What Every Travel Director Should Know About Travel and Employee Spend

Many external forces are once again shaking up the travel director’s role at enterprise-sized organizations. The shared economy, supplier direct bookings and increased responsibilities in traveler satisfaction, as well as a heightened understanding of an employer’s duty of care are some examples of the disruptions. At the same time, showing the true expense impact of a travel program is critical to prove the value of efforts back to the business—especially to financial decision makers and department heads.

Yet, as travel directors try to reconcile true travel spend they are finding a real shift: Employees are spending more money across more spend categories, and using more payment methods than ever before—including, credit cards, ghost cards, checks, cash and P-cards. Additionally, all of these payment methods are likely managed by multiple systems that don’t connect or share data across the organization. It’s tough to find a single source of truth.

Travel directors need to ask their teams and other internal stakeholders: “How are we adjusting to this shift?” And, "What’s the cost of doing nothing?"

When spend is happening across multiple systems sitting in silos, analysts are spending hours trying to aggregate it, instead of using their time to help identify trends or help make strategic decisions. Plus, travel directors are often getting information in an untimely manner preventing them from identifying any bad trends or habits until well after the fact. When travel and expense data isn’t integrated or tied together somehow, it’s hard for travel directors to tell “the ROI story” back to management.

A likely first step that many companies are taking to get a better handle on employee initiated spend is to integrate travel and expense data. According to a Global Business Travel Association Foundation report, less than half (47%) of travel managers report their online booking tools and expense tools are integrated.

Other organizations, who are fine with the status quo and fail to adjust, end up being less profitable. Oxford Economics Research surveyed 1,500 financial leaders globally and revealed that most profitable companies are the ones most likely to use analytics, and 82% of companies with profit margin growth above five percent find T&E spending analytics extremely or very useful.

Taking a Proactive Role

So, what should travel directors and others who play a part in the travel ecosystem do to better grasp true spend across their organization? Here are three questions every travel director should ask their teams and other internal stakeholders:

1. Are we using new ways to capture all employee travel bookings outside of our traditional corporate travel process or tool?

Despite strict travel policies and procedures, employees are booking travel outside of company guidelines whether for convenience, cost or business need, and getting reimbursed for it. There is a “leakage” issue that exists in every company. Also, fueling this missing data are travel suppliers putting millions of dollars into clever marketing and loyalty programs encouraging your employees to buy directly from their airline, hotel, taxi service or short-term lodging. There is new technology that can help companies uncover this “leakage” and reconcile it with spend to ensure finance teams are aware. However, according to the GBTA study mentioned above, “…only one in five travel managers (20%) report using technology to capture traveler data booked outside their travel program, despite two in five North American travelers (42%) saying booking directly on a supplier’s website is a preferred channel.”

2. Are we giving the business visibility and controls it needs while giving the traveler freedom and flexibility? 

Automation and policy enforcement are still the main drivers for finance and procurement teams when evaluating travel expense management software, according to a Gartner report. However, Gartner analyst Chris Pang writes that, “This shouldn’t mean the end-user experience should suffer.”

Employees today expect mobile, consumer-like experiences at work and while on the road. If a company is not delivering the tools and functionality they want, and thrusting a frustrating, inefficient process on them, organizations will have trouble capturing accurate travel and spend data. A Forrester research report found that, “Employees are embracing new digital capabilities in their personal lives to make purchases, and they now expect their employers to support those same capabilities as they relate to employee-generated spend.”

A win/win result can be attained by giving travelers flexibility and support to book and travel whenever, wherever, but with prompts and controls that make it easy to stay in policy making the right decisions at the right time. Having travel itinerary, credit card and other sources of data feed into an expense report also helps achieve a win/win result as travelers can be more productive and data can be verified coming from reliable sources.

3. What other areas of the business can benefit by having employee spend data in one place? 

By capturing and aggregating employee spend and travel data in one place, companies can help mitigate enterprise risks such as duty of care, government regulations (FCPA) or tax penalties and occupational fraud. Gaining control and visibility into the finite details of where and how company dollars are being spent can empower companies to take a proactive approach to managing these risks. While all of this spend eventually makes its way into the ledger, the ability to proactively monitor, report and analyze this spend can get lost.

To learn more about how technology can improve productivity and accurate budgeting, visit us online.