Organisations spend a disproportionate amount of time managing employees' travel expenditure. Travellers, personal assistants, administrators, finance teams and approvers are all involved. It’s time consuming, inefficient and downright frustrating.
Why do we wait until the money is spent before we decide whether the expense is warranted or in line with the organisation’s policy and procedures? What if organisations introduced a process whereby travellers had to plan a trip and submit a budget for approval before any monies were spent.
Why not ask travellers to think about what they intend to spend and then ask their supervisor to review their proposal before the first dollar is spent. If these are legitimate questions for your organisation, then perhaps it’s time for some new ideas. What if you asked employees to create a travel budget for their business trips.
This approach significantly changes the game and here’s why.
For starters, it encourages the traveller to think about the trip, prompting them to make conscious decisions on how much they will spend. And not just the airfares, it’s accommodation, food & beverages, conference fees, transfers to and from the airport etc. Therefore, the $600 Melbourne to Sydney return airfare, quickly starts to add up to $1,600 plus. This is a much larger number, which prompts travellers (and their supervisors) to start thinking about how they can economise or whether they need to go in the first place.
Now before you jump up and down about the additional work this will create, think about it from a practical perspective. About 75% of your employees travel less than three times a year. Most of these trips are for short conferences, training or internal meetings to capital or regional centres within the country they live. It’s not difficult for people to work out what they should spend in these circumstances, and even easier for a manager to review and approve the trip if it’s justified.
It’s pretty simple.
This methodology applies across multiple facets within the travel ecosystem, including sustainability, risk, compliance and corporate governance.
Now let’s look at how most organisations are managing their travel. Most rely on a verbal (or perhaps email) exchange on whether the trip should take place; rarely will there be a budget agreed upon, and if it is, it will be entered into a finance system the traveller doesn’t have access to. In this scenario, there’s little or no thought process on sustainability, risk, compliance or corporate governance.
Next, the traveller books, paying little or no attention to the cost as there are no guidelines to go by other than a loose policy around best fare of the day. They then go on the trip, submitting numerous expenses on their return. The expenses are sent to their supervisor, who automatically approves them without a second thought.
In this model, there are no controls in place to accurately record how the trip was approved. Importantly, there is also no visibility on how actual expenditure tracked against the budget - if there was one agreed to in the first place. This scenario makes it extremely difficult to control costs. It also makes it difficult to question whether a traveller has gone overboard on their corporate card shouting a round of drinks on the last night of a conference. In these cases, setting expectations would have made it clear on what’s right or wrong.
Controls and transparency have been front and centre in the development of Nutrip. We have been socialising our ideas with our customers and we believe the platform’s ability to link the budget to expenses as they happen is an extremely effective way to track and reduce expenditure.
The core of our thinking is to set expectations and provide travellers with the tools needed to deliver on them. We also understand that all trips will never be the same and it’s too difficult for organisations to create policies that will cover each and every possibility.
We believe it shouldn’t be too much of an inconvenience for travellers to plan ahead and explain to budget holders their intentions and how much a trip will cost. Yes, there will be exceptions, however, human behaviour and the sense of responsibility, will in most cases, prevail. Ultimately this will lead to increased transparency, accountability and greater flexibility, which will deliver better travel outcomes for individuals and the organisation.