Company News » Special feature: Count the cost with travel and expense management systems

After salaries, travel and expenses have typically formed
the second largest outlay for a business. This could be as much to do with the
genuine cost of essential face-to-face meetings with clients away from the
office as it has to do with good old corporate profligacy. Both are under
unprecedented scrutiny now, providing an opportunity for FDs to bring all
relevant expenses under one travel and expenses (T&E) management system and
tease out some savings based on doing smarter supplier deals.

Policy and information are the most important elements of a T&E
programme. Travel policies must be unequivocal, clearly communicated and driven
from the top: without full compliance, any cost savings negotiated with
suppliers on the basis of your economy of scale will be lost.

Group discounts
Before you start, define T&E, then group those costs together ­ fuel,
corporate hospitality and mobile phone bills can be added to the more common
elements of flights, hotels and car rental. The more information you have in one
place, the greater your bargaining power.

Maximising on savings from grouping your costs can be done through various
online travel booking platforms, offering expense management technology to
create an integrated system. Collating T&E in one place allows incisive
analysis and shows up the areas of heaviest travel expenditure ­ information
which can be used to negotiate better deals with suppliers. It also provides a
picture of compliance across the business with the T&E plan and can help
identify fraud. Additionally, it raises visibility of employees while on the
move, helping the FD to fulfil duty of care.

“We have one central card to pay for all flights and then every traveller has
a separate personal corporate card for their own travel expenses,” says Geoff
Allwright, travel and expenses manager for Airbus. “We use AirPlus for both, but
you can [analyse requirements for air spend and individual card spend] for each
and it could come out that one card company is better financially, or for the
terms and conditions, and you could use different cards.”

It may seem insignificant, but it is worth checking which corporate cards are
accepted where before committing. “One of our client’s company cards was only
accepted at the most expensive hotels and restaurants in some parts of the world
they travelled to,” says Ian Flint, managing director at travel consultancy,
Inform Logistics. “We saved them money by choosing cards according to region.”

Viewing phone network usage in the same way as credit card usage adds more
benefits, extending from personal calls made by mobile phone to teleconferencing
and web conferencing. “The cost of the phone, phone calls, texts, email, GPS, 3G
is all part of travel and communication expenses, so why is the telephone bill
not being reconciled in the same way as credit card expenditure?” asks David
Smith, director of sales at expense management system vendor Spendvision. “We
can put that online next to a traveller’s credit or charge card so private and
business calls can be added to card spend.”

Many companies do not have a meetings policy, so information on them and
their costs is badly fragmented. Some meetings bookers are concerned they might
lose their jobs if event information is captured centrally and there are those
who don’t want their spend scrutinised. But bringing them under a T&E
management system can help control cost.

First, you have to define your meeting. “What are meetings?” says Inform
Logistics’s Flint. “HR, sales, a locally booked hotel or a major event? If it is
a major event, who ‘owns’ it? Is it travel or marketing?” This process will
highlight who is booking meetings, allowing better analysis of what is being
spent by whom and for what reason and, as a result, making it easier to find any

Negotiate rates
PricewaterhouseCoopers examined its travel terms and conditions as part of an
overall review. “With improved cancellation terms and additional benefits, such
as discounts on food and drink spend, we saved in the region of £10m, about 25%
[of spend] in the first year,” says head of business services Mark Avery. Once
you have a handle on meetings spend, it can be combined with travel costs to
negotiate better rates.

Another element often not included in an overall view of travel expenses
management is the corporate fleet. Fuel cards from Arval, Provecta and
Leasedrive Velo Group, variously capture information relating to cars and
drivers, covering expenditure on fuel and servicing, mileage driven, as well as
condition of vehicles and validity of licences.

Leasedrive Velo is launching mileage-capture software linked to fuel card
charges, which ‘speaks’ to customers’ payroll and expense management systems.
Provecta’s online mileage capture and fuel management system for fleets complies
with HM Revenue & Customs’ requirements for calculating private and business
mileage, links with your payroll system and can be used as a risk management

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