One of the many areas that companies have focused on for cost-cutting initiatives is spend on travel and entertainment (T&E). Manual T&E management is one of the largest drivers of inefficiency as it reduces visibility, accuracy and timeliness of spend information, according to a survey by Paystream Advisors.
Moving away from manual processes and onto an automated spend management system can help not just large firms with complex T&E spend, but also medium and small firms looking to gain greater clarity into where their costs are in terms of corporate travel and entertainment. Such a system can illuminate how effective travel policies are and where they can be enhanced, travel policy enforcement, and ultimately it can reduce time and money spent on travel spending.
The Paystream survey cited T&E expenditure as the second largest cost pool for most organizations—behind salaries and benefits. As such, it is an area where many companies have focused efforts on cost reduction and efficiency gains.
However, only so much can be done without the aid of technology to automate and electronify data gathering and reporting.
Over a third of respondents to the survey said that enforcing corporate travel policies is an ongoing challenge, and 28 percent of respondents cited their lack of visibility into spend as a problem.
The Paystream report noted: “A lack of accurate and timely visibility into travel spending - including information on compliance with corporate travel policies and preferred vendor agreements - prevents organizations from consolidating spend, which in turn reduces their ability to leverage volumes and achieve stronger negotiating positions with suppliers.”
Electronification of spend management and the implementation of a spend management solution can help increase visibility and increase travel policy compliance.
Of course, the cost of buying and maintaining T&E solutions – plus the headache of moving staff to such a system - must be weighed against the potential benefits of such systems. In addition, any such implementation is not simply a matter of plugging in the system and going full steam ahead. It requires detailed analysis of company-wide spend patterns and may require some process re-engineering to get the most benefit – in fact it may be best implemented with a new or updated corporate card program. It also involves a training and adjustment period for affected staff.