For most companies, more than 10 percent of their annual budget goes toward T&E expenses, and there is an ever-increasing demand for business travel. Along with that, the costs of travel in general and in particular, corporate travel are rising. It’s only a natural assumption then, that corporate spending is rising.
When it seems like corporate expense reports are spiraling out of control, it can be a huge source of concern for CFOs, so what can they do? There’s a lot of pressure to cut these costs in many companies, and the following are some tips that can be used to bring T&E costs back under control, without affecting employees negatively.
Automate Expense Management
Often, when companies start to feel like they’ve lost a grip of the costs of T&E, it’s because they don’t have the right automated technology solutions in place.
Automated expense management tools don’t just help employees stay organized with their spending and speed-up approvals. They also give finance teams and CFOs the visibility they need to see exactly where spending is going. This, in turn, allows for more strategic changes to be made in policy and practice that can reduce costs through tactics such as renegotiations with travel vendors.
A lot of organizations aren’t necessarily aware of just how much outdated expense report processing methods are costing them. It is estimated to cost around four times more to manually process expense reports as compared to utilizing an automated system. This isn’t even taking into account the cost of human errors, such as accidental submission of duplicate reports.
Define What “Bleisure” Means In Your Organization
Bleisure is one of the biggest trends in corporate travel right now, and it’s something Millennial, and younger employees see as particularly appealing.
Basically, this means the blending of business and leisure during corporate travel. Appealing to younger workers’ desire for bleisure trips is becoming a key part of recruiting and retention strategies.
However, it can create some serious gray areas when it comes to T&E spending. Since it is becoming so much more common for people to blend elements of business and leisure during corporate trips, companies need to keep up with this in terms of how they set their expense policies.
Lack of Oversight For Miscellaneous Expenses
Another big issue that’s more common than companies might think is a lack of oversight when it comes to those purchases and expenses that are marked as miscellaneous. These are items that might be outside of what’s permitted by a corporate travel policy, but since they are categorized as miscellaneous, they go under the radar.
Through the use of both automated technology and more defined expense policies, companies can start to move toward fewer expenses that are categorized as miscellaneous. This can also happen with more oversight and investigation into what exactly these are.
Finally an overall lack of enforcement of travel policies is also a culprit for expenses that spiral out of control. With visibility and oversight, it becomes much more efficient to enforce compliance for policies and cut costs in doing so.