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Travel & Expense

The Theory of Corporate Travel Policy Only Confirmed By Reality of Transactions

on February 25, 2014

As noted by Business Travel News, savings are a top travel management priority in 2014. This is no surprise. Since travel is the second-largest controllable expense in many organizations, it is an area where companies can accomplish more with less and take advantage of technology to gain the most from every dollar. Our customers tell us that data analysis and the changes in traveler behavior that can result from effective analysis are crucial to getting the most out of an organization’s travel budget. Companies that analyze and review 100% of their travel transactions can realize annual corporate travel savings of as much as 5%. These savings result from a reduction in duplicate submissions, wasteful spending, out-of-compliance purchases, and out-of-pocket expenses that should go on corporate travel cards. Programs that monitor and act on out-of-policy activities see large reductions in wasteful spending along with increased compliance with policy that leads to the 5% reduction. This means travel budgets can go farther and savings can often be realized at the end of the year.

Oversight refers to this approach as "inspecting what you are expecting." People behave differently when they know they are being watched. But organizations also gain greater insight into the realities of traveler behaviors that can help determine the effectiveness of policies. There may be some policies that are violated because they no longer make sense. Analyzing expense transactions and identifying trends helps companies identify outmoded policies. As an example, some companies find that travelers who watch in-room movies spend less overall than those who do not. A change in policy may be in order to allow in-room movies. In other cases, tighter policies in purchase card programs or the corporate purchasing process may lead to more transactions in T&E that are meant to circumvent these other policies. It is important to identify those trends and address them with the employees who are trying to circumvent the policies.

The bottom line is that the "theory" represented by corporate travel policy can only be confirmed by the "reality" of corporate travel transactions.