Travel Agencies: 5 Signs Your Current Processes Are Bleeding You Dry (And What To Do About It)
It’s a never-ending game of cat and mouse when it comes to managing a travel agency. You need to grow revenue, make sure sales are coming in to keep the company functioning, and keep up with the day-to-day operations, on top of that, you need to ensure your customers are happy.
In the early days, you might be able to manage it with a small team, but at some point, you realize something has to change, and you need to “grow”.
Fail to grow and innovate, and eventually, your travel business could suffer from consequences —financial or otherwise.
The travel industry is complex and involves multiple processes, systems, and stakeholders, making it difficult to standardize and streamline operations. Thankfully, technology is developing every year, giving businesses like you in the travel industry, the ability to streamline your accounting and financial management processes at a fraction of the cost.
If your mid-back office management has been a constant struggle, check out the five warning signs below to determine if it’s time for you to make a change and reduce the strain your current processes are causing on your team and bottomline.
5 Signs You Need a Travel Agency Accounting Software
- Low Efficiency and Productivity
Many travel agencies have not fully embraced technology and automation, relying on manual processes to manage their operations. This leads to increased time and labor costs, as well as reduced productivity and efficiency.
Far too often, finance departments get pushed to the end of the line when it comes to improvements, which results from slow systems that can barely keep up. As a result, a portion of the business hinders the full potential of the company.
Increased costs are a direct result of inefficient operations in a travel agency. When operations are inefficient, it takes longer to complete tasks, leading to increased labor costs and the need for more staff. This can also result in higher expenses for overtime, benefits, and training. Additionally, the longer it takes to complete a task, the more the cost of operations increases, which affects the agency’s bottomline.
If your outdated paper system is older than you are or you’re still at the mercy of excel sheets, managing invoices, payments, and other transactions will be a painful and time-consuming experience, especially in large volumes. This can result in dissatisfied customers, delayed payments to suppliers, and lower revenue for the agency.
And as the agency grows and the volume of transactions increases, manual processes can become increasingly difficult to manage. This can limit the agency’s ability to scale its operations and achieve its growth goals.
Leveraging an integrated travel agency accounting and financial management software specifically designed for travel agencies can help overcome this issue. These specialized softwares automate manual and redundant processes to heighten efficiency, which results in improved operating margins and helps teams turn their attention to more pressing matters.
- Frequent Incorrect or Delayed Information in Financial Data
Travel agencies often use multiple, disparate systems to manage different aspects of their business, such as customer relationship management (CRM), accounting, and travel management systems. These systems may not be integrated, making it difficult to share data, generate reports, and perform data analysis.
Without real-time financial reporting, agencies may struggle to identify areas of weakness or inefficiency in their operations, leading to missed opportunities for growth and profitability.
If you are frequently making errors in decision-making and financial reporting, it can lead to misleading information being shared with clients and suppliers. This is the last thing you want to happen when trying to come across as professional and trustworthy. If you suffer from this then it’s time to reevaluate your approach.
Specialized travel agency back-office software can help avoid running into this mistake.
Data can be correctly stored and viewed when needed without a hitch. What’s more is that the information can be accessed quickly with complete ease, meaning you don’t have to make assumptions when the time comes for negotiations – everything you need is right there at a moment’s notice!
- Low Customer Satisfaction
When your clients are frequently complaining about billing issues or incorrect invoicing, or if you can’t meet client demand, it’s usually a sign that your current accounting system is not able to handle the complexity of the travel industry.
Keep in mind that this type of scenario leads to competitors coming along and stealing your customer base by offering a better service. It happens all the time, and the likelihood of it happening to you as well is high, especially with the travel industry being so competitive.
And bad news travels fast. In a world where a single incident can give businesses bad publicity, like this viral TikTok slamming Expedia, it’s better to be proactive than put out fires later.
The optimal solution would be to find the root cause of the complaints, and if they’re linked to mid-back office problems, it may be a good time to improve better-controlled billing, workflows, and processes with the help of travel back office software.
Without an integrated billing system, there is a higher risk of errors in invoicing or double billing clients, leading to loss of revenue and damage to the agency’s reputation.
And for companies that are unwilling to adapt, this could lead the business toward a gloomy outcome. At the end of the day, customers want a pleasant experience when trying to book an exciting getaway, and if you’re not meeting their expectations, then there are plenty of other agencies that will jump at the chance to help them.
- Missed Sales Opportunities
You may be thinking, “how can a travel agency back office software possibly help increase sales?”
Well, many of these tools are equipped with financial insights that allow you to identify new opportunities from your existing customers.
A proper system should have the ability to have an extended CRM capability from the existing mid-back office data you are keeping. You can pick up the needs and interests of your customers, where you can add value to the relationship you’ve already built.
And if better post ticketing or after-sales service such as billing, and proper customer follow-ups are not done, or if you don’t know when to “strike”, this will risk missing that business in the future. The ability to have this without any extra effort is important, which only a seamless system can provide.
Do some of your customers take yearly trips? If so, this can be recognized, providing you the chance to reach out to them during the time they usually book to go away. And considering reports have found that increasing customer retention rates by as little as 5% can increase a company’s profits by 25-95%, it’s in your best interest to find ways to improve retention.
The travel industry is constantly changing, with new technologies, trends, and customer demands emerging. Travel agencies need to keep pace with these changes to remain competitive, and this can be challenging without a robust and efficient operations infrastructure.
- Huge Penalties Incurred Due To Human Errors
Unfortunately, all of us are known to make mistakes now and again – it’s part of being human. But when it comes to your operations and processes, back-office errors can land you in big trouble. It can lead to you receiving penalties and fines such as:
- charges due to the inability to meet regulatory requirements
- penalties due to mismanagement of commissions
- penalties in reconciling accounts if disputes are not settled on time
- void charges when travel agents void tickets multiple times
Additionally, when errors occur, it takes time and resources to correct them, which can lead to further inefficiencies and increased costs.
When you have an increased number and frequency of business penalties (Agency Debit Memos), it’s an alarming sign of operational deficiency that you need to resolve as soon as possible.
This was what happened to one of the foremost and earliest travel management companies in the Middle East — when ADMs were happening too frequently and at a rate that could not be monitored, analyzed, and resolved manually. The process of tracking and reconciling payments and deposits made by subagents became more challenging and required a lot of manual work. This means their disparate, non-integrated subsystems were causing delays and incurring higher operational costs.
It doesn’t matter the size of the company, everyone is at threat of human blunders causing businesses to lose money.
Obviously, no company wants this to happen to their hard-earned revenue. That’s where an integrated travel agency accounting and financial management software comes into play. It can reduce the risk of back-office errors, improve operational efficiency, and at the same time, ensure compliance with financial regulations.
Also, when the time comes to submit mandatory finance reports, all your affairs can be checked with a high amount of accuracy, ready for you to send them without fear of complications.
Managing a travel agency is no easy feat. If you want to stay competitive, it’s important to consider the performance of your existing operational workflows and processes. You need to be proactive to avoid problems that might appear if you wait too long to address your challenges.
Investing in technology for your travel agency’s mid-back office processes can greatly improve the efficiency and scalability of your business. In addition to online booking systems, integrated accounting and financial management systems are crucial for maintaining accurate financial records and streamlining financial operations.
As the business grows, technology solutions can help manage the increased workload and ensure seamless operations. It’s also worth noting that these technological advancements are not limited to online sales channels, but also extend to core areas such as accounting and finance management.
TRAACS automates workflows and processes eliminating human errors, unnecessary duplications, and unproductive rework. It provides management with not only the financial tools necessary to reduce overhead and operating costs but also provides the intelligence and insights to maximize revenues.
If you want to learn more about how we can help you achieve your travel agency business goals, click here to request a free demo.