Why Finance Departments Should Care About Travel
Fewer than 40% of CFOs report being satisfied with how travel expenses are currently managed in their companies.1 Concern about cost has led more companies to shift oversight of employee travel to their finance, procurement, or executive leadership teams.
In an earlier era, travel management responsibilities were typically delegated to human resources on the basis that this department was best positioned to handle policy configuration and employee training. Today, however, the majority of travel managers report to finance or procurement.
A study by Travel Procurement Magazine found that finance, procurement, or executive offices take on direct oversight of travel at 76% of organizations.2
The trend applies to organizations of all different sizes and industries. At companies with relatively small, self-managed travel programs, finance heads might take a hands-on approach, evaluating booking and expense management systems, reviewing employee reimbursement requests, and reporting on annual T&E expenditures.
At larger companies, finance teams are likely to have assistance from procurement departments or dedicated travel management professionals. Even when finance teams are one step removed from day-to-day travel administration, they still have a valuable role to play.
One survey found that twice as many corporate travel buyers believe that a company’s travel management program is most effective when it reports directly to the finance department or CFO rather than to HR, procurement shared services or administrative departments.3 This fits into a larger story that we’ve covered before: from the CFO down, finance teams are being asked to take on expanded strategic planning and oversight responsibilities.
Part of this transformation is due to the fact that finance teams have taken on more forward-looking responsibilities: they design a firm’s capital structure, forecast economic conditions, and allocate resources to optimize growth. But even the backward-looking aspects of the job – controllership and oversight of the financial reporting process – have taken on new dimensions. A CFO is far from being Bean Counter in Chief. It used to be that CFOs were asked what their company’s expenses were, now they’re being asked what their company’s expenses are, and what steps should be taken in response.
Improving the efficiency of travel management processes can yield material savings. T&E is one of the largest expense categories, accounting for 10% or more of the budget at the typical organization.4 Improving the efficiency of travel management processes can yield material savings. And increasingly, it’s finance teams that are leading the charge.
Director Sales & Business Development
Rocketrip | 14 e. 38th St, New York, NY
+1 (407) 532-6945 | mikael@rocketrip.com
