Trains, planes and expense reports.

What do you do when you have a ballooning business travel budget and a less-than-perfect reporting system? Try centralized travel purchasing and accounting, as Equifax did. Here's the company's unique template for controlling its travel costs.

A year ago, the national average room rate for an Equifax traveler was $125. This year, the average is $88, the result of negotiations with several hotel chains. And, by the first quarter of 1994, we plan to release a corporate directory of hotels that offer rates negotiated with Equifax that will help us reduce our hotel expense by at least $400,000 annually.

How are we doing it? We've revamped our business travel program, so that our travel department manages travel purchasing and reimbursement functions and reports directly to the corporate controller. In this way, we get the entire picture. Most companies' travel departments only book reservations. Since we also handle the reimbursement after associates complete their travel, our travel department knows what's actually being spent and can closely monitor all expenditures.

MULTIPLICATION AT ITS BEST

In March of 1992, Equifax spearheaded a cost-reduction effort that included centralizing the travel purchasing function. We hired a travel manager and contracted with only one travel agency, instead of several, which helped build the company's buying power. That made it easier to negotiate hotel, airline and car rental prices. We also planned to centralize and standardize the accounting and expense reporting.

Now that we're working exclusively with one travel agency, 18 people, including me, work on-site in Equifax's business travel department. Eight people are Equifax associates, and the other 10 are contractors who work for our travel agency. Eight travel agents book reservations with one ticket processor. The agents and the ticket processor report to an on-site branch manager from the travel agency, who in turn reports to Equifax's director of travel. Having everyone on-site makes following up on exceptions to any of our policies much easier.

We've set up the company's quality control system so that, for example, when airfares drop after an associate has already made his reservations, we can alert that associate up to the date of his departure. If the reduced fare is substantially lower, the associate's director telephones the traveler and encourages him to accept the lowest-fare flight.

The travel department calls an average of two associates per day -- and usually the associates are very receptive to accepting a lower fare once they realize how much money the company is saving. If, however, an associate refuses to accept a lower fare, his manager is notified in a monthly management report.

Thanks to the contracts we've negotiated with various airline carriers, Equifax's air expense will decrease by $1.2 million annually. (And we're in the process of negotiating more contracts to reduce the expense even further.) For instance, recently we saved an Equifax associate four hours in travel time by convincing her to fly on an airline other than the one she typically uses to accumulate frequent-flier miles. This discount fare saved the company $500 on one ticket! Multiply that by a number of travelers and the savings is dramatic. So our system lets us be proactive rather than reactive.

HAPPY TRAVELERS

Equifax has been implementing new policies not just on airfare, but on lodging, car rental, meals, credit cards, cash advances and receipts to reduce travel costs. Last year, we spent nearly $30 million on travel, making it one of the company's highest discretionary expenses. And each year our corporate controller is encouraged to add 10 percent to the previous year's overall number for travel expenses to determine the new year's corporate travel budget and to allow for increases in travel costs. Here are some ways we control that mushrooming expense.

Previously, many Equifax associates flew first-class. Now they're required to fly economy coach-class and to accept the lowest fare. However, they still keep their frequent-flier miles, because we think of this as a travel perk and believe it ultimately will improve our cost control. Why? First, we'll have a happier traveler calling on our customers, which will positively affect our sales. Second, a content associate is more inclined to abide by our policies.

As for spouses who accompany Equifax associates on business trips, we pay for those whose attendance serves a useful business purpose. For example, often customers have business events and include their spouses, so naturally we want our associates to be able to have their spouses there, too. We just ask that an associate get prior approval. Then, for reimbursement, the associate must document the prior approval and business purpose of the spouse's attendance and attach that to his expense report. One caution here: If President Clinton's tax plan passes, it will make the spouse expense a nondeductible expense beginning in 1994.

In the past, associates put airline tickets on their own charge cards; now airfare is billed directly to the corporate charge account. This way, we can track airline tickets for usage and verify that information against expense reports. Plus, the company now takes advantage of increased cash float.

Associates also book hotel reservations through the travel department because, as with airlines, Equifax negotiates discounted rates with preferred hotels. When lodging in these hotels is unavailable, we stress that associates should use their good judgment in selecting a moderately priced hotel.

As for ground transportation, an associate may rent a car when sensible and less expensive alternatives aren't readily available or when he'll be driving more than 40 miles a day. A traveler and his manager may also decide that a car is necessary for other reasons, such as carrying heavy equipment or if the associate is taking a customer to lunch. This decision is left to the discretion of the traveler and the manager.

Associates pay for the car rental at the time of the rental. However, for Equifax to reimburse those costs, the person must have made the reservations with our contracted vendors through the company's travel department. The costs of insurance, traffic violations and a rental car telephone aren't reimbursable.

We do, however, reimburse the cost of meals that are directly related to or associated with business activities. Although we don't cap the dollar amounts associates can spend for meals, they must be on an actual-cost basis and, again, we ask our associates to use good judgment. What isn't reimbursable under the meals category? Breakfast and dinner for out-of-town, one-day trips and meal expenses incurred during local travel. And despite President Clinton's tax proposal to lower corporate deductibility in this area from 80 percent to 50 percent, that won't impact our reimbursement policies here.

For the convenience of our frequent travelers, we've implemented a corporate credit card program. Only associates who travel extensively are eligible for the program, and they're issued a corporate credit card from Equifax's own credit union. We ask associates to use the credit card for business expenses -- and business expenses only -- whenever possible.

The travel department then monitors these charges. Associates receive reimbursement after they turn in their expense reports; then they in turn can pay their credit card bills. We also monitor the timeliness of associates' bill payment.

If an associate has a corporate credit card, we don't reimburse any personal credit card fees or issue travel advances. On the other hand, we do reimburse the cost of one annual membership for a personal credit card for any associate who doesn't qualify for the corporate credit card program and who must use a personal card for such business expenses as lodging, car rental and other incidentals. For repayment in this case, we require original documentation of the billing for annual fees.

We also make temporary cash advances available to associates when travel expenses will cause them financial hardship. We've developed and will distribute a special cash-advance request form and ask associates to estimate on it the costs of hotel, food and so forth. The advance shouldn't exceed the total of these estimated expenses. When we receive approval from the individual's manager, we issue and then monitor the advance. Ultimately, the associate clears the advance when he submits a travel expense report within 10 working days after the trip is complete.

Finally, associates must make all hotel, air and car reservations through Equifax's travel department to receive reimbursement. And we require receipts for all costs over $15.

TELL IT LIKE IT IS

In the future, Equifax plans to redevelop its expense reimbursement function. The company is now looking at an accounts payable system designed specifically for a travel and entertainment reimbursement program that interfaces with its airline reservations system. Each night, purchases made through the agency will be downloaded into the accounts payable system, giving us immediate, up-to-date information.

This system also will reconcile travel advances and airfare purchases against expense reports. It will produce more detailed, travel-related reports than we can get through Equifax's current automated accounts payable system.

Once the new travel program is complete, we'll also be able to process our subsidiaries' expense reports. The system will enable Equifax's other companies, including its Canadian operation, to enter into the same terminal system that the parent company uses.

Like many companies today, Equifax continues to research possible cost-saving techniques. We're currently investigating teleconferencing to see if we can justify the expense of setting up such a system -- and to determine if there really are any advantages.

Thus far, we've communicated all of these travel guidelines and changes to associates by distributing the company's "Travel & Entertainment Policies & Procedures" manual. We're also considering sending out "tips for the trip" via the company's internal newsletter and hope to begin publishing these in the first quarter of next year.

My own "tip" for any company considering a travel-policy revamp like ours is this: Associates don't like to be told to do something if they don't understand why it has to be done and how each rule fits into the big picture. Keeping your travelers well-informed, while you still provide excellent customer service, encourages them to happily abide by your travel policies and helps you meet your cost-containment goals. That's really what it's all about, isn't it?

Shirley Sexton is director of Equifax Travel Services at Equifax Inc. in Atlanta.