What is Business Travel?

For much of corporate America, regular business trips are an essential part of the job description, so it’s critical to understand the nuances of business travel to simplify and optimize your company’s travel program and maintain a competitive edge. In this article, we dive into modern business travel to explain what it is, why it matters, and how to maximize the benefits of your corporate business travel management program.

The different types of corporate travel

While a variety of activities fall under the corporate travel umbrella, travel for business purposes can be categorized into several distinct types, each serving different purposes. Business trip examples include:

• Client visits: Client visits are crucial for building and maintaining strong business relationships, closing deals, or providing customer support.
• Meetings and conferences: Meetings, conferences, and seminars create opportunities for networking, learning, and exchanging industry knowledge.
• Trade shows and exhibitions: Trade shows and exhibitions provide a forum for companies to showcase their products and services, stay up-to-date on industry trends, and connect with customers and partners.
• Training and development: Training programs, workshops, and courses that enhance employees’ skills and knowledge are essential for solid professional development.
• Field work and site visits: Industries like construction and manufacturing often require employees to travel to specific sites, such as construction projects to conduct inspections or provide on-site support.
• Internal meetings and team building: Companies with multiple branches or a remote workforce often organize internal meetings and team-building activities to foster collaboration and build a stronger team dynamic.

What types of companies travel the most?

While most companies require some degree of business travel, in some industries it’s at the core of what they do.

• Consultants: Often travel extensively to work on-site with clients, conduct assessments, and implement solutions.
• Sales representatives and marketing professionals: Travel to meet clients, attend trade shows, and promote their products or services.
• Tech workers: Frequently attend conferences, training sessions, and client meetings to stay ahead, and visit clients to troubleshoot issues and provide support.
• Financial professionals: Meet with clients, attend industry events, conduct research, and do their due diligence on potential investments.
• Medical professionals and pharmaceutical representatives: Travel to conferences, research facilities, and client sites to share knowledge and promote new treatments and products.
• Engineers and manufacturing employees: Must visit production sites, conduct inspections, and confirm quality control at work sites.

The benefits of business travel

After taking a nosedive during the pandemic, business travel is back and it’s stronger than ever. Virtual meeting tools like Zoom, Microsoft Teams, and Google Meet may have transformed the way we work in recent years, but there are plenty of times when even the most effective technology just can’t replace a face-to-face meeting. Whether you work for a large international corporation or a small business, business trips are essential for:

• Building relationships: Face-to-face interactions are still the gold standard for building trust and rapport with clients, partners, and colleagues. Having personal connections can significantly impact business outcomes, and while day-to-day communications can be easily handled over phone or email, in-person business meetings are much more effective for creating a sense of connection.
• Closing deals and breaking new business: In-person meetings can be essential when you’re negotiating complex contracts, closing a big deal, or branching into new markets and need to identify growth opportunities.
• Providing networking opportunities: Industry events and conferences provide opportunities to network with peers, learn from industry leaders, and identify potential prospects.
• Communicating better: A lot of nuance can get lost over email. In-person meetings facilitate clearer and more effective communication, reducing the likelihood of misunderstandings and fostering better collaboration.
• Supporting employee development: Getting out of the office and on the road exposes employees to different business needs, practices, and environments, helping them to broaden their perspective and gain new insights.

The tax advantages of business-related travel

Corporate travel doesn’t just help advance business goals—expenses incurred for work purposes can help lower your company’s taxable income and reduce your overall tax liability.

The IRS defines business travel as: “when employees must travel away from their tax home or main place of work for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day’s work and they need to sleep to meet the demands of their work while away.”

Business travel deductions are available under these conditions as long as travel expenses are “ordinary and necessary” and aren’t lavish, extravagant, or for personal purposes. According to the IRS website, tax-deductible expenses include:

• Travel by airplane, train, bus, or car.
• Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel to a work location.
• Shipping of baggage and sample or display material between regular and temporary work locations.
• Using a personally owned car for business.
• Lodging and meals.
• Dry cleaning and laundry.
• Business calls and communication.
• Tips paid for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to the business travel.
• Travel expenses for conventions are deductible if attendance benefits the business; there are special rules for conventions help outside North America.

To claim business travel expense deductions on your company’s tax return, well-organized record keeping and expense tracking is essential. Your corporate travel policy should establish a clear process for filing expense reports and should provide an easy way for employees to scan and organize receipts and other documents that will be needed come tax time.

Business travel can offer huge benefits to your company, but it must be carefully managed to make sure the expense doesn’t outweigh the benefits. Enhance your corporate travel experience with tailored solutions from American Express Global Business Travel—contact us today to learn how we can support your business travel needs.

https://www.amexglobalbusinesstravel.com/business-travel-solutions/