Cohesive Policy and Structure for Corporate Travel and Travel Expense
With many of the most valuable employees traveling, including senior management and salespeople, having an effective corporate travel policy is critical to managing expenses, and enhancing the experience and effectiveness of key personnel. By including negotiated discounts and leveraging a company’s purchasing power, effective policies can reduce costs, make the travel booking processes more efficient, streamline the reimbursement processes, and help the company avoid fraud or misuse.
Often the people responsible for the upfront part of the travel process and those overseeing the compliance reviews and booking of travel expenses after the travel has taken place, have little interaction with, or knowledge of, each other’s areas of responsibility or challenges. Making travel arrangements and processing expense reports includes two key parts of the same end-to-end process. This structure is best designed when there is involvement, participation, and knowledge at all levels and across the range of roles for employees responsible for each detailed procedural step of the process on behalf of the company and individual travelers.
iPollingTM Results Review
Peeriosity’s iPollingTM capability was recently used by a Director of Global Finance Shared Services at one of our member companies, who was interested in finding out what companies have a combined travel arrangements and expense reimbursement policy in place and, if so, if the Corporate Travel function (travel arrangements, travel vendor management) and the Travel Expense function (processing and auditing of expense reports) are under the same organizational management.
The first question asked whether or not there was one combined policy for both the upfront Travel process and the after-travel process for expense reimbursement. Interestingly, 81% of member companies indicate that there was one combined policy, with the balance of 19% indicating there were separate policies for each.
When it comes to the organizational alignment of these two functions, only 28% indicated that both areas reported to the same management, ranging from Finance, HR, or another functional area. For 72% of member companies, the processes report to different managers, with 58% indicating the reporting is to different managers in different functions. Here are the details:
Here are some comments from responding companies, including their response to the first poll question regarding policy structure:
- One combined policy. Travel Arrangements is owned by Supply Management and Expense Reporting is through Finance.
- One combined policy. Our Travel Management group is under our Purchasing organization while our Expense group is under Finance.
- One combined policy. Travel booking is owned by Global Procurement. Expense is owned by Control (Shared Services).
- One combined policy. Although Travel reports to HR, it is part of Global Shared Services.
- One combined policy. Travel has recently transitioned from HR to Procurement and Expense Reporting is in Shared Services.
- One combined policy. Travel Arrangements reports to Procurement; Travel Expense reports to Finance.
- One combined policy. The Travel group roles up under Indirect Procurement, while the Expense Reimbursement group roles up under AP.
- Separate policies for each. Travel Arrangement policy is owned by Supply Chain. Travel Expense policy owned by Finance Payroll.
- Separate policies for each. The Travel Arrangements are fully automated by a third party and only the Expense function processing reports into Finance.
- Separate policies for each. Our Travel team reports up through our Global Security SVP.
While having one combined policy for end-to-end travel is a significant step to achieving higher levels of efficiency and effectiveness, unless all of the related processes and individual work procedures are closely coordinated and designed with end-to-end in mind, it’s unlikely that the design will be fully optimized or possible negative impacts on travelers will be fully appreciated and eliminated, where possible. While not a practical solution for everyone, having the full end-to-end process closely aligned under common management provides the best environment for superior performance.
Does your company have a combined policy related to travel arrangements and the expense reporting process? What is the reporting structure for employees or contractors who work in the various areas within the end-to-end travel process?
Who are your peers and how are you collaborating with them?
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