Corporate Travel Expense Management
For many organizations, corporate travel and meetings tend to reside in its own functional area and forced to work with other enterprise solutions initiated by other functional areas within the business. Human Resources departments implement automation to ease the hiring, on-boarding, and termination process but they don’t always consider how the new HR solution fits into helping create and delete corporate travel profiles. Finance is responsible for corporate or purchasing cards and expense systems but in many cases is not taking into account the impact their siloed decisions have on corporate travel. KesselRun considers corporate travel as its own unique supply chain, intimately tied into virtually every functional area within an organization. If one link of that chain is broken or not optimized, the ripple effect can cause significant issues around traveler satisfaction, risk management, expense reimbursement, and supplier leverage and negotiations.
How Expense Management Is Handled And Leakage Identified
Across the entire corporate travel supply chain, the biggest single opportunity for organizations tends to be how they handle expense management and which expense management solutions is put in place. The opportunity around capturing the right data as it relates to air, car, hotel, rail, and rideshare is bigger than ever. In the United States alone, corporate travel expenditures top $280 billion with only $90 billion actually under management. In essence, Corporate America is not able to adequately capture and report on the vast majority of its expenditures made on what is typically the 3rd or 4th largest corporate spend category. While all automated expense systems are typically set up to capture the basics – air spend, hotel spend, car spend, et cetera, few are set up to capture key data elements necessary to utilize in meaningful supplier negotiations for company preferred deals and discounts. Generally, when implemented in a vacuum, finance is interested in capturing T&E spend, but usually not so interested in the particulars critical to corporate travel managers.
- Corporate Travel Expenditures
- Under Management
So, while we understand the size of the marketplace and intuitively recognize the opportunity in capturing travel program spend “leakage,” most organizations lack the capability to obtain the data needed. In most cases, communication between corporate travel and Finance could solve this problem. Even so, Finance would have to make many of the reimbursement fields mandatory with many seemingly unnecessary to the untrained user.
Auditing Corporate Travel Programs For Optimization Opportunities
The difficulty aligning corporate travel expense automation between Finance personnel and corporate travel is only exacerbated by the opportunity in doing just that. Corporate travel industry suppliers are more focused on supplier direct bookings than ever. Today, air, car, and hotel suppliers rely heavily on travel management companies (TMC’s) to sell their products through legacy global distribution solutions which is not only an expensive distribution model to the suppliers but is also limiting in terms of the types of amount of services the GDS solutions can provide to travel agents. In addition to distribution fees, suppliers are also faced with other distribution costs associated with selling through travel agencies including back-end overrides and commission payments. Today, suppliers are taking active steps to “dis-intermediate” from these legacy systems by making a portion of their inventory available only through the supplier websites. In support of this strategy, suppliers are creating new financial incentives for companies willing to book direct; however, the company must be able to provide the data required in order to realize these opportunities. So, the corporate customer now finds itself in an interesting position. We know that in most cases, corporate travelers are booking direct 20-50% of the time even in situations where they have access to a travel agency. We also know that in most cases, the company doesn’t have adequate data to audit, benchmark, or provide information to the supplier in a manner to leverage buying power. Airlines need ticket numbers so they can determine key travel habits such as advance purchase, cabin class, city pair information, and more. Corporate expense tools rarely capture this data. Hotels need a complete hotel name, location, and all of the costs associated with the hotel stay. Again, corporate expense tools rarely capture all of this data. As we look across the entire corporate travel supply chain, there are always areas of optimization. KesselRun views a well-managed automated expense system as key to true travel optimization, but very rarely sees expense systems configured in a way to really get the necessary data required to realize cost savings.
KesselRun Helps With Expense Management
KesselRun has positioned its services over our 16-year history as a holistic solution to organizations looking to optimize the entire corporate travel supply chain. When we consider various client engagements, expense implementations really catch our eye and to the extent we can be so bold, demand to be part of the implementation team! The opportunity realized with a well-implemented tool is immense and the opportunity is only increasing as the industry continues to change.
Contact KesselRun To Learn More About Expense Management Solutions And The Auditing Process
KesselRun brings deep experience to every aspect of your corporate travel program. After 20 years in business, we still believe that every consulting engagement is as unique as our client’s business.
20+ Years in Business
Excellent Client References
Our Executive Team has decades of experience across the entire corporate travel supply chain. We come from both Big 5 management consulting firms and from corporate travel supplier and client sides of the business. We provide flexible, thoughtful, and independent solutions. Our goal is always to increase traveler satisfaction while optimizing corporate spend and supplier leverage. Most importantly, we all love what we do.
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