How do you measure your Travel and Entertainment Expense behaviors and outcomes? Most leaders are taught to focus on the bottom line, and then cut, cut, cut expenses. I recommend reviewing the leading and lagging controls that are in place to obtain cost reduction.
A leading control will proactively drive proper behavior so that the desired outcome can be measured in the lagging control.
A leading control will be in place BEFORE the spend occurs while the lagging control will be in place AFTER the spend occurs and to monitor compliance.
Let's use two examples of Leading and Lagging controls:
Travel Example:
The Travel management company reports show that Lost Savings are occurring because travelers are not selecting the lowest cost.
Leading control: Does the T&E policy state that travelers must choose the lowest fare?
Leading control: Does the online booking tool provide dynamic messaging to the traveler to choose the lowest fare?
[spend is incurred by traveler]
Lagging control: Does the travel management company report provide the required data so that non-compliance can be followed with a consequence?
Lagging control: Do you have consequences in place for non-compliant traveler behavior?
Meeting Example:
A spend analysis report shows that meeting spend is incurred by numerous ad-hoc planners throughout the organization.
Leading control: Does the meeting policy state that meetings must be sourced and planned using a preferred company or department?
Leading control: Do your preferred hotel chains know to direct all meeting spend through your approved meeting management company or department?
[spend is incurred for the meeting]
Lagging control: Do you obtain regular financial accounting records of all meeting spend incurred throughout your organization so that you can track maverick expenses?
Lagging control: Do you have consequences in place for non-compliant meeting behavior?
Every T&E expense has at least one, if not more, leading and lagging controls. Managing the proactive leading controls and the reactive lagging controls will increase your cost reduction success. Think of it this way: "If we do [behavior], then we should see this [outcome].
I have created leading and lagging controls for all T&E expense categories and have helped my clients reduce their expenses by double digit percentages. If you want assistance, please contact me.
Debi Scholar, GLP, CMM, CMP, CTE, CTT
Thank you for visiting the T&E Plus Blog on expense management, travel management, business meetings, events, incentives, strategic meetings management, entertainment, virtual meetings, tickets, hotels, airlines, ground transportation, T&E policy, plus more...
Debi has the following designations:
· Wharton Aresty Executive Education/National Business Travel Association (NBTA) Global Leadership Professional (GLP)
· Meeting Professionals International Certificate in Meetings Management (CMM)
· Convention Industry Council Certified Meeting Professional (CMP)
· NBTA Corporate Travel Expert (CTE)
· Six Sigma Green Belt
· Chauncey Certified Technical Trainer (CTT)
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