By Piers Wilson
Do you know how much your organisation is spending on travel on a monthly, quarterly, half yearly or annual basis?
Recent statistics from the Australian Government indicate that overnight business travel rose by 5% to 14.9 million trips in 2014 (the most recent for which data is available), with nights spent on business travel up 8% to 49.4 million, and total expenditure rising to a whopping $12.3 billion - a 6% increase.
According to Locomote, an average of $5,341 per Australian business traveller was spent in 2015. And yet very often, the answer to the first question would be, "Not exactly ...".
Travel expenses can often be expected to go up or down depending on how the year is panning out for your organisation, and all too often, to blow out - travel trends and policies notwithstanding.
And it's not hard to see why - in a globalised business climate, getting in front of clients regardless of their geography can be pivotal to success. Meanwhile, travel can be one of the most prized perks of the job. A chance to leave the office, get out from behind the screen.
It can also be a major headache. Besides manual data inputting and calculations, there's discrepancies over how much travel is or needs to be done. Very often, predictions of cost are simply made based on extrapolations from last year. Then there's the predictable inefficiencies in terms of how that travel is being sourced.
Getting control of this aspect of expenditure is key to creating efficiences in the business, allowing for strategically significant funds spent on travel to be redeployed to other areas - like a smart investment of a virtual meeting room - and for people to spend more time working and less time travelling.
There is a way to improve the accuracy of this discretionary-based expenditure, which is often entered through the claims system and which can have a significant impact on organisational productivity overall.
PM2Plan, Cornerstone's financial budgeting and forecasting solution powered by IBM Planning Analytics - the next generation of TM1, contains a series of prebuilt modules which each create further accuracy and visibility into key areas and helps you determine the primary drivers of expenditure in your organisation, while holding both your line of business and procurement accountable for travel.
These modules also speed up the collection of data around these key segments in the Opex and P&L statements, allowing for you to enter central assumptions and then see travel costs automatically and efficiently determined within the TM1 system.
A lot less grey
When using PM2Plan, line of business will be required to put forward a travel plan, just as marketing would a marketing plan. Rather than going straight to the P&L and saying, "well we did $10,000 last year, let's just keep $10,000 in our budget", PM2Plan would clean up this grey area, outlining the amount of travel anticipated as well as containing justifications for travel, with this being inputted into the model. Procurement, meanwhile, gets the data they need to add more value in their role.
Your travel consultant or agency can have access to the Travel module and directly update it with the latest information about flights, accommodation costs, and other related expenses, giving you real-time information.
Ready to make your next move a more strategic one? Click here to learn more about how you can use PM2Plan's Travel module to get a grip on your travel costs and add greater accountability and value.