In the current economic climate companies are trying to trim costs where ever possible. This may mean reducing headcount, using virtual meetings or limiting participation in conferences or seminars. Many times this means looking at big ticket items as it seems that is the simplest way to make an immediate and meaningful impact, but is it the best? Spending that is done by the employee, generally T&E expenses, comprise one of the largest portions of controllable costs in many companies. Surprisingly most of these same companies exercise little or no control over these expenses. Sometimes there is a no company policy for these expenditures or if there is one adherence is sporadic. Generally, the more manual the process, the less control and oversight is realized. Having a comprehensive picture of what expense are incurred for different projects and activities can also provide vital information on what different business activities really cost and provide the data for determining the more profitable ventures.
T&E expenses can be a large number of transactions of smaller amounts so often these expenses fly under the radar as not have a significant impact. Nothing could be further from the truth. The challenge then is what and where to trim expenses. The old adage of you cannot control what you cannot measure certainly rings true here. The first step is to define a comprehensive process. This should include what expenses can be reimbursed and to what levels, what supporting information is required, the frequency of reporting expenses and how reimbursement occurs among others. The more that the process can be automated the better. There a a delicate balance between the complexity introduced and the degree of conformity. It is better to have everyone supplying the information than having very complex or rigid controls. This is also where automation can help. If the process ensures that all the necessary supporting information is included before it is submitted to a manager for approval the less resistance there will be to using the process. Additionally, time savings will be realized if there are fewer rejected or not approved expenses that are passed between employee and manager.
Once the process is in place you can then Identify the expenses, Manage the expenses and Analyze the expenses. Look for future blogs on each of these topics.
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