You can’t manage what you can’t measure. Having access to reliable data is essential for controlling business travel, yet many CFOs do not pay the same amount of attention to this aspect of their business as other core areas of operation. This is a mistake.
Travel and Expense (T&E) budgets represent the second largest controllable cost for most organizations, typically coming in behind only payroll and rent. The benefits of analyzing travel data to identify gaps in efficiency are many. Travel data analysis can offer CFOs insights into company-wide travel spend and an accurate interpretation of this data can help control traveler’s choices and increase compliance. Yet research released by the GBTA Foundation – the education and research arm of the Global Business Travel Association – found that despite the demonstrated value of travel data, CFOs continue to struggle with deciphering travel data.
Why is travel data difficult to manage? It comes down to several root causes:
A deluge of information from multiple sources presents challenges when managing, compiling and analyzing travel data. Often, to get a true picture of travel spend, many businesses use several stand-alone applications and review multiple reports. According to Sabre Airline Solutions, travel managers often spend an average of 40 hours per month reconciling travel expenses and payment data. Not only does jockeying between programs cost time, but you must question the reliability and accuracy of data when it is not stored in one place.
A study by Global Product Marketing and Solutions Group, reports that 82% of travel managers “strongly” or “somewhat” agree that they have to manage multiple data sources to answer questions from management about travel spending, and three-quarters (73%) say they have challenges reconciling differences in reports due to data formatting. In addition, (64%) do not trust that they have all the data they need, and nearly as many (58%) feel they spend too much time reconciling and cleaning what they do have to overcome inaccuracies. Only 37% of travel managers believe their data is completely accurate and 44% would like it to be more timely. Two-thirds (64%) do not trust that they have complete data to calculate the total cost of a trip.
What can you do to ensure better data integrity? A good T&E solution will collect and aggregate travel data seamlessly, freeing up valuable time so that CFOs can make sense of every expense that comes through the business. According to Nick Vournakis, Senior Vice President of Global Product Marketing and Solutions Group, CWT, “Data is of the utmost importance for travel managers as they rely on that information to drive supplier negotiations. Without an accurate picture of their overall spend its difficult to prove the benefit that strategic deals can offer to both suppliers and corporations, so it is extremely important for travel managers to work closely with their industry partners to improve and consolidate their data.”
Many companies have easy access to high-level information, such as total amount spent on air travel or hotels. But for CFOs to get to the information that matters, such as how much is spent on tickets and hotel rooms by department, as well as any ancillary travel-related costs (such as airline and hotel meals, baggage, drinks, movies, and Internet access), a more sophisticated solution is required.
A good reporting system will provide superior visibility into T&E analytics so that you can scrutinize and manage costs. With the flexibility to view data in multiple ways (such as by department, employee, geography, time period, customer, and more), CFOs will be able to locate and correct problem areas. For example, not only will you be able to see how much was spent on shared economy in a particular city, but you will also be able to see how much was spent on meeting rooms overseas. Having access to comprehensive data, gives CFOs the ability to identify travel trends in order to regulate usage and modify traveler behavior to improve compliance.
Reputable travel management reporting tools, such as Concur Travel & Expense and iBank allow travel managers to view, print and share reports of travel purchases to CFOs. These reports provide both details and summaries on air, hotel, car, and TMC transactions.
Recent survey findings from Certify show that expense management is still a highly manual process for more than 50% of companies. When employees do not file timely reports, lose or forget travel receipts, the finance department wastes valuable time reconciling reports. In addition to lost time and money, it also puts CFOs in a difficult position to perform their jobs and make decisions without complete information.
Automated reconciliation of booked travel with expense data greatly reduces the reconciliation process timeline, provides quicker payments to preferred suppliers for additional savings, reduces the risk of mistakes and makes it easy to spot those travelers who do not comply with corporate travel policy. Travel management programs with integrated reconciliation and reporting tools can help CFOs proactively address and react to non-compliant charges or overspending. In addition, the use of an export feature takes data directly from the reconciliation tool and imports it into offline accounting systems.
Reconciliation is further simplified with the use of virtual credit cards. When a virtual credit card is used to make reservations, both the payment and reconciliation processes are tied to a specific transaction. Virtual cards allow for travel managers to customize data fields, which provides the ability to track and reconcile travel information in any way the finance team requires.
Accurate data is essential to good management. This is especially true when it comes to managing business travel. When travel data is centrally located and can be viewed through customized fields, getting answers to simple questions, such as “how much was spent for meals?” or “which department overspent on client entertainment this quarter?” or “were items charged on a particular credit card in violation of corporate travel policy?” is as simple as running a report.
With better-quality travel data, comes increased accessibility to information, improved compliance, and valuable insights that will not only benefit your travel program but also strengthen the company and positively impact your bottom line.