Study Eyes Expense Tactics

Global management consulting firm Accenture and American Express on Jan. 26 released a white paper detailing travel expense management strategies during an economic downturn, highlighting creative ways in which companies have improved data analysis and employee accountability and focused on long-term expense management planning.

While some companies instinctively might consider cutting back on investment in expense management strategies as part of an across-the-board expense reduction during difficult economic times, that can be a foolhardy strategy, said Wendy Prewitt, vice president of global business development for the global client group at American Express.

"Even in this economic environment, expense management should be looked at as an investment," she said. "There will always be a need to interact face to face. It varies, but companies with leading practices can spend about 10 percent less on their T&E expenses than those who don't."

What's more, control of expenses can be improved with little or no investment in some areas, according to the report, proven by the many companies that have made sure employees are aware of and are following travel policies, for example.

Improving awareness centers around better communication and education to employees, and even minor steps can produce results. A global technology company, for example, reported T&E policy compliance increased when it merely shortened the distance of the policy page from the company home page from seven clicks to two. The paper recommends requiring a formal acknowledgment by employees—a signed statement, for instance—of the policy.

Companies also are stepping up enforcement of policies, according to the report. One even has gone as far as making it known to employees that expense submission rates will be tracked as one of their performance metrics.

"They're really focusing on employee accountability," Prewitt said. "I wouldn't say it's standard, but it's one of those creative things that has come out of this environment."

Developing data analysis can require a bit more investment—particularly if a company is still employing non-automated methods of expense reporting—but also is key to monitoring and controlling spending. Businesses that outperform their competitors, in fact, are five times more likely to use strategic analytics than low-performing businesses, according to Accenture.

Though the report found most companies have good access to data, fewer companies are combining data feeds from corporate, meeting and procurement cards, travel management companies and enterprise resource planning tools. Best practice dictates that those sources be consolidated.

"People now need to look at multiple points of data to manage their policies," Prewitt said. "If someone has booked a car and it shows up on the travel agency report, if there was upselling at the counter you can't tell someone was out of a policy until you aggregate the data."

The report said that when companies are forced to concentrate more on controlling T&E expenses, they emerge performing even better when the economy turns around.