Why unmanaged business travel is costing your company money

Business travel has many moving pieces, which leads many companies—in hopes of saving on time, money, resources or headaches—to let employees manage it themselves. 

But does this really make sense? 

After all, you probably don’t let employees buy whatever office furniture strikes their fancy on the company dime. And you almost certainly don’t let employees manage their own benefits or payroll. 

So why do so many companies allow employees to manage their own travel? 

Let’s take a look at how unmanaged business travel might be costing your company. 

What is unmanaged business travel? 

Unmanaged business travel, sometimes known as “self-booking” lets employees make travel bookings on their own—typically by contacting travel agents or using an online booking platform that caters to leisure travelers and then submitting receipts for reimbursement. 

The drawbacks of unmanaged business travel

Generally, unmanaged business travel is touted as being easier on everyone. It provides more flexibility for employees and it requires less management.

External travel management can also be expensive, so allowing employees to simply book travel ad-hoc can appear to be more cost-effective as well. 

But is it? 

Let’s take a closer look at some of the drawbacks:

Lack of policy (or policy enforcement)

Unmanaged business travel solutions are often used by smaller companies who don’t yet have standardized booking policies. Even if you do have policies in place, unmanaged travel programs make enforcing those policies much more difficult. 

Either way, a lack of enforced policies typically creates a number of problems: 

• higher travel costs for your company 
• non-compliance with legal travel regulations 
• lack of data 
• difficult or non-existent approval processes, resulting in a lack of oversight or knowledge about where your travel budget is going 
• frustrated employees, who may unintentionally overspend due to unclear or non-existent policies 

Fragmented booking processes

Similarly, fragmented booking processes are inevitable with unmanaged business travel. When employees make their own travel arrangements, they’re likely to book travel on multiple websites, creating more invoices for your finance team to juggle. They’ll also need to front the cost and wait for reimbursement, which can cause financial…