Firms crack down on ‘wasteful and maverick’ T&E spending - TravelMole


Firms crack down on ‘wasteful and maverick’ T&E spending

Sunday, 07 Apr, 2006 0

Companies are checking employee expenses more thoroughly now than a year ago, according to results of a new poll.

The survey of 840 staff using personal and corporate cards in the US and Europe by American Express found that companies and their employees “are often on opposing teams”.

Head of corporate card UK Paul Abbott said: “Firms around the world have stepped up their vigilance over wasteful and maverick spending, but there is still a tug of war going on with employees who are making buying decisions.

“In response, we’ve seen clients’ significantly expand use of the corporate cards to manage expense and drive compliance.”    

The 2006 Card Check-Up Survey was based on two polls of employees of mid-sized and large businesses – one in the UK, France and Germany and another in the US. The survey targeted employees who charge expenses, such as T&E and office supplies, to personal credit cards or assigned corporate cards.

It found that companies are watching employees’ spending more intently on both sides of the Atlantic. Corporate scrutiny increased by 48% in Europe and 65% in the US, compared with a year ago.

But 73% in Europe said they still believed it was “very” or “fairly” common for employees to spend “more freely” on business expenses, such as travel, telephone, meals, tips, and office supplies when they know their companies are paying for it.

“Companies today are aware they need to add extra muscle to their expense control methods but many firms, large and small, are still missing out on ensuring policy compliance through a corporate card programme, allowing employees to ‘free’ spend,” said Abbott. “Having a dedicated corporate card programme not only works for the company but also for employees, who are often concerned about being out of pocket due to business expenses.’

Other European findings include:

*91% of European respondents aged 24 and under stated that they are particularly troubled by having to pay for business expenses before being reimbursed. This was particularly burdensome in France (90%), followed by Germany (85%) then the UK (78%).

*37% of European individuals with company credit cards are not earning any points, rewards or miles. This was highest in France (51%), followed by Germany (32%) and the UK (29%).

*The survey showed that the UK (38%) and Germany (29%) are united in their primary reason (other than company policy) for using a company card; keeping personal finances separate from work, while the French are influenced by convenience/safety aspects and getting corporate discounts (17%). These top reasons came above helping with expense reports and corporate discounts for purchases.

Meanwhile, a majority of respondents indicated that loyalty rewards programs, such as frequent flyer, customer loyalty, credit card or hotel rewards, significantly influenced their decisions for business-related purchases. 

Almost 60% of those queried in Europe and nearly three-quarters (73%) of all respondents polled from the US said such programs are “very” or “somewhat” influential on their corporate buying decisions.   

“Reward programs have long been a strong influencer for employees and it is great news for firms that reward employees who follow the rules and use their corporate cards appropriately,” said Abbott.

But he added: “More companies today, especially firms that need to reduce costs, are choosing loyalty plans that offer cash rebates at the company level – rather than points to individual employees. The benefits are there to be seen, not just for the bottom-line but for supporting and encouraging employee expense compliance.”

Report by Phil Davies 

 



 

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Phil Davies



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