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Automated Expense Management Resource
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Expert Advice
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| The European Expense Management Study, 2003 | |
If average performing companies successfully adopted best practices [in expense management], they could reduce indirect costs from 5.6% of direct spend to 2.0% of direct spend. The best performing companies apply a comprehensive and integrated approach to travel and expense (T&E) management. They continuously address the totality of their T&E operations rather than making ad-hoc improvements to individual processes. These companies have high levels of automation, they eliminate non-core activities such as pre-trip approval, they have implemented corporate card programmes, they have centralised processing wherever possible, and they actively manage the linkage between the travel policy and processes to drive down both direct spend and indirect processing costs.
| META Group, Harnessing the Power of T&E Outsourcing White Paper, 2002 | |
“Effective travel and expense (T&E) management can be an important initiative to drive costs out of expense report processing and reduce spending through policy/rules enforcement. Companies have reduced process costs, check/bank fees, cash advances (via quicker reimbursement), improved cash flow (through direct and regularly scheduled payments to corporate credit card providers), and focused spending with key suppliers (by employing stricter travel policy enforcement T&E solutions have also become a critical component of the employee relationship management (ERM) suite of solutions. ERM solutions are focused on extending information and processes to the enterprise for both finance and human resources functions.”
| The Aberdeen Group, ‘Beyond Convenience and Safety: Making Visibility Payoff,’ The Category Spend Management Report Series: Travel, 2004 |
The Aberdeen Group recommends that enterprises can leverage the following tactics:
Track all expenditures at the most granular level as possible
The study revealed that most companies rely on a varied assortment of reports to gain information on spending, some even from third-party sources. But companies should take ownership of the details in as real time as possible and inform their supplier of negotiations and policy changes as insights are gained.
Align enabling technologies with strategy to ensure sustained success
The right strategy and behavioural changes will work only if supported by enabling technology. Aberdeen recommends the aggressive use of online booking applications, T&E reimbursement applications, or a combination of the two to sustain near-term savings and achieve additional savings and cost-avoidance moving forward. Each company will need to assess its current technology enablers, but for companies drowning in paper and manual processes, this decision should be easy.
Leverage the corporate intranet
Place as much relevant travel information (e.g. external sources of information, travel tools, and specifics of internal agreements) in the hands of the traveller via the Web. This information enables travellers to take the final step, which is described below.
Empower the traveller to make the right decision on behalf of the company
This tactic not only increases overall adoption but also frees managers from processing approvals prior to a trip and during reimbursement.
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