When it comes to selecting a new travel and expense payments system, oversight is increasingly moving into treasury’s realm — and travel managers are going to find it necessary to learn how to “speak treasury.”
In the age of the interdisciplinary company, that means travel and entertainment executives must learn how treasurers think, and treasurers in turn must understand the various payments solutions available, why they might be attractive from a travel department point of view and why it may be necessary to set aside their own biases toward particular banks. Both departments must be in dialogue, and agreement, about the optimal payments solutions governing travel and entertainment spend.
The key to a successful dialogue is an understanding of the work that treasurers actually perform, a process that embraces vocabulary and background, and delving into the mindset of treasury professionals. Treasury functions are becoming more important to a company’s strategic execution, as treasury monitors are responsible for liquidity, bank relationships and risk control.
Given the multiple functions of a financial reporting system and the multiple functions that treasuries serve, travel managers should be aware that treasury counterparts may not, in fact, have granular knowledge of the travel and entertainment reporting system. This is why education remains key, and it may be up to the travel department to explain just why a simple extension of an existing relationship with a bank may not be ideal. In fact, it could be the case that a given bank’s travel management programs are subpar compared to those that may be offered “outside” the scope of financial relationships that a treasury already maintains. That means it’s going to be up to the travel department to explain the advantages of, and ultimately vouch for, a different provider.
A dialogue between treasury and travel requires that a common language is used. And travel executives should be cognizant of issues that are top of mind for treasury workers. Since they arrive at the treasury function from three backgrounds, ranging from accounting to controller to banking, those experiences are likely to shape a treasurer’s view of travel and entertainment payments. Generally speaking, an executive from an accounting background may be interested in process controls and efficiency — and travel execs can “talk their language” by speaking to, say, how the new travel payments system can connect to the overall ERP design. When approaching a treasury department head with roots in the controller’s office, focus on compliance remains key, and his/her ears may perk up at the mention of benchmarks or efficient tracking of employee spend.
Those treasury professionals who come from a banking mindset may be “hardest” for travel peers to read, and they are the ones least likely to have had significant exposure to travel and entertainment payments systems. Yet, while historically the banking mindset within treasury has been preoccupied with returns on cash, or cash flow management, one dominant issue today remains stopping cash from leaving the business. In that case — with acknowledgement that the treasury tracks thousands of accounts at any moment in time — the travel department must make its case for a supplier relationship based on simplicity and transparency. Those key functions may be enough to overcome a natural inclination to simply expand an existing banking relationship.
In recommending a payments solution to treasury, travel and entertainment professionals should also understand just how a payments solution, once in place, can actually benefit the treasury’s oversight of cash — via improved liquidity — and also point out the inefficiencies, or even “worst case” scenarios, that could stem from choosing the wrong provider.
In reference to positive outcomes, by extending settlement periods, for example, working capital remains optimized through lower implementation costs and then lower transaction costs tied to repeated system use. Day-to-day functions, including invoice reconciliation and data collection, are increasingly simplified, which saves time.
Risk management also becomes a central feature of a treasury department and the payments solution chosen. A successful program will keep employees from inadvertently overspending and can even prevent fraud and theft while enabling continuous monitoring and tracking of budgets.
Ongoing dialogue may also serve to educate the treasury — the department may not realize the wide range of T&E payments solutions that are available in the marketplace and so may not know that the one offered, say by a relationship bank, may not be the best fit — and a lack of dialogue in turn carries its own risks to performance and even security. In this case, it might be wisest (and perhaps safest) to recommend a non-bank provider for payments solutions.
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