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For Business, Corporate Travel & Meeting Buyers & Arrangers

Best practice needed for T&E processing

Europe's corporate travel managers could more than halve pre- and post-trip process costs by making better use of automated systems, American Express has revealed.

The company's latest European Expense Management Study calculates that for every €1,000 spent on travel, companies face average additional costs of €46 approving the travel, arranging cash advances, and reimbursing the traveller's expenses.

In extreme cases, says American Express, process costs can amount to as much as €340 for every €1,000 spent.

The study, published in conjunction with management consultancy AT Kearney, examines 66 companies, between them spending in excess of €2.6 billion on travel and expenses (T&E) - €85 million of which goes on the processing of travel and expenses.

American Express splits the T&E management process into five components - travel planning, travel booking, cash advances, central billing, and dealing with expense claims.

For the average trip, the study suggests, managing those components costs an average of €48.31. By adopting "best practice" - predominantly by automating the systems - the cost could be cut to €22.22.

Karen Penney, vice-president of American Express' business solutions group, says: "In the current climate, with financial directors looking for ways to reduce the cost of travel, companies should be placing greater scrutiny on inefficient, fragmented back-office processes."

Facts and figures

The study sample comprised 66 multinational and large national European-based companies, from a range of countries and industry sectors across Europe.

Together these companies annually:

  • Spend over €2,600 million on purchasing T&E
  • Book more than three million trips per year and process more than 3.25 million expense claims per year.

In the course of managing these activities, these companies:

  • Spend nearly €85 million administering their T&E
  • Issue more than 180,000 cash advances per year
  • Hold in excess of 270,000 corporate cards

In tackling T&E management processes:

  • 52% have introduced some form of automation
  • 59% employ a shared service centre model for all or some of their activities
  • 45% have contracted with third party service providers through outsourcing arrangements
  • 23% have 'off-shored' some of their T&E management activities to reduce their indirect costs