You selected the “recommended” Travel Management Company (TMC). A junior purchasing clerk handles your corporate credit card programs. Accounting lacks staff so you only audit 10% of your expense reports. You did not negotiate with hotel chains because the TMC guaranteed low rates.
Travel and Expense (T&E) averages 10% of corporate budgets. How closely do corporations monitor the components that factor into T&E spend? CFO’s and Controllers tell you absolutely they monitor those expenses – but a comprehensive report is an all hands on deck, weeklong, fire drill to pull together. Accuracy is questionable at best. Does that sound like monitoring to you?
It was easiest to go with the T&E management software company’s recommendation for a TMC. After all, you supplied extensive data regarding travel patterns, airlines, hotels, etc. so they could make an informed recommendation, correct? No? If they did not have the data, then how could they make an informed recommendation? Suppose data analysis uncovered opportunities with a different TMC having better agreements and more favorable pricing with preferred vendors. Suddenly the path of least resistance (going with the recommendation) is not necessarily the best choice.
A junior purchasing clerk handles all your credit card programs. They never administered a credit card program before they got to your company, but nonetheless you are sure they have everything under control. After all, you have an executive assistant as their backup. You are certain they spoke with suppliers, credit card providers and business travelers to get the most appropriate cards offering the best deals. It does not sound likely but if it makes you feel better keep believing!
10% of the average business budget is spent on T&E. 20% of that falls outside of policy (assuming there is one). 80% of all businesses still rely at least partially on processing expense reports manually. Despite those numbers, 29% of all businesses audit less than 10% of their expense reports. Are you foregoing auditing a high number of expense reports because you think any reduction in fraudulent or duplicate claims will not offset the added cost? That may be the case – but you will never know until you start tracking data.
The biggest organizations can allocate the resources required to hire T&E professionals. Some have entire departments devoted to business travel. For every other organization? It is usually a hodgepodge of fragmented, misaligned responsibilities that fall to the person the company believes “has the time”. When those people exit the company it becomes a mad scramble finding somebody else to fill the role.
Because T&E expertise is so specialized, it is not always easy finding people in the labor market possessing those skills. You found a great executive assistant that covers all other requirements but lacks the depth and breadth of T&E skills required to be the company administrator day one. Do you hire and train them or take a candidate with less of what you really need (lights out executive assistant skills) but possessing more of a T&E background?
There are other options. Because I represent a company that provides other options, I am sure you are not surprised we got to this point. Forget the messenger for a moment and consider the message.
If you could spend X to save 2X or 3X would you do it? There are also intangible benefits. Improved business traveler experiences. No more combing the labor market to find unicorns possessing all the skill sets you really need plus a T&E background. Eliminate training new hires to fill T&E administrator roles.
If your current system works then by all means keep things as they are. However, if poor T&E management disrupts vital components of your business (sales), then it is worth exploring options to fix that. Ironically, you may save money AND improve performance.
Travel and Expense (T&E) averages 10% of corporate budgets. How closely do corporations monitor the components that factor into T&E spend? CFO’s and Controllers tell you absolutely they monitor those expenses – but a comprehensive report is an all hands on deck, weeklong, fire drill to pull together. Accuracy is questionable at best. Does that sound like monitoring to you?
It was easiest to go with the T&E management software company’s recommendation for a TMC. After all, you supplied extensive data regarding travel patterns, airlines, hotels, etc. so they could make an informed recommendation, correct? No? If they did not have the data, then how could they make an informed recommendation? Suppose data analysis uncovered opportunities with a different TMC having better agreements and more favorable pricing with preferred vendors. Suddenly the path of least resistance (going with the recommendation) is not necessarily the best choice.
A junior purchasing clerk handles all your credit card programs. They never administered a credit card program before they got to your company, but nonetheless you are sure they have everything under control. After all, you have an executive assistant as their backup. You are certain they spoke with suppliers, credit card providers and business travelers to get the most appropriate cards offering the best deals. It does not sound likely but if it makes you feel better keep believing!
10% of the average business budget is spent on T&E. 20% of that falls outside of policy (assuming there is one). 80% of all businesses still rely at least partially on processing expense reports manually. Despite those numbers, 29% of all businesses audit less than 10% of their expense reports. Are you foregoing auditing a high number of expense reports because you think any reduction in fraudulent or duplicate claims will not offset the added cost? That may be the case – but you will never know until you start tracking data.
The biggest organizations can allocate the resources required to hire T&E professionals. Some have entire departments devoted to business travel. For every other organization? It is usually a hodgepodge of fragmented, misaligned responsibilities that fall to the person the company believes “has the time”. When those people exit the company it becomes a mad scramble finding somebody else to fill the role.
Because T&E expertise is so specialized, it is not always easy finding people in the labor market possessing those skills. You found a great executive assistant that covers all other requirements but lacks the depth and breadth of T&E skills required to be the company administrator day one. Do you hire and train them or take a candidate with less of what you really need (lights out executive assistant skills) but possessing more of a T&E background?
There are other options. Because I represent a company that provides other options, I am sure you are not surprised we got to this point. Forget the messenger for a moment and consider the message.
If you could spend X to save 2X or 3X would you do it? There are also intangible benefits. Improved business traveler experiences. No more combing the labor market to find unicorns possessing all the skill sets you really need plus a T&E background. Eliminate training new hires to fill T&E administrator roles.
If your current system works then by all means keep things as they are. However, if poor T&E management disrupts vital components of your business (sales), then it is worth exploring options to fix that. Ironically, you may save money AND improve performance.
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