Welcome to that most dreaded time of year, budget time. Even though budgets and RFPs may have already been set and sent by now, it’s unlikely for most travel buyers and suppliers that this process will be completed much before the end of January.
Often almost a third of the year can be spent on complex spend evaluations. Going out to tender will be a horribly time-consuming process for organisations, for both buyer and supplier alike. Yet it’s also vitally important, with business travel impacting company growth, productivity and employee wellbeing. And when you consider that it’s one of the largest expenses in the business, with spend equating to around 10% of a company’s annual expenditure – travel and finance leaders need to have some pretty good data at their fingertips to balance costs whilst enabling people to perform their jobs effectively across the following year.
However, finance and travel managers are surprisingly underserved when it comes to having the right information they need in real-time to expedite the painful process. But it needn’t be this way. Here are five things they should have as a minimum, to improve budgeting, as well as to improve business and people performance.
1. A ‘single source of truth’, the holy grail
In today’s environment of actionable data insight, why is it that travel managers are still having to work from multiple sources? Worse still, much travel data isn’t even available to them without a request made to a supplier, making evaluation extremely complex, inaccurate and ineffective. Ask yourself how many sources you are having to tap into when forecasting next year’s budget, and how long it is taking to analyse and report on it. The answer should be one source and minutes, not weeks.
Also, when it comes to RFP season, providing the most accurate and detailed data will enable your suppliers to create the most tailored proposal. The less data you provide, the more inaccurate the responses will be. How can they cut your costs or make efficiencies if you don’t know what you’re travelling employees are spending on, when and with what frequency? Without the full picture, suppliers are less likely to give their best price because they won’t know how profitable your account will be.
2. Your travel strategy should have sales insights
Organisations have travel and expense platforms, and customer relationship management (CRM) systems. What they don’t have is an integrated view of travel spend which includes sales intelligence. Do you know the amount of travel required in order to win a deal? If your pipeline of potential sales deals totals £5 million, you should know exactly how much to spend on travel and expenses. Imagine how easy it would be to budget and forecast if you had the sales pipeline versus average expense ratio at your fingertips.
3. Making your budget count across the entire calendar
With real-time travel data, the issue of travel bans, which not only frustrate your commercial teams but also limit their ability to sell and manage customer success, should be a thing of the past. The only reason these still exist is down to a lack of integration of sales forecast and travel data. Timing of investment throughout the year is intelligence you should have and should be able to accurately plan by, meaning that your budget won’t run out three months short of the planned period.
Do you know at what stage in the sales cycle you will maximise your travel ROI? Or at what stage in the account management process it would be valuable to visit your customers to develop business and reduce churn? These gems will unite your finance and sales teams and optimise business performance and profitability, thanks to the travel manager.
4. Budget per deal, not on past budget
Travel freezes partway through the year, even if the sales team has hit their sales projection, simply don’t make sense. However, if you can dynamically budget by the deal as opposed to a fixed budget based on the previous year’s numbers, they become a thing of the past. Why limit your ability to exceed targets, with an arbitrary number which might not have been set correctly in the first place? Access to actionable data here will enable finance teams to be much more strategic about when and where to invest in travel – and in the meantime, reduce the burden on travel managers’ workloads which can double as a result of a ban.
5. Savvy budgeting means satisfied staff
Company-wide policies, uninformed expense cuts and blanket bans will never have a great impact on the morale of your teams, sales or otherwise. Often, travel and expense management planning and processes just don’t make sense to the wider workforce. If you can see which types of business activities warrant business over economy class, it could completely change your company’s travel policy. Not to mention getting the most both from a business and personal performance point of view. In the age of employee experiences, particularly when it comes to travel, high performing employees will follow where the best opportunities for success and work-life balance exist.
So, if you’re knee-deep in budgeting right now, and you don’t have this information at your fingertips, imagine a world where budgeting is made easy, and cut from months to days. Turn that boring budgeting process into a ‘science of spending’ exercise and you’ll contribute to the business’ bottom line as well as save yourself three months of the year.