4 Finance KPIs for Your Corporate Travel Program
Travel is a huge cost for most companies — do you know which financial metrics to track?
Measuring success is the key to determining whether the decisions you’ve made, or money you’ve spent, have been effective. The specific benchmarks of success, however, are not always obvious. When “success” is undefined, business efforts can seem impossible to effectively evaluate.
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Take, for example, corporate travel spending. Return on investment (ROI) is just one key performance indicator (KPI) to track when it comes to an expenditure of this scale. Finance departments must pay attention to much more than just the output of their company’s spending to understand success and improve efficiency.
So how do you know if your business’ travel spending is healthy? Which metrics should you regularly track to understand how your corporate travel program’s finances have improved or worsened? We’re sharing the corporate travel KPIs that your finance team should track in order to optimize travel spend and identify areas for improvement.
Corporate travel finance business goals
To know which finance-related travel program criteria to measure, you first have to know what your business goals are. If you don’t already have some in mind, start with these:
- Control travel spend and save money when possible
- Set accurate travel and expense budgets and track the spend in real time
- Get employees to book travel from a centralized platform and within corporate travel policy guidelines
- Decrease time spent on reporting travel
Now that you’ve established goals, you can use them to create metrics for measuring success.
4 financial KPIs to track for your corporate travel program
If you have the above business goals, then you can measure travel program financial success by tracking:
1. Actual vs. planned travel spend
Making a budget is a good exercise, but it doesn’t give you much control over spending if you can’t see spending in real time. You may budget for a $10,000 month but not know that the company has overspent until weeks after travelers have submitted expense reports and the books have been closed. To actually change behaviors, you need to measure in real time.
Get closer to your planned budget, and accurately forecast future expenses, by gaining visibility into your travel spend. A corporate travel tool (like Lola.com) should allow you to easily track what your travelers are spending in real time.
Rather than booking airfare, hotel, and car rental on different sites, your company’s road warriors can book everything from the same spot. When all traveling employees book their flights, hotels, and rental cars on one platform, your finance team doesn’t have to track down individual expense reports and receipts. They gain real-time financial and accounting visibility into overall company travel spend, which can help them manage and adjust the budget according to actual behavior, not assumptions..
2. Percentage of bookings out of policy
As part of your effort to better manage company travel, you and your colleagues likely established a corporate travel policy in part to help keep travel spending under control. If travelers don’t know about or don’t follow these guidelines, it’s probable that they’re spending more than they are supposed to.
The problem is that out-of-policy bookings, known as booking leakage, don’t typically happen on purpose. They happen because the policy is difficult to understand or because of necessary excess spend, like when flights cost more for a last minute booking.
Lola.com’s automated travel policy guides employees to make bookings within policy. In-policy flights and hotel rooms are highlighted so there’s no question about what is allowed and what isn’t. This tool reduces the occurrence of accidental policy disobedience.
3. Dollar amount saved from negotiated rates
If your company has multiple employees traveling each month, your organization would benefit from negotiated discounts with hotel chains, airlines, and car rental companies. How does that work? When your company gives these vendors a high enough volume of business, they’re able to provide a discount. However, most SMBs are too small to get the kind of travel discounts that Fortune 500 companies benefit from.
Fortunately, some corporate travel and expense management tools, like Lola, tap into industry relationships to give users access to discounted flights, rooms, and car rentals. While your company may not travel enough to be able to negotiate significant deals for its travelers independently, it can access savings of up to 30% by using a corporate travel platform that leverages deep industry partnerships.
4. Time saved on travel expense reports
Expense reports rely on two parties for completion: the traveler and the finance department.
For travelers, creating expense reports requires keeping track of spending, looking for receipts, attaching them to documents, etc. It is a tedious task and can take time away from more important projects on the road and back in the office. For finance teams, delays in receiving expense reports causes delays in the whole system — bookkeeping, reimbursements, expense reconciliation, etc.
Making reporting more efficient makes the finance department more efficient. Integrations with expense management platforms like Expensify help travel management platforms streamline expense reporting for travelers on the go. They can submit reports before they get back to the office, expediting the finance teams’ process.
Measuring success is the key to ensuring that your business is running efficiently. Once you know your business’ travel-related finance goals, you can create and track KPIs to validate success or improve deficiencies.
Lola.com can help your finance department take control of travel spending. The platform passes savings on to you, lets your team make all transportation and accommodation bookings in one place, and automates expense reports through its Expensify integration.