Op-Ed: Speak To Finance The Language Of Data

Travel has seen a steady shift from an HR function to a strategic sourcing, procurement or finance role, which brings new expectations from a reporting standpoint. Travel managers can boost their organizational and brand reputation, particularly with the finance organization, by focusing on complete, meaningful and actionable data.

Chief financial officers are focused on reporting and tracking global expenses for the entire organization. A few key performance indicators for travel and entertainment spending at the global level will win support from finance teams.

Each organization will have different KPIs, but many travel managers have been successful focusing on a few global numbers such as total T&E spend, total transactions and percentage compliance. Tracking percentage of spend on card can lead to significant policy and behavioral changes.

According to the 2009 RPMG Corporate Travel Card Benchmark Survey, the average company in North America puts 75 percent of spending on a card. Best-in-class companies are achieving 93 percent of spend on their cards. For a company with $40 million in T&E spending, that 18-percentage-point difference represents $7.2 million that is not captured on your card. That's a $7.2 million opportunity to improve usability of expense reporting, reduce expense report fraud, and improve vendor negotiations and policy compliance.

One challenge travel managers often face is rolling up data from disparate sources: multiple travel agencies in different regions with additional reports directly from vendors. Using card and expense data for travel management reporting simplifies the challenge of consolidating vendor information. Card data continues to provide detailed transactional information, like routing and hotel folio, which is necessary both for prepopulation of expense systems and to provide meaningful data necessary for undertaking vendor negotiations.

The average Fortune 500 company that relies on card data for vendor negotiations could increase its discounts by about 2.25 percent of total annual spend on airfare, hotels and auto rentals over those who do not use card data, according to the RPMG survey. Discussing your total spend with a particular travel service provider, e.g. Hilton or Avis, can result in real savings to the bottom line—something every CFO can appreciate.

CFOs are looking for data that reflects the overall use of the corporate card, rogue spend and preferred supplier usage that can be used to justify policy changes or mandates. Having complete, consolidated global data facilitates that objective.

Finance organizations are heavily focused on actual spending and rely on the general ledger for budgets, reporting and forecasting. Travel agency data has its value, but relying solely on data from the agency limits effective communication with finance teams. New ancillary air fees, rogue spending booked directly with vendors, meals and parking are captured outside of the travel agency and are areas that many organizations are tracking today. To speak effectively to the CFO, travel managers should use the same data source the finance team uses, otherwise they will be continually defending differences in the numbers and missing an opportunity to expand into new policy and spend management areas.

CFOs recognize the value that complete and meaningful data provide because it's also actionable data. CFOs want analytics that help drive business decisions. Reports that highlight the gap between booked and expensed spending identifies whether travel policies are too loose. Focusing on the savings that can be achieved by policy changes will win points in the finance department. Reporting the percentage of spending on preferred vendors or through preferred channels highlights cost savings as well as the potential for additional savings.

Everyone digests data differently, but most people agree it is easier to understand data that is presented graphically instead of just a bunch of numbers in a mind-numbing, data-intensive spreadsheet. One company drove the value of the 14-day advance purchase home simply by publishing a chart of the cost of tickets in a few simple buckets. Not only did this chart solidify their 14-day advance booking policy, but it helped travelers visualize the impact to the company's profits.

Actionable data drives decisions. Data that is complete and meaningful is data that helps travel managers analyze scenarios that can result in decisions that reduce costs, improve compliance and ease audits.

Travel managers can enhance their value within the company by taking a few steps to align more closely with the finance teams. Consolidate your data from disparate sources or regions for reporting and analysis. Move toward using the same general ledger data used by finance—not only will you be speaking the same language, but you'll find some key compliance data like rogue spend. Translate data into visual, digestible bites.

Focusing on meaningful, complete and actionable data will improve your relationship with the CFO and finance teams.