Companies can reduce annual travel and entertainment (T&E) costs by 7 percent to 15 percent by using a comprehensive expense management software, according to a recent article on the Spend Matters website.
To achieve these significant savings, a business needs to have three key elements working together: a clear and specific expense policy; a company-wide credit card program and modern expense report software that aligns with company policy; and credit cards with preferred vendors and suppliers.
Each element can provide savings on its own and help to detect and prevent fraud and inefficiencies. But implementing all three elements yields the greatest return, according to Spend Matters. The ability to track T&E spending in a highly visible environment provides several opportunities for financial and operational improvements. Here are five examples.
- Uncovering opportunities for strategic sourcing. Companies can realize an opportunity for developing a preferred relationship with one or more key suppliers by evaluating total spend by expense category (for example, hotels and car rentals). Knowing the volume and the ability to commit some of that volume also can drive significant savings, often exceeding 20 percent of the total amount spent.
- Providing insight into accruals. This assists with period-end close, reporting on accruals, and pulling together in-process credit card and out-of-pocket spending that has not yet been exported from the expense management tool to your financial system.
- Supporting compliance by tracking sales expenses. By aggregating all expenses associated with sales and business development activities, companies will better understand the costs of individual sales activities and customer types. With certain types of customers, like health care practitioners, tracking these expenses can be critical in managing compliance with such government and legal requirements as the Sunshine Act.
- Spotting and fixing bottlenecks. Using key performance indicators (KPIs) like Open Approvals Aging can reduce delays and improve processes, including reimbursement cycle times.
- Identifying policy violation risks. Through compliance reporting, companies can spot individuals and groups with higher risk for policy violations and identify policies that require further education and training.
These five benefits are just some of the advantages of a comprehensive travel expense management system. Have any of these tips helped your company save money? Share your comments below!
- Buy, Pay, Expense: Save Time on Amazon Business Expenses with Chrome River and Mastercard
- Bringing in a New Era in Corporate Payments with Emburse Pay
- Gartner and Ardent Partners Advise How to Build a Best-in-class Accounts Payable Operation
- When Cash (Control) is King: Is Your Accounts Payable Strategy Optimized for a COVID-19 World?
- Getting the Most Out of Your Spend Data with Emburse Insight Advisor
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.
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.