrate with, or provide similar features of travel management software. A few examples of these software categories are listed below:
Expense management software: Expense management software simplifies and automates a business’s expense entry, streamlines review, eliminates paper trail, and reduces administrative effort. It allows administrators to have full visibility and track employee use of business financial resources. This software analyzes overall expenses, identifies cost-saving opportunities, and controls excessive spending.
Mileage tracking software: Mileage tracking software tracks and manages the distances traveled by employees for business purposes. This type of software is used to log miles for reimbursement and tax purposes. Mileage tracking tools are used by mobile employees such as salespeople, field service technicians, or project managers. Accountants also use mileage tracking solutions to calculate travel costs, while department managers utilize these products to review and approve expenses.
Challenges with Travel Management Software
Travel management software solutions can come with their own set of challenges.
Integration: Integration with expense management and accounting is critical to transfer data between systems. Information on travel booking needs to match with actual expenses, which are then consolidated and assigned to various cost centers in accounting. If the data isn’t accurate and consistent across all systems, the company or employee may lose money.
Privacy: Privacy is a significant concern because employees may use their own credit cards to pay for travel services, and they provide personal banking information for reimbursements. Also, employees may mix business and personal travel, which means that they may use their credit card for both. Finally, personal information that is required for booking a flight or a hotel room may be included in expense reports. Employers need to make sure that only certain employees and managers can access private data. Protection against external threats is also necessary.
“Bring your own software” trend: Bring your own software and apps is a trend that makes employees use software that is not authorized by the company. While employers usually provide travel management software, employees may use other tools and apps for booking travel, managing receipts, or for loyalty programs.
Which Companies Should Buy Travel Management Software?
Travel management software can be used by any company, of any size, that has employees who travel for work. Even if an employee only needs to book a rental car, or expense a lunch, this can all be done with travel management software. There are many platforms designed for companies of all sizes, from small companies with only a few employees to enterprise companies with thousands of employees.
How to Buy Travel Management Software
Requirements Gathering (RFI/RFP) for Travel Management Software
When selecting travel management software, it is important to first look at how travel within the business operates, and then familiarize oneself with the different types of software available. There are a variety of options when it comes to travel management software products, including those designed for the business needs of small- and medium-sized businesses.
Compare Travel Management Software Products
Create a long list
The main purpose of travel management software is to make everyone's life easier; this includes the employee who is booking travel, the manager who is approving the travel, and the finance and accounting team who is tracking travel spend. It’s important to first create a long list of solutions that bring all of these functionalities and tasks together in one dashboard. Buyers may consider including software that offers a mobile app for managing travel on the go.
Another factor to consider when creating this list is how user friendly the software is in comparing and booking travel, as well as capturing and submitting expenses. Oftentimes, travel management software built for small businesses is more user friendly but has fewer features than enterprise software.
Create a short list
After reviewing and researching the software on the long list, the buyer can whittle down this list based on the available budget. Travel management software is available to suit all budgets while some general travel management applications could possibly be downloaded for free or bought off the shelf at a lower price.
Buyers must keep in mind, however, that the more specialized a software is, the more expensive it gets. This is the case because the user base for specialized software is usually relatively small. If the company wants something specific to their industry or customized for the business, they should be prepared to pay a premium.
Conduct demos
As a rule of thumb, companies should make sure to demo all of the products that end up on their short list. During demos, buyers should ask specific questions related to the functionalities they care most about, for example, one might ask to be walked through how to search and compare rental car companies, how to run expense reports, or how to import and submit receipts for reimbursement.
Selection of Travel Management Software
Choose a selection team
It is important that the travelers and managers who will be using this software are involved in the selection process. Every business is different and the users are most likely in the best position to offer an educated opinion about which one is the best choice for the particular needs of the business.
After choosing a software, buyers must remember that they don’t have to be stuck with this selection forever; most platforms allow for add-ons or modifications. However, this decision shouldn’t be made lightly because no matter what software is chosen, it will be a big time and money commitment. In order to see a return on investment (ROI), buyers can’t change their minds a few months later and switch software again.
Negotiation
Negotiating a software contract is important to minimize risk, whether it is in terms of performance protection, security protection, or simply making sure that both parties are in complete agreement with what to expect from the other.
If the business has the cash flow, they could ask for a discount in return for annual upfront payment, and many software providers are happy to make that deal. Other times, a software provider may offer unlimited usage if the buyers pay upfront instead of paying a monthly or quarterly package price.
Buyers should also determine if they will need help implementing the travel management software or integrating with another system. Usually, a software provider's first offer will include some implementation services in a given timeframe. Buyers can ask for these services to be removed if they can manage it themselves, or if a third party can do it at a lower fee.
They also need to decide for how long they will need this software. If the company will use the software for years and years, the buyer can negotiate longer terms which sometimes results in more favorable pricing.
Final decision
The final decision should be based on all the information gathered previously. Businesses should try to prioritize needs and select the solution that meets most of, if not all of, their requirements. Companies must remember that there is no one perfect software, but there is one that is best for their business.
Travel Management Software Trends
In-house platforms
Much like large travel agencies often have their own proprietary booking platforms that their corporate clients use, some large organizations have in-house travel agents that use custom-designed, dedicated software tools. Having a custom made platform is quite expensive to create and maintain, but some companies find more value in having this flexibility and control, than using an outside resource that may have too many restrictions, or not robust enough capabilities.
Bleisure travel
Bleisure travel, or the activity of combining business travel with leisure travel, is becoming more and more popular, especially amongst younger travelers. As employees try to digest the content of their business trip, they are also trying to explore new regions, while relaxing and recharging after a busy week. This trend is also posing new questions and challenges for travel managers, such as, what policies should they set regarding non work travel purchases, and could these non work travel purchases be covered by the organization in some instances? For example, when the differences in airfare are offset by lower travel costs elsewhere.
