Traveling for work has become more and more necessary and normal, with many small, medium, and large-sized businesses dedicating large parts of their financial plans to maintaining travel spending, and tracking down all of their corporate travel expenses. To achieve this, many businesses and travel finance advisors have begun using business travel analytics as a way to see where exactly the money is being spent, and whether that money can be more efficiently used to optimize profits for the company and income for workers. With such importance on tracking corporate travel expenses, what are the business travel analytics that businesses should be paying attention to?
Where to Track Spending in Business Travel Expenses
Travel & Expense (T&E) is often a company’s second-largest discretionary expense. T&E is a large part of the corporate travel expense budget, and tracking down all of the analytics that are part of traveling and business trips can be difficult. These are the most important ones, but individual companies will find their unique situations may differ.
T&E Fraud and Misuse
Though it is certainly an expense businesses would like to minimize, fraud and misuse are an integral part of travel expense tracking for corporations and businesses. Fraud and misuse analytics often come up as single-time or repeated spending at inappropriate venues or retailers, such as spas, liquor stores, and clothing boutiques, among others. Business Travel plans typically only cover spending directly related to the costs of business, so these types of claims should be routed to personal expenses instead.
Opportunities for Credit Recovery
A very important travel analytic for businesses, credit recovery opportunities enable the business to make back some of the expenses spent on the trip. A business can typically find these by comparing credits that weren’t reported on an expense report but were reported in corresponding debit reports. Furthermore, detecting duplicate credit submissions (which can happen often from vendor disorganization) can ensure the business doesn’t overpay for services that are already covered by a travel plan, or recoup losses from business errors.
Out-of-pocket Spending Policies
Oftentimes, travel plans will give allowances for incidental spending on food, drink, and transportation that may not be planned for in the preliminary travel plan. In some cases, however, these expenses are not covered by the travel plan, and have to be paid out of pocket from the corporate budget, something that can certainly eat into annual travel expense tracking for the business. Travel plans from travel management companies will typically give an outline of what is considered part of their travel policy and can help employees ensure they do not accidentally incur excess or out-of-pocket spending from the corporation.
Anti-Bribery or Corruption Risks
Depending on who or where the business and transactions involve, bribery and corruption can sometimes be an analytic factor to prepare for. With more and more finances being handled online, preparing a travel plan without proper policies or protections can lead to fraudulent charges, corruption of business accounts, or errant fees like consulting and facilitation fees that can disrupt finance analysis. Corporations should ensure that they account for corruption risks in any transaction, and include it in their tracking list of travel expense analytics.
Gathering Data for Business Travel Analysis
Travel for business involves many moving parts, which entails a complex expense tracking system. While travel management companies and plan providers will certainly aid a business’ financial team, there are some analytics that will always be valuable to a business:
Summary of Monthly Spending
A monthly spending summary will provide the corporation with all travel expenses made for the month. Use this metric to track how spending fluctuates month-to-month, or between seasons. This is also useful for determining a Return On Investment, to ensure that the travel plan is meeting the business’ needs.
Summary of Department Spending
This summary displays the spending on travel expenses from department to department, tracking which areas of the business are using travel plans the most. This can aid in determining which departments need higher budgets or save the business money, and find potential break points in financial losses.
Top Employee Spending
Employee Spending lists which employees generate monthly travel expenses for the business, and track how much those expenses are. This analysis helps determine whether those expenses are within reason for travel.
Budget vs. Actuals
This metric establishes the patterns between a predetermined travel budget and the actual spending on travel expenses. In addition to the Department and Monthly spending summaries, this can be used to track the efficacy of the corporation’s travel plan.
Booking, Cancellations, & Reschedules
This metric is an itemized list of hotel and transportation bookings, canceled or missed connections, and reschedules that may have taken place. Excess expenses can come in the form of cancellation fees, convenience charges, and rescheduling fees, which can easily add up.
Time Taken for Booking
The overall time spent booking per month can plainly display how much time is saved when booking travel plans and helps to track the efficiency of a travel plan or policy. The more efficient a travel plan, the less time and money is wasted on non-productive work.
It’s a well-known fact that booking flights, lodging, and hotels sooner results in discounts or lower prices. Tracking how far in advance the business makes travel plans can help determine if all deals and discounts are being taken advantage of, and tracks potential ways to save on travel expenses through early booking.
Travel Company Usage
Travel Company Usage summarizes which airlines or rental companies are being used and to which degree, which can aid in vendor negotiations or corporate mileage points from frequent flying. This metric can also be used to track if employees are using airlines and companies within travel policy regulations, lessening errant travel expenses for the business.
Tracking Expenses is Imperative to Business Travel
Traveling for work and business will only become more important to the marketplace in the years to come. Ensuring that companies are armed with the best travel policies and efficient travel management plans will help all businesses to profit as the world becomes more connected.