FinanceRegs.com » 3 strategies to curb rising T&E costs

3 strategies to curb rising T&E costs

October 23, 2008 by Carol Katarsky
Posted in: Best practices, Communication, Fraud prevention, Hiring & training staff, In this week's e-newsletter, Internal controls, Latest news & views, T&E

Get ready for even bigger expense report totals next year:

For American companies, the average cost of a domestic business trip is expected to increase 1.2% to $1,002, according to American Express Business Travel Advisory Services. The cost of traveling overseas on business will increase by even more — 3.5%, for a total average cost of $3,452.

You can’t eliminate business travel entirely, but there are ways to lessen the impact of increasing costs on your company’s budgets. Here are three proven tactics:

  1. Plan travel carefully. Not all travel costs are increasing at the same rates. For instance, rates at mid-price and upscale hotels are expected to stay roughly level — possibly even decreasing slightly. Airfares, including all the extra fees, are expected to increase significantly. So switching from a conference across the country to a regional one that employees can drive or take a train to could save loads of money without sacrificing visibility.
  2. Tighten internal policies. If you haven’t already made clear to travelers — and approvers — that certain expenses are frowned on, it’s time to do so. Otherwise, travelers are likely to use the “better to ask forgiveness than permission” theory when they have to make judgment calls about which expenses they can charge. Let’s face it: if Bob’s flight is late and he gets to his hotel room at 9 p.m., he’s ordering room service. And if no one ever told him company policy considers that a “last resort” he’s a lot more likely to get dessert, and maybe a bottle of wine…
  3. Avoid rental cars. Rates themselves are expected to hold steady. But rental agencies are using much tighter rental terms — and threatening extra fees for even small infractions, like just missing the return grace period. Throw in still-high gas prices, and it’s worth encouraging staffers to use rental cars only when absolutely necessary.
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