Keeping T&E spend in control without adding complexity is a constant challenge for organizations.
Spend reduction, if not properly managed, can slow down decision making, demotivate employees, and affect your organization's bottom-line.
Here are five easy ways to sustainably reduce T&E spend without adding unnecessary complexity to your processes.
Measure what matters.. everything matters - While typically as well budgeted as rent, payroll, or other deterministic expenditure, T&E spend while well budgeted tends to be amongst the most unpredictable of a company’s variable spends. Furthermore, it is amongst the most poorly tracked and least understood components of an organization’s spends. T&E control has to start with having a system in place to diligently record expenses in full detail so that these can be later analyzed.
Consolidate expenses to better negotiate with vendors - Empowering the employee with a spend budget typically also results in a large number of distributed, small ticket expenses with certain vendors. While spend approvals need not be re-centralized, this in no way stops you from negotiating deals with vendors with whom you see a large number of low-ticket but distributed spending. Uber / Lyft and takeouts where your employees might order from during a late night at the office are good examples to start with.
Simplify your expense policies - More rules don’t make a better expense policy. Having a complex and detailed expense policy can often be a hindrance to spend control as employees inadvertently break the rules. Employees often respond better to a simpler set of rules which are easy to remember and live by.
Sweat the small stuff - The long tail of small expenses can often add up to be a material chunk of your T&E spend. If you’re robust in measuring the long tail of small spends, it pays to analyze the long tail in greater depth as well. Knowing that even the smallest spend is recorded and audited leads employees to adopt a culture of prudence.
Start from the top - At the end of the day, employee spending habits are a matter of culture. If you’d like your employees to be more prudent with their spending, it behooves you to start by having your management set the right example by cutting down on their spending. This continues to be the most overlooked aspect of T&E spend control.
Robana is an automated expense audit solution that helps CEOs & CFOs ensure that their T&E spends are under control. If you’re interested in knowing more about how automated expense audit can help reduce spend you can read about that here.