Business travel accounts for 39p of every pound of employee expenses, according to research from expense management provider GlobalExpense – and if you include accommodation, the second-largest category, the figure rises to 58p.
Business travel accounts for 39p of every pound of employee expenses, according to research from expense management provider GlobalExpense – and if you include accommodation, the second-largest category, the figure rises to 58p. It’s no surprise then that some employers are reining in their travel spend.
For Jeanette Barrowcliffe, finance director at recruitment company Meridian Business Support, what has helped most is outsourcing the company’s expense management. Previously, employees submitted expenses using paper forms with receipts attached, which were then processed internally. Now, expense claims are made online, then processed and paid by an outsourced provider following Meridian’s own policies.
‘There’s been a reduction in admin costs, and we’ve also gained control and visibility,’ says Barrowcliffe. ‘Before we brought them in, once expenses were filed away it was difficult to see who had claimed for what in the past. Now I can get reports on who was paid what on a particular day, or find out what we’re spending on hotels, train fares, or whatever. If we spend the majority of our hotel expenses at one hotel chain, we can go to that chain and ask for a corporate deal.’
However, Barrowcliffe adds that the system on its own will not cover for lax management. ‘It’s down to how you use it,’ she says. ‘If you ignore your own business rules, you won’t get the benefits.’
David Vine, a director at GlobalExpense believes that a failure to enforce expense policies is the main reason some businesses struggle to keep the lid on mounting travel costs.
‘As many as 20 per cent of hotel claims transgress company policy, either because no receipts are submitted, or the costs are over the limit,’ he states. ‘But 99 per cent of these claims are approved. Managers are pretty relaxed about the way they review expenses, whereas in some cases, they should be making a stand.’
One measure that sidesteps the whole expense claim procedure – and hands control to the employer – is to book and pay for travel on the employee’s behalf. Barrowcliffe has found this to be a neat solution.
‘We have a centralised person who books hotels and travel,’ she explains. ‘The lady has an agreement with travel firms and knows how to find the best deals. It also sends a better message to the employee if you can send them a train ticket rather than saying, “We’ve booked the hotel for you but you have to find your own way there.”’
Money isn’t everything
Managing business travel isn’t about finding the cheapest deals. Marilyn Stowe, head of the family law unit at legal firm Grahame Stowe Bateson, stresses there are other considerations.
‘Security is very important,’ says Stowe, who has avoided public transport since she overheard a fellow commuter discussing a case she was working on. ‘On another occasion, one of our accountants was on a plane, and the guy sitting next to him was on his phone. It turned out they were working on the same acquisition, but for different parties.’