Simple payment management changes, such as introducing the use of virtual payment options, like Central Travel Solution (CTS) or Business Travel Account (BTA) commercial cards, can significantly improve the ROI on travel programs. A TMC with expertise in payment management systems can help your organization build travel policy guidelines to ensure credit card payments are consolidated in order to increase eligibility for various credit card company benefits, rewards and special offers.
Motivation for travelers to book direct with suppliers is on the rise, creating unique challenges for managed travel programs. Travel suppliers, especially hotels, are making a concerted effort to cut out middlemen by re-launching loyalty programs and adding incentives to entice business travelers to book directly with them – thus bypassing corporate travel policy.
With non-compliant bookings, the tangible benefits of corporate travel policies and programs are diminished. When travelers do not use preferred suppliers, or take advantage of negotiated rates and perks by using the company’s approved online booking tool (OBT), the company loses its ability to leverage volume for future negotiations towards discounted rates.
Not only are organizations hamstrung in negotiations, but supplier-direct booking also impacts the ability of travel managers to track down, locate and contact their travelers in the event of an emergency. As a result, travel managers must re-think policies and discover new ways to account for travelers who bypass approved booking methods.
Ancillary fees can have a significant impact on your travel budget. As airlines continue to charge for services that were once provided at no cost, the task of tracking various ancillary fees for air travel becomes a complex challenge for Chief Finance Officers (CFOs).
However, these costs can be controlled when CFOs thoroughly track and assess all data related to ancillary fees previously incurred by your travelers. This information will contribute to a travel policy that makes sense for your business, while providing clear guidelines and flexibility to your travelers.
Travelers often wonder what the exact terms and stipulations are when it comes to "nonrefundable" airline tickets. First, let’s quickly define the word nonrefundable. The Macmillan dictionary states: if the money that you pay for something is nonrefundable, it will not be given back to you, such as a nonrefundable deposit or ticket. In general terms, that definitely rings true for the airline industry. A nonrefundable airline ticket means that if you must cancel or change your flight, you will not get your money back.
So why would travelers opt for nonrefundable tickets? It all comes down to price. Airlines claim that nonrefundable tickets keep the cost of airfare affordable. And they’re right. Flexible fares (also called full coach or 'y' fare tickets) are fares that allow travelers to change their ticket once the booking is made. But with the accommodation, such as modifying flight dates, flexible tickets come at a premium. Flexible fares can cost double, triple and sometimes even quadruple that of a nonrefundable fare.
The Association of Certified Fraud Examiners (ACFE) defines occupational fraud as “the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets.” In ACFE’s 2016 Global Fraud Study, Report to the Nations on Occupational Fraud and Abuse, they estimated that worldwide, organizations lose up to 5 percent or $3.7 trillion of their annual revenue due to occupational fraud.
According to the same report, expense reimbursement fraud ranked as the fifth highest category for corporate occupational fraud (see Figure 8 below). A lack of corporate travel policy can leave the door wide open for dishonest travelers to commit expense reimbursement fraud unless proper controls are put in place.
Travel and expense management (TEM) represents the second largest controllable expense for most mid-market and larger businesses. Given the size of the expense and the consistent desire to control and reduce costs, it’s no surprise that travel management is among the most common services that go out to RFP.
What would it look like if you had better visibility into your corporate travel expenses? What if you had the right technology that integrated booking, authorizations, and payments; and then that technology streamlined your processes? What if your business travelers were happy to follow the corporate travel policy?
For many companies with unmanaged travel programs, that scenario is far from reality. Rather, your organization may experience rogue travelers and multiple inaccurate or incomplete expense reports that require you to piece together the larger financial picture.
Travel is essential to the success of your SME even in today’s hyper-connected workplace. Not all meetings can be managed via video conference or work conducted over email exchanges. Quick growth and globalized expansion are hallmarks of enterprise development and travel is essential to developing and maintaining important relationships, providing customer support and securing new business. Travel can also be one of the most expensive line items in your operating budget.
Striking a balance between a robust corporate travel program and a tightly controlled budget is possible but typically requires the implementation of customizable online corporate booking toolsand the guidance of a professional travel management company (TMC) to help navigate through the complexities of your program. Companies that realize the greatest savings utilize TMCs and typically see a 10-20% cost savings on their entire annual T&E program budget. In addition, these companies witness measurable impacts on program oversight, control, support and overall employee productivity.
If you’re like many organizations with automated expense reporting, you are well aware of the advantages of improved visibility into travel expenses. Automated expense solutions not only provide insight, but also save valuable time for your travelers and finance team. No more keeping up with paper receipts!
Now you may be ready to expand on your existing solution. After all, how do you leverage all that data to move the needle and increase your ROI even more? As you contemplate next steps, take these five symbiotic considerations as starting points.
Businesses are connecting with customers all over the world. Whether you’re a large multi-national corporation, a small government contractor or a small-medium sized enterprise (SME), the success of your business often requires your employees to travel to both stable and unstable regions of the globe.
Managing your corporate travel program – balancing your travel and expense (T&E) budget with travel policy compliance and meeting the needs of your travelers – can be incredibly time-consuming. Adding in the potential uncertainty and responsibilities that come with traveler safety can contribute to an undue amount of stress. In fact, a recent study from BCD Travel states that travel managers rate “traveler safety and security” even more importantly that savings and cost control.
Travel Leadership Blog
Travel and expense management is a key leverage point to enhance productivity & control costs. Join us here as we share best practices, stories, insights and tools to help you manage your travel more effectively.