When your employees travel for business or entertain clients, are you getting the best prices for flights and rental cars, hotels and entertainment? It can be hard to say. After all, if you can’t see at a glance what your company spends on travel and entertainment (T&E) and drill down to important data, how do you really know? But if you use expense management software with end-to-end automation, your company will be in a much better position to negotiate volume discounts with vendors.
Before we talk about how having one helps manage spending more effectively, what is an automated expense policy? Well, it starts by taking your company’s existing expense policy and integrating those rules within expense management software, like Chrome River Expense. The software then tracks every step of expense management, from authorizing and processing to reimbursing employees. The online expense reporting system is tailored to your organization’s culture and objectives and mimics your manual approval process.
This end-to-end system gives you the tools to manage spending more effectively and identify opportunities for preferred vendor relationships.With access to detailed T&E data — for example, how much you spent at a competitor’s hotels last month — your company can negotiate more cost-effective travel arrangements. An automated expense management system can help you see where you’re spending money and then optimize those expense categories.
And discounts on T&E add up quickly. For the average business, travel, entertainment and employee reimbursable expenses represent 8 to 12 percent of its annual budget, according to research by The Aberdeen Group. That’s second only to employee compensation as a controllable cost. What’s more, the very definition of employee reimbursable expenses is expanding to include such costs as court fees, membership payments, home office expenses and mobile payments. It’s more important than ever to have detailed data on these expense categories.
Volume discounts are just one of the financial benefits of automated expense management. There’s also savings through improving efficiency. Organizations that manually process expense accounts pay an average of $21.41 per report, according to a 2012 report by PayStream Advisors, and companies using “some automation” pay an average of $15.06. But a fully automated system can reduce that cost to $8.50 per report.
No two organizations are exactly alike; your company has its own unique needs and preferences when it comes to travel services and vendors. An automated expense policy matches your company’s culture requirements and unlocks unique chances for you to save on T&E expenses and negotiate volume discounts with your preferred vendors.
How does your company track spending on travel and entertainment? What do you think are the keys to successfully negotiating volume discounts?
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- What Should Companies Look For in an Expense Management System?
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Wow! This Chrome River is great. Word has spread [in our firm] and people that were not invited to be in the pilot group rollout have asked to be included!