'Auditing travel management companies must start at RFP stage'

Will Green is news editor of Supply Management
26 February 2015

Measuring the success of a travel management company (TMC) must start at the request for proposal (RFP) stage, a conference was told.

Chris Reynolds, director at consultancy 3SIXTY Global, told delegates it was necessary to think about the goals of a travel policy and how TMC audits will be carried out very early on.

Speaking at the Business Travel Show in London yesterday, Reynolds said: “The fundamentals start at the RFP stage, where you should start thinking about what you should be auditing and how you should audit.

“Ultimately, it’s about getting individuals from A to B, but is that at the lowest price or the most comfortable?”

Reynolds said having the right account manager at the TMC was critical and “if they are not performing, get rid of them”.

“You should start out with what you want to achieve from your travel programme and ensure your account managers are aware of it,” he said. “Making sure your account manager is clear about your goals and what you’re trying to achieve is critical.” Reynolds said account managers should not be trying to sell deals where the TMC was getting commission. “They should be working for you, not their paymasters,” he said.

Reynolds said reports were critical to auditing and these must be agreed in the contract negotiation stage. “They will throw them at you because they want your business,” he said.

“Make sure the TMC is aware you will audit,” he said. “It keeps them on their toes. If they think they are not been watched they can become complacent. Make clear if they don’t hit SLAs [service level agreements] there are some repercussions.”

Reynolds said audits should cover areas including fees and charges, lodge card charges, fares, account management, KPIs and SLAs and unused tickets. He said after fuel surcharges, unrefunded tickets were “probably the biggest single profit line” for airlines. “In all tickets there should be an element of refund,” he said.

Reynolds warned audits were time-consuming, giving an example of when he checked 5,000 transactions and found 3,000 contained errors. “It is the reason most TMCs get away with what they do, because we don’t have the time to do that audit,” he said.

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