As companies scour the reviving economy for growth opportunities, business travel is increasing. Set against this backdrop CFO’s are again turning their attention to the costs of travel procurement. Knowing that “if you can measure it, you can manage it” C-level executives are again asking the question “ How can we track and better control travel spend? UNIGLOBE experts provide the answers.
“It’s a behemoth of an issue for most CFOs. While many Travel Management Companies (TMCs) put emphasis upon the wide range of travel reports available, our view is a bit different. It really isn’t about how many reports are available – it’s about having the right reports. Believe it or not, CFO’s don’t doesn’t need a huge data dump of big numbers to add to an already massive collection of financial data. Effective monitoring and control of travel spend is really all about knowing which select few reports (and metrics) to track that will eventually produce the greatest, most positive impact on a company’s bottom-line”, explains a UNIGLOBE expert.
It’s a classic “time-is-money” challenge. The reports are intended to help monitor, track and control travel spend but when does the cost of time spent studying all the data exceed the costs saved in doing so?
In this story, UNIGLOBE experts present the inside scoop on how you can achieve your cost containment objectives by tracking as few as three reports:
Airline-wise sales report
What is it? A report that provides a list and consolidated view of all flight bookings made on different domestic and international carriers within a specified time period.
What actionable insights can you draw? Notice the trends. Is there a particular airline that is used often and showing a strong upward trend? If so is there a corporate contract in place? Or, do you appear to be lagging behind in volume on a contracted carrier because some volume is leaking to other non-contracted carriers? Are there “false economies” in play where some carriers are showing low fares but the actual trip cost is higher due to their high ancillary fees (e.g. fees for baggage or seat selection). The key here is to strategize future buying for maximum return in discussion with your TMC consultant Their ‘insider” view of hidden costs can be invaluable for making policy or procurement process adjustments to lower total costs.
Average ticket price (ATP) Report
What is it? A report that shows the average cost that a company has been paying for domestic and international flights within a specified time period.
What actionable insights can you draw? If the trend shows ATP as decreasing, it means your company is purchasing effectively (e.g. purchasing earlier to take advantage of lower advance purchase fares). If the ATP is increasing you can review your purchasing process (e.g. purchase date vs travel date) to see if late purchasing is the culprit. Or perhaps travellers are selecting airlines or fare levels that are not aligned with your corporate travel policy. If the issue is simply “rising airfares” (very common), you can make better cash flow decisions as well as use the average ticket price as a ‘baseline’ to create a travel budget for the next financial year.
Cancellation charges Report
What is it? A report that shows a list and consolidated view of canceled transactions and associated charges in a specified time period. What actionable insights can you draw? Cancellations can be the result of poor planning. Incase your staff books tickets through non-preferred carriers; chances are that those bookings IF cancelled will draw a hefty cancellation charge. Track and check those employees whose travel plans seem to frequently undergo cancellation – especially on non-preferred or non-contracted carriers.
“Businesses are increasingly going places (literally!) to serve existing customers and attract new ones. Top executives like CFOs are constantly juggling the spend requirements for business development with the need to control expenses. Having just the “right data” to assist in the control requirements is the key to saving time and money for all the stakeholders in the travel and travel management arena. Having a TMC keeping an eye on the hyper-competitive travel marketplace and keeping things as simple and effective as possible on the data side is the key to a good travel management system. The right data at the right time will, prevent top executives from getting swept up in a big wave of data . Instead, only the most relevant data is sent their way. “It’s a little adjustment but it makes all the difference” concludes a UNIGLOBE expert.
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