An employee has received approval to attend an important conference — her first trip on the company’s dime. “Just email me the flight details, and I’ll pay for it with a company credit card,” her supervisor says. Knowing the travel budget is tight, the employee submits the lowest fare. But her supervisor ultimately books a slightly more expensive ticket after identifying a better flight that avoids a long layover on an airline that offers the company a volume discount.

Allowing employees a measure of choice in travel and entertainment (T&E) decisions is important for morale, and looking for the cheapest choice doesn’t always add up to cost-effective expense management. A good automated expense policy can help balance individual needs and a company’s overall interests, combining spending guidelines with software tools to create an efficient way to approve and reimburse business-related expenses.

For employees, these systems supply a range of pre-approved options, encouraging greater independence with T&E decisions. Employees can see clearly what’s expected, which improves morale, mitigates risks, and encourages the right kinds of behaviors. From a company perspective, automated travel expense management software can make it easier to take advantage of preferred customer accounts and volume discounts. When travel managers have better access to information, they can negotiate more favorable travel arrangements, streamline spending parameters, and identify opportunities for preferred vendor relationships.

Employee choice and company interest aren’t necessarily at odds. Making that case requires clear, consistent communication, and an automated expense policy is an ideal way to establish and refine this communication over time.

As the following examples show, the cheapest options often aren’t the best value when it comes to T&E expenses.

  1. The cheapest choice results in inefficient use of employee time. If the cheapest flight results in long layovers or more time away from the office, it’s probably not cost-effective.
  2. The cheapest choice doesn’t support company-wide savings. One hotel might be slightly less expensive upfront, but the best deal might be one with a negotiated price that offers the business a lower company-wide rate.
  3. The cheapest choice sends the wrong message to clients, customers or partners. Taking a valued business associate to an inferior restaurant might save a few dollars, but it’s a poor choice if it risks undermining a lucrative relationship.
  4. The cheapest choice sends the wrong message to employees. When an employee is representing your company on the road, don’t dampen their enthusiasm and confidence by making them feel they’re being treated poorly.
  5. The cheapest choice’s inferior quality makes an item more expensive in the long term. If your company provides laptops and mobile devices to employees, cheap tools aren’t a bargain if they quickly break or become obsolete. The same goes for company-branded travel luggage or clothing.

Do some of these scenarios sound familiar? We’d love to hear how your company handles these situations in the comments section below!

Comments

Comments are moderated so they may not appear immediately on the site.

Subscribe

Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care. Sally Abella, Director of Corporate Travel Harman International
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic. Ben Zastrow Zelle
Top 5 Benefits of a Travel and Expense System

Top 5 Benefits of a Travel and Expense System

Free Webinar