THERE’S A SMARTER WAY TO HIT THE ROAD
TO BETTER UNDERSTAND AND MANAGE THEIR TRAVEL SPEND, MANY COMPANIES NEED TO DITCH SOME FALSE ASSUMPTIONS AND ANTIQUATED EXPENSE SYSTEMS.
TRACKING TRAVEL EXPENSES has never been a more taxing task. Today’s businesspeople tend to book the different elements of their trip through several channels – including traditional travel agents, websites and directly with airlines or hotels. Once on the road, they are also likely to make use of multiple payment methods.
If you work for a large company, there is a good chance a corporate travel agency and a sophisticated expense-management solution help keep tabs on your complex travel payments. It’s also likely that a clear travel policy, one with processes in place to enforce it, helps keep your employer’s costs under control.
Employees working for Australia’s small and medium-sized businesses (SMBs) are not always so lucky. For a start, a recent study by travel and entertainment expense management specialist Concur found that only 42 per cent of Australian SMBs used a corporate travel agency. One of the reasons was that SMBs feared a travel professional would drive up costs, rather than help manage them.
Phil Hoffmann, managing director of Hoffmann Travel, says there is also a perception that cheaper fares can always be found online. “So instead of using an agent, they have a highly paid PA spend hours booking hotels and looking for airfare deals,” he says. “I’ve even seen CEOs trying to figure out the best ways to use frequent flyer points, instead of running the company.
“It’s a false economy, because a travel agent will take five minutes, find a better solution and ensure you’re not stung by hidden costs. They will also offer back-up, which is why we have seen businesses swing back to agents after disruptions such as the volcanic ash cloud in Europe. The growing awareness of an employer’s duty of care to their corporate travellers is another factor.”
Encouragingly, Concur’s study reported that a majority of SMBs claimed to have guidelines for staff travel. However, Michael Eberhard, Concur’s Asia-Pacific general manager, says this often means only that staff know they can’t fly first class. “Only a relatively small proportion of SMBs have a true travel policy, so their ability to enforce or drive behaviour is pretty limited,” he says.
Eschewing corporate travel agents and smart travel policies may well hurt a company’s bottom line, but one finding in the study suggests the real pain is being felt by business travellers themselves: 55 per cent of SMBs admitted that their staff still used manual processes to report expenses.
That means corporate travellers are told to gather hard copies of receipts for all transactions, half of which will be unreadable by the time they are stapled to an expense form and sent up the line.
It’s an inefficient and errorprone procedure compared to automated solutions that bring together travellers’ costs, eliminate the need for receipts, speed up the approval process and ensure compliance.
So why are a majority of SMBs still relying on pieces of paper stuffed into envelopes? Eberhard suggests one reason is that they fail to automate processes that in the past were comfortably managed by individual staff. “Instead, they employ more people to fix problems that only exist because they are still using a manual process.”
At the same time, there is a perception that technology solutions are often complex and that implementing them will be expensive, with IT support and extensive training requirements.
Eberhard claims those days are gone. “We recently introduced a travel and expense-management solution specifically designed for Australian SMBs. It uses cloud computing and a series of wizards that allow customers to configure 90 per cent of components themselves. So SMBs can usually go live in about two and a half weeks and, in general, they are able to pay for the system within six to nine months.”
Concur’s solution aggregates information from all the booking channels business travellers might use and integrates data from personal and corporate credit cards. Once on the road, travellers can use their phones to take photos of each receipt, add the transaction amounts into their mobile device and lodge them. “The manager can log on and see the receipt and approve it, so it’s much faster, there’s more detail and it’s much easier to process in the back office,” Eberhard says. Once the trip is complete, a variety of reports can be automatically generated, helping the company understand and manage its travel spend.
Other solutions in the marketplace will help SMBs create and apply travel policies, as well as understand and monitor travel and entertainment costs. If you are not using one, you are essentially flying blind.