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Travel & Expense

The Power of Observation: A Quick Fix When Company Travel Policy Not Followed by Travelers

on December 12, 2013

The author of the Paymnts.com article “The New Best Practices for Corporate Travel Spend” raises a great issue – company travel policy is not always followed by travelers.  In our experience automatically monitoring and analyzing travel and expense transactions for multiple companies, we see an average of 5-10% of travel expense transactions that are non-compliant with company policy.   Further, among our customers less than 5% of travelers account for over 50% of the out-of-compliance behavior across all organizations.  Another best practice for corporate travel programs is to employ a system to automatically monitor and analyze travel and expense transactions.

It is important for companies to inspect what they expect.  Business travelers, just like all other people behave differently when they know they are being observed.  Our customers leverage T&E monitoring and analysis to identify the travelers most frequently out-of-compliance so they can be trained and counseled.  Our customers identify the policies most likely to be violated so they can determine whether further communications and training is necessary to maintain compliance, or if the policy needs to be changed to reflect the realities of business travel.

Monitoring and analysis also helps companies understand traveler behaviors with greater context than merely merchant category codes, merchants and amounts.  Best practice today involves understanding what was purchased, how it was classified on the expense report, whether the amount was in line with expectations based on the activities of all other travelers, and if it was suspicious in any other way (day of the week, time of the day, country of purchase, etc.).

Monitoring and analysis is something that can be done cost effectively and usually pays for a year of monitoring after just two months through the reduction in non-compliant behavior.