A new survey of 500 senior finance professionals across the UK and US exposes the underlying issues faced by businesses when it comes to calculating the financial return of corporate travel and expense spend. Identified as the biggest variable cost to a company (26.8%), closely followed by people costs such as salaries (25.8%), the research also shows that 60% of companies aren’t able to link their business travel and expense spend to revenue data.
Commercial teams spend the most but ROI not visible
Though variable, uncontrollable costs can hamper business growth, with almost half of respondents revealing that they don’t understand the ROI of business travel and expense spend, therefore declaring it the most unpredictable cost (39%) rather than a positive visible revenue generator.
Furthermore, 70% of organisations lack the insight to forecast travel and expense spend accurately – and nearly half don’t have full visibility of the ROI it brings in. Despite 60% of those surveyed recognising that investment in business travel is essential to business growth. When you consider that commercial teams (sales, marketing and customer success) account for 80% of business travel and expense spend, finance leaders need a way to justify business travel as an enabler for growth.
The paradox of travel bans
The lack of ability to forecast underlines the 48% of respondents who reported that their company had implemented a company-wide travel ban. 73% think that travel bans would be a thing of the past if they could better forecast business travel and expense spend.
“It’s clear that many companies feel they don’t have the necessary handle on travel and expense spend, though this is through no fault of their own. To date, lack of acceptance on the use of siloed systems and processes, using disparate historical data that is unable to provide actionable insights. This is why travel bans are still happening, which in turn, actually restricts business growth by limiting commercial teams’ ability to close business,” said Manoj Ganapathy, Founder & CEO of SalesTrip.
“If organisations were able to better manage, track and forecast spend according to business activity or purpose, business leaders will be able to evidence travel as revenue-generating. In turn not only would travel bans become a thing of the past, but corporate travel would be widely considered as an enabler of business growth rather than a necessary evil,” concluded Ganapathy.
For the majority of organisations, expense tracking is also an admin-intensive process. 70% of finance teams spend more than one day per month, tracking business travel and expenses, and nearly half (43%) spend more than two days per month. Only 13% of mid-market companies (101-5000 employees) say that their finance teams could collate expense spend within 24 hours.
Finance leaders underserved by current technologies
When asked what organisations most wanted from their travel and expense system, survey respondents provided the following wish list: help with annual budgeting, insight into profitability per client, visibility of cost per sale, and calculation of ROI against spend.
The same research shows that 40% of organisations have seen a slowdown in their sales pipeline since Brexit, with a further 32% remaining static. In the run up to a potential Brexit, 62% foresee a need to cut back on company costs such as business travel, making the case for better visibility of spend more important than ever.
Download ‘The financial impact of business travel: revenue driver or drain?’
Originally published on SalesTrip.com