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Travel & Expense Purchase Card

The Oversight Spend Analysis Report 2015 Highlights (Part I)

on December 09, 2015

After many months of hard work, Oversight is proud to announce the release of its second annual Spend Analysis Report, on the state of spending within global travel programs. This years’ report covers many of the same bad behaviors lurking in travel programs that we highlighted last year such as fraud, waste, and misuse. Eager to add something new and exciting this year, the 2015 report includes other points of analysis, such as benchmarking spending data across American cities, and highlights the more specific instances of suspicious out of pocket spend.

We feel this report is a true depiction of the state of spend across Fortune 500 companies with $1 billion in revenue annually with large, active travel programs. For the 2015 edition of the Spend Analysis Report, Oversight analyzed over 16 million purchase card transactions and 32 million expense report transactions by more than 250,000 travelers.  These travelers accrued over $3 billion dollars in spend.

What we found was interesting, to say the least.

We found that certain American cities stand out for certain types of spending, which we analyzed by looking at popular MCC codes in those locations. For example, Oversight found that gifts, cards, novelties, and souvenirs are unusually popular in Cleveland, OH, with a median spend of about $112, around four times typical amounts in other cities! New York is (not surprisingly) the most expensive city for hotel rates. San Francisco is a close second.

Having this level of “insight” into traveler spending and behavior allows travel programs an ability to shape policy in an actionable, effective way. Using the data above, a program manager may decide to raise the threshold for hotel stays in New York City and San Francisco, and scale back in all others, or place an alert on gift shop MCC codes in Cleveland, OH.

For the purposes of the report we also benchmarked spending data in a city we felt was rife with non-compliant transactions against another, quieter town, like Minneapolis. We chose Las Vegas, because what city has more of a reputation for bad behavior? Surprisingly, the data matched up in almost every way, except we found that travelers spend 9x more on drinking in Vegas than in Minneapolis. A discerning travel manager could definitely use this information to their advantage!

We chose to emphasize spending behavior across cities because fraud isn’t much of a widespread issue in the organizations we serve. Out of the 48 million transactions analyzed for this study, just 1.8% of those were flagged as potentially non-compliant transactions. This could be because companies that use an expense audit solution (such as Oversight Insights On Demand™) have seen improvements in compliance reflected in the decrease of out-of-compliance activities by as much as 70%.

But just because fraudulent spending may be low, it doesn’t mean you shouldn’t be looking; it can still cost the company thousands. Duplicate expenses alone from this research totaled over $3 million dollars, and it is easy for a sample audit to miss those areas of cash leakage. And with just 10% of travelers committing nearly all the instances of high-risk spending, it makes sense to leverage automated analysis to hone in on those problem travelers. 

But don’t take our word for it. Read the full report to get an idea of the kinds of transactions companies without an expense audit solution could be missing in their own spending programs.