Note: This column is aimed at the ownership of the traditional agency model with employees and independent contractors
As a travel agency owner, you navigate an industry where trust in your employees is paramount. However, balancing trust with periodic audits is essential in steering your business away from potential pitfalls. It’s not about fostering a culture of paranoia; rather, it’s about ensuring the integrity and sustainability of your agency.
Consider this real-life scenario: An agency was hit with a staggering $20,000 debit memo from an international carrier. The cause? A trusted employee had been inaccurately claiming commissions on international flights despite applying only to domestic ones. Unfortunately, the issue came to light only after the carrier audited the Airlines Reporting Corporation (ARC) report—nearly two years later. By then, the employee had left the agency for greener pastures.
This incident underscores a critical lesson for travel agency owners: the need for regular internal audits. A study by the Association of Certified Fraud Examiners found that businesses with proactive detection methods, like internal audits, reported significantly lower fraud losses and quicker detection times compared to those that relied on passive methods like external audits or law enforcement.
Periodic audits serve multiple purposes. First, they act as a deterrent against conscientious fraud. Employees are less likely to attempt fraudulent activities if they know their actions are subject to regular scrutiny. Second, audits help in the early detection of any discrepancies, thereby minimizing potential losses. Third, they reinforce a culture of transparency and accountability within the organization. Lastly, they will offer you a different overview of your agency.
Implementing a regular audit system can be a manageable task. Start with establishing clear policies and communication channels. Make sure your employees understand the rules regarding all policies. Use technology to your advantage; modern software can automate many aspects of auditing, making the process efficient and less intrusive. Know your agreements and look over your ARC reporting. Run a report on your CRM to show commission levels claimed and investigate any that look out of place.
While trust is key to running a successful travel agency, complementing it with periodic audits is equally crucial. After all, as the owner, you shoulder the most risk. It’s about striking the right balance—maintaining a trusting relationship with your employees while protecting your business from avoidable financial setbacks.
