Total Travel and Expense Management is more than just online booking

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TraceyShaw.jpgAll too often a Travel and Expense (T&E) Management programme is considered completed and rolled-out if a company has successfully implemented an on-line booking tool that improves travel policy compliance and reduces overall transactions costs.


Recent research indicates that global best practices for organisations is to embrace a total T&E Management technology solution, of which an on-line booking tool is but one component, Tracey Shaw, TraveluXion’s Head of Sales and Marketing, told SmartProcurement.

 

Once travel has been completed there are many transactions that are required internally within the company to close-off and complete a T&E transaction.


In fact, says Shaw, the travel request portion can often be the easiest transaction in the entire chain of travel procurement as most companies have processes in place for this. Whether paper- or email-based, or an internal application, travel requests will likely follow a pre-determined workflow.


What is often neglected, says Shaw, is the status of an organisation’s travel budget as real-time budget information and analytics are often not available at the time a manager approves a trip cost.


At any given time in a month, a travel budget for a cost centre is in constant flux; a budget holder may have 50 employees that travel on his designated cost centre. How can that budget holder be informed of the actual costs of approved travel, the pending cost of travel, third-party settlements, and the reimbursement claims without having to manually keep a spread sheet on these 50 travellers?


This method would be cumbersome and inefficient and may still lead to some nasty surprises at month-end when all the relevant costs hit the bottom line.


Informed financial decisions are difficult to make without financial data. Therefore, a budget holder wants immediate budget information available at the time of approving any travel costs. Preferably travel budgets should be immediately updated with:
a. Actual spend – approved and released for payment.
b. Committed spend – approved and awaiting third party payment.
c. Awaiting approval – potential spend, but not yet approved or paid.


Within the travel procurement lifecycle, many third party suppliers need to be paid. On any one travel itinerary it is common to have up to five different third-party suppliers: airlines, hotels, car hire, transfer companies and travel management companies.


Furthermore, expenses need to be reimbursed to travellers. Accounts payable must match invoices with approved travel requisitions. Credit card statements must be matched and then reconciled.


An organisation’s Accounts Payable often has the unenviable task of chasing paper, both internally and externally to enable a multitude of third-party payments, says Shaw. “If supporting documents are missing from this process and a payment to a credit card company is delayed the penalties can be significant.”


Another area of concern for many organisations is the necessary manipulation of the travel procurement process to enable the financial data to be entered into an ERP system, explains Shaw.


Companies that have sophisticated and expensive ERP systems have to find a “work-around” for travel, owing to the usual cost variances that occur for this spend item: receive a travel quotation; approve the quotation (without knowing if it is in budget); pay the various suppliers; and then insert the relevant PO number into the ERP. This actually defeats the entire purpose of the ERP system...


So what is total T&E Management? It is far more than just booking transactions and MIS from the travel management company - it is all the components of travel; the ability to manage the spend before it’s incurred; and control and report on all these activities on one independent and auditable application that provides immediate financial analytics for improved management of T&E.

 

For more information contact Tracey.Shaw@traveluxion.co.za

1 Comment

The toughest part of expense management is maintaining the bills, but after we started using Replicon time and expense tracking software, we are doing great that.

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