Decision making around Travel & Expense (T&E) payments is becoming more complex. The modern expensing process itself is more multi-disciplinary and increasingly digital – that is to say, decentralized.
You’ve likely noticed already: T&E is no longer just a travel manager’s game.
It’s not uncommon now to see the Treasury team at the table alongside other stakeholders when it comes to T&E. But this new dynamic poses challenges to existing workflows and decision making that can ultimately lead to inefficiencies and disagreements.
It doesn’t have to be that way: we’ve listed the top 11 tips for you travel managers to help understand how best to collaborate and develop a mutual understanding when it comes to payments on the road.
Travel and expenses (T&E to us in the industry) are the costs you incur as you travel on business or meet with clients.
The food you buy, the hotel you stay at, the transport you take – essentially anything you spend money on for the purposes of the company would come under the umbrella of T&E. Just make sure it’s covered in your travel policy.
This is all to say that the travel management team are incredibly invested in the topic. They need to know and in some ways influence company policy on T&E in order to implement it in a way that satisfies the need of both the company and the traveler.
However, according to a recent study by Amadeus and Forrester, 70% of respondents involved in T&E management want to improve how teams collaborate when it comes to planning travel. [1]
With T&E making up about 10% of a company’s operational budget on average, [2] the policies surrounding this spending can go on to impact other areas of the business, including:
But one team in particular are finding themselves more involved.
The Treasury department is now increasingly becoming a major stakeholder for T&E, at least at larger corporations. They’re looking to gain a better understanding into T&E payment decisions and the reasoning behind them.
As for travel managers, it’s become more a challenge of understanding the role of treasurers when it comes to T&E, and what they can bring to the discussion.
This lack of understanding is leading to issues that can end up leading to inefficiencies and disagreements as mentioned before. That’s a shame as it’s not too complicated to overcome this.
This is where our top tips come in.
To truly understand the role of treasurers, you need to put yourself in their shoes. That means speaking their language and understanding the vocabulary they use. Let’s not forget that the Treasury already has a lot on their plate – anything from cash management and liquidity planning to management of interest, currency and commodity risks.
Once you understand their perspective, then you can start to understand their language (and how to get on their good side).
Did you know? Treasurers broadly come from three different backgrounds:
This is of course an oversimplification, but these professions all bring something different to the table. Their knowledge and previous working experience will often influence their priorities.
For example, those with an accountancy background will often focus on processes, while controllers will fixate on compliance, best practice implementation and benchmarking. Those coming from banking are looking more at investments and making a return on cash assets.
Knowing this will help you better understand their perspective and the way they approach T&E payments.
There’s a reason why treasury is getting involved with T&E. Here are few possible benefits they stand to gain:
All relevant stakeholders need to be aware of the importance of this decision. You need to make sure to outline what they can expect from an ideal T&E payment solution, why you’re recommending a particular one and, perhaps most importantly, how it will satisfy the needs of the treasury.
If treasurers are new to the discussion, they may be unfamiliar with the T&E landscape and fall into the trap of relying too heavily on core relationship banks.
Take some time to introduce them to the market and emphasize how T&E payment solutions can vary significantly – and how those relationship bank offerings often do not meet the requirements.
Treasurers have a long list of responsibilities, and one of them is managing relationships with banks.
In fact, our research suggests that some larger corporations are dealing with anywhere from two to ten core banking relationships. Add in additional relationships with as many as 90 other banks, and you can start to get the picture.
That means they have a vested interest in the decision for the T&E provider. Keep this in mind when doing your research into potential providers. Non-bank providers are less likely to upsetting existing relationships, making the lives of your Treasury team much easier.
Not everything goes to plan. But planning is important.
The T&E payment provider you choose can have massive implications for your company, for better or for worse. Be sure to explain to your treasury colleagues the potential pitfalls of a solution that doesn’t meet your needs.
Any savings are worth looking into. But, as they say, the bigger, the better.
This is another point where you need to highlight how priorities in T&E differ from what the Treasury are used to. For example, improvements to procurement workflows and other process efficiencies are likely to lead to bigger savings than liquidity gains, at least where T&E payments are concerned.
There are many T&E providers out there. Take some time together to properly look through and assess which ones are a good fit before moving onto the decision-making stage.
It’s easy to be overwhelmed by the many deals available when it comes to T&E – providers know just how fruitful the market is. You may need to remind your friends from the Treasury team that, as with everything, there’s a skill to selecting the right T&E payment provider, and it requires market expertise.
In the end, you all have the same goal: the success of your company. While individual objectives and targets can lead to you occasionally being at odds with one another, it’s important to treat your treasury colleagues as allies rather than an obstacle.
And be sure to use their knowledge and strengths too – they are specialists, after all.
The solution your company uses for T&E can make or break a budget. In the worst-case scenario, you’ll end up spending more money and more time than you need while losing out on visibility.
But, if you’re able to find the right solution, you can get a highly specialized solution that makes your life much easier – and keeps all the other stakeholders happy.
It’s all about cooperation and understanding. Both sides bring something useful to the table and so you’ll ultimately gain an ally who will not only help but enable you to find the best solution for your T&E payments.
Enjoy getting tips to improve your corporate payment solution? Then you'll love the AirPlus Global Newsletter. Sign up for our newsletter today.
Banner photo by Christina @ wocintechchat.com on Unsplash
[1] https://amadeus.com/en/insights/research-report/forrester-2022-new-employee-experience
[2] https://www.concur.com/blog/article/what-does-te-mean