A business travel budget for a small company is one typical trip costed properly, multiplied by the travelers and the trips a year, and then corrected every quarter by what the trips actually cost. It is not last year's card statement plus a margin, because the card statement mixes the fare with the client dinner and never says which trips were approved. The free business travel cost estimator on this site costs the typical trip and multiplies it to the year; Perdiemo Pro keeps the estimate beside the bookings for each real trip, so the budget is corrected by the record. This page is how to build the budget and what to do with the difference.
Cost the typical trip, not the average one
The estimator takes the fare, the nights, the hotel rate, the ground transport, the days at the allowance and the incidentals per traveler. On the worked example a four-day trip with three nights comes to $1,547 per traveler and $386.75 a day. Use the trip the company makes most often, with the caps from the policy as the fare and the rate, and the allowance the company pays. That figure, not an industry average, is the unit of the budget.
Multiply, then split by destination
Travelers times trips a year times the typical trip: two travelers making ten such trips is $30,940 on the worked example. If the company has two or three regular destinations with different fares and rates, cost each and add them, because a Chicago trip and a Denver trip are different budget lines. The travel policy worksheet's annual ceiling is the upper bound: every trip at the caps; the budget sits below it.
Correct it from the record, quarterly
Each real trip in Perdiemo Pro carries its estimate and its bookings. Where actual runs over estimate, the estimator's incidentals line is usually short; where lodging runs over, the nightly cap is being waived; where the fare runs over, the lead time is not being kept. Read the three each quarter and move the budget line or the policy clause, whichever is wrong. A business travel budget corrected this way converges in a year.
What the budget excludes
The claim after the trip: reimbursement is the expense process, and the budget is for what the company approves before the trip. Trips not through the request form: if they are not on the record they are not in the budget, and that is the argument for the form. Conference fees and the like belong in the incidentals line per trip, not in a separate pot nobody reconciles.
Questions people ask about business travel budget
How do I build a business travel budget?
Cost a typical trip in the estimator, multiply by travelers and trips a year, split by regular destination, then correct quarterly from the estimate-against-actual on the record.
What is a reasonable business travel budget per trip?
Yours: the worked example on the estimator is $1,547 per traveler for four days with three nights. Change the fare, the rate and the allowance to the company's and the figure is the company's.
Should the budget use the federal per diem rates?
Many small companies use the GSA's standard lodging rate as the nightly cap and the meals rate as the allowance; the estimator takes whichever figures the company chooses.