Industry standards peg the business travel category as encompassing anywhere between 8% and 12% of the average organization’s total budget. While this number can be higher for larger, enterprise-size organizations and a bit lower for those on the small- and mid-sized (SMB) spectrum, the fact remains that business travel (and related expenses) plays a critical role in complex spend management.
For the typical SMB, a robust travel and expense management program may not fit into the strategic purview of the greater organization, and, in fact, most companies in this sector do not often consider it a value-add series of processes. However, with such a large chunk of its corporate budget allocated to business travel, the SMB world should take another look at how they can not only improve processes around the travel and expense category for greater enterprise-wide gains, but also drive value from a category that was once considered a mere “cost of conducting business.”
With this in mind, I’ve developed a four-step “primer” for organizations in the small- and mid-sized vertical to take their business travel and expense management programs to the next level.
- Before all else, understand how business travel effects the entire enterprise. For most SMB enterprises, business travel is spread amongst various internal groups, particularly sales. The first step in improving the program is understanding where travel sits from a spend, supplier and frequency standpoint. Who’s traveling? How often? What do the travel finances look like? The more information gathered up-front, the better off program development will be.
- Address the weakest capabilities now…you’ll see immediate gains. While an “all or nothing” approach may seem like an ideal way of attacking any corporate spend category in terms of process enhancement, this isn’t the case. A proper travel and expense management program has a full “lifecycle” of processes, including travel-booking, expense workflow (creation, submission, approval and validation), reimbursement and back-end analytics. While it behooves any enterprise to automate and enhance the full spectrum of these processes, SMB organizations should address the weakest processes and capabilities first, whether it be gaps in the expense management process or a failure to properly capture booked travel into a system of record. Which leads us to the next point…
- Intelligence is king. “Big Data” isn’t just a fad; it’s a concept that’s here to stay in the business world. Data, reporting, analytics…these are all gateways to true intelligence. In the travel and expense world, intelligence is “king,” that is, any information regarding the frequency of business travel, its purpose or its ROI is critical in understanding the long-term ramifications of business travel and how to improve the processes behind it. Procurement can gain insight into the best suppliers in which to negotiate contracts, while finance can build a long-term forecast of overall financial operations based on current travel data.
- It’s not an overnight process; take the time to build a long-term program. Similar to the second bullet in today’s article, some companies expect an “all or nothing” gain almost immediately. While short-term benefits will be experienced from improving the weakest capabilities, it’s the long-term improvements that really matter. An effective travel and expense management that simplifies travel-booking and ensures a holistic series of expense management processes can drive significant cost reductions over the long haul and ensure that key stakeholders have true intelligence for long-term planning and development.
Technology remains an ideal means to tie this four-step program together under a single, centralized, automated program. There are a variety of solutions that cater to all markets but can be well-scaled for those organizations within the SMB arena. ExpenseWatch is taking an interesting approach to this market by not only offering a robust platform for automating processes related to the expense management function, but presenting more of a “spend management” offering that blends expense management automation with purchasing and invoicing / payables capabilities. ExpenseWatch’s platform is also linked to a mobile application that can help SMB business travelers harness the power of technology while away from the office.
One of the more taxing elements of software utilization in SMB organizations is usability and flexibility. ChromeRiver, a provider of expense reporting, audit and invoicing software, has eliminated much of the frustrating aspects of reporting software to ensure that its platform is very “user-friendly” in terms of reconciling and building expense reports for lodging, airfare, ground transportation, meals, per diems, etc. ChromeRiver’s platform is also extended via a mobile application that allows its users to easily enter expenses, approve them and gain access to specific spend data regarding the travel / expense category.