Forgiveness.
Permission.
Collaboration.

The Evolution of Project Expense Cost Control and True Profitability

Managing spend related to client projects and travel expenses has many moving parts
and controlling costs is key to profitability.

The first line of defense is an expense policy but how and when it’s enforced has a big impact.

Ideally the path to cost management is checks and balances throughout the process at points
where they have the best chance of improving the bottom line. However, many organizations administer policies at a single point in the workflow. This can result in administrative costs and time which negatively affects profitability.

The Forgiveness and Permission approaches to spend control are examples of the
single point enforcement model.

Forgiveness
Surprise, surprise – it’s not always the fault of the employee.

The more manual the process, the more apt you are to be dealing with this type of spending. Spreadsheets of course can be very sophisticated with formulas to control data entry but oftentimes spenders are not fully aware of the policy related to a specific expense type. Fast forward to expense report time and they already spent the cash.

Do you ever reimburse employees who over-spend because they were not aware of a policy?
If you invoice clients for project expenses, you may have to absorb a portion of that meal,
flight, or car rental.

In this approach spenders learn policies as they go and it’s a hard lesson for both the employee and the company. Spreadsheets and the like cannot integrate with other business applications forcing manual processes onto the entire workflow:

• Exceptions become the rule and require an excessive amount of time to process
• Staying current on spend policies is the responsibility of the employee
• Approvals require detailed transaction checking which is prone to error and time consuming

Permission
If a lengthy process in front of the trip sounds familiar, then you are here.

Some companies opt to control expenses as much as possible prior to the spend.  A dedicated group to pre-approve airfare before ticketing or hotels prior to booking?

Do your employees ever complain that they can get better airfare or hotel rates on their own?
Or, that the lengthy approval process means they can’t be as responsive as they’d like to book meetings with clients or prospects? Enforcing compliance in this manner can cause:

• Missed opportunities when employees can’t fully leverage their trip to a specific city
• All spending must be approved including expenses that comply with policy
• Cost to administer outweighs the spending control and savings

Collaboration
Both human and technical.

Collaboration for project expense management goes outside the scope of an isolated task such as the expense reporting process and integrates people and technology for maximum benefits.

This type of collaboration connects processes such as travel planning, expense reporting, and approvals – enforcing spend policies in real time throughout the workflow. And most importantly, automates as many of the processes as possible.

Do you have a combination of disparate processes that represent the larger workflow of project expense management? Some benefits of connecting the workflow:

• ‘In policy’ booking
  Routing out-of-policy airfare quotes for approval in real time prior to ticketing
• Centralize policy updates
  Spending rules are always current and applied at all phases of the workflow
• Eliminate expense entry errors
  Links to company credit cards means transactions are accurate; OCR technology converts paper receipts to data
• Share spend data across applications
  Financial applications, invoicing for project expense billing, and management reporting
  for spend visibility

Policy enforcement can take many shapes and a collaborative and automated  workflow ensures organizations have every opportunity to control costs, stay within budget, and do so with as little administrative overhead as possible.