The Chief Financial Officer (CFO) of the typical organization is now tasked with more than ever before, often asked to be the “savior” of enterprises that struggle to maintain a clear picture into total cash and corporate finances. CPO Rising is pleased to present a series that highlights the “CFO’s view” of various functions and categories within the contemporary enterprise. Today’s article highlights the CFO’s growing involvement in the management of business travel and related expenses (also known as “travel and expense management”).
Industry estimates peg the travel and expense spend category as encompassing anywhere between 12% and 15% of the average enterprise’s overall budget, forcing those executives tasked with managing business travel to not only consistently account for this growing area of spend, but also enhance their overall programs.
The current scope of travel and expense management, however, doesn’t just revolve around the notion of growth…it centers itself around the concept of evolution, and that evolution’s impact from a greater financial perspective. The modern business traveler is privy to a variety of new and alternative travel options, all of which can often fall outside of the typical travel / expense management program. It is now a core issue for both procurement and finance to improve existing compliance and spend management capabilities to effectively capture all types of travel spend. In fact, the CFO’s contemporary view of travel and expense falls under two main aspects:
- The CFO’s main role in managing business travel is to ensure that all related spending is captured for forecasting and corporate planning / budgeting. Like many other corporate spend categories, business travel has certainly evolved in scope, size, and breadth. New apps and platforms allow business travelers to book trips, lodging, and transportation via alternative means, which can be a compliance and cost nightmare for the modern enterprise. Collaboration with procurement is often a necessity here, as all business travel options (both traditional and new) must be logged, identified, and linked to travel-booking systems or greater analytical systems. The intelligence gleaned from these efforts will paint a much more vivid picture of the true financial ramifications of business travel.
- A secondary, yet still critical, role of finance in managing the travel / expense category is to help develop, educate, and enforce business travel compliance policies…from a financial perspective. Some organizations have a clear system for developing and enforcing corporate travel policies. However, even those that do not must involve the CFO and finance team for one significant reason: non-compliance isn’t just a travel issue, it’s an enterprise issue. Booking outside of preferred agreements has dire financial ramifications, especially in larger organizations that can’t react in real-time. The CFO must utilize its leadership and influence to not only assist in the development of business travel policies, but also in the realms of education and enforcement as a representative of the greater enterprise.