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Invisible Travel Spend: What is it and how you can Combat it

What is invisible travel spend?

Invisible spend is defined as any travel expenditures that take place outside of an approved channel and thus, do not appear in official reports provided by a travel management company (TMC). Invisible spend leads to an inaccurate picture of overall business travel volume.

What are the negative implications of invisible spend?

Invisible spend can affect many parts of a business’ operations including:

Compliance

Bookings made outside of official channels can undermine your company’s travel policy and lead to compliance issues. When employees see a colleague stray from the policy, they think it’s okay to do so themselves. If not addressed, this can quickly become a significant, company-wide issue.

Negotiations

Securing the best possible rates with airlines, hotels and rental car companies is one of the best ways to save money when it comes to your corporate travel program. When negotiating with suppliers, not having an accurate understanding of all travel volume can have a negative effect on rates and discounts.

Spend control

When booking outside of official channels, employees may or may not comply with your travel policy guidelines when it comes to spend. Additionally, when an employee doesn’t book with one of your preferred vendors, they aren’t getting the discounted rate that your company has negotiated.

Reporting

Having an incomplete picture of total business travel spend can lead to issues when it comes to budgeting and forecasting.

Safety

Aside from the financial implications it can have, invisible spend can also pose a threat to employee safety. Without insight into traveler’s itineraries, it can be difficult to track their whereabouts and almost impossible to fulfill your duty of care responsibility.

How can invisible spend be reduced?

The best way to reduce invisible spend is to identify it and address it quickly. Review expense reports frequently to look for areas of noncompliance. Work with your travel management company to figure out why employees are booking outside of policy. Are they under the impression that they can get a better deal on their own? Has your travel policy been communicated in a way that makes it seem more complicated than it is? Whatever the issue may be, one of the best ways to address it is to make sure your travel policy is straight forward and presented to employees clearly and often. Stressing the importance of compliance at every level can effectively reduce invisible spend and improve your company’s bottom line.

Is invisible spend a problem within your company? Contact the experts at Professional Travel and we’ll work with you to regain control of employee travel spend.

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