Travel and Expense Spend and Recessionary times…
Travel and Expense (T&E) spend is usually the first casualty in the battle to control spend in recessionary times. And the reason is not difficult to understand either. T&E is perceived to be relatively easy to control, and a lack of focus on this segment of spend during high growth periods, make it plum pickings for a recession-triggered spend management program. But while it is true that T&E spend is a low hanging fruit, it is also important for companies to understand that T&E spend cannot be brought under control overnight.
Segmentation is one of the key tenets of the Spend management philosophy, and a rigid enterprise-wide T&E spend program implemented as a quick fix during recessionary times is not in line with this tenet. This is especially true in case of companies with large workforces where a knee-jerk, one-size fits all T&E spend management program could actually force an increase in maverick T&E spending, albeit under a different Spend head. As per a recent Aberdeen survey, enforcing policy compliance and visibility into T&E spend data, are the two biggest challenges to managing T&E expenses. Both these challenges are best addressed as a part of a conscious and planned Spend Management effort. Companies with limited visibility into the T&E spend, and lax compliance will find it difficult to immediately start saving on T&E expenses without causing disruptions in business.
So, instead of just being a reaction to recessionary times, T&E spend management should be a planned exercise for a company, with emphasis on visibility and categorization of the T&E Spend. The policies and rules should be set keeping in mind the importance of the spend category to Business functions and compliance should then be enforced around these policies. This way, the next time a recession hits, the company will be able to better manage and prioritize T&E spend.
