BBC Pops the Expenses Bubble

Managing employee T&E spend has received a huge amount of coverage across the media since the MPs expenses scandal. On a positive note, the enhanced media buzz around the topic has helped to emphasize how important it is, in times of economic uncertainty, for businesses to ensure they are doing their very best to keep a handle on expenses. In October 2008, the BBC decided to ban champagne from employee expense submissions. An article published in the Guardian this week, highlights how the BBC has made dramatic costs savings since this change in expense policy. According to the article, the BBC drinks bill fell from £107,511 in 2008 to £55,984 in 2009 – close to a 50 percent fall.

The BBC example shows how one simple change can have a significant impact on the overall expense budget of an organization. During the recession we have seen a number of cuts made with fewer business class flights and less expensive restaurant bills, but businesses need to evaluate all areas where cost savings can be made. Enforcing a policy, such as mandatory use of public transport rather than a taxi for journeys fewer than five miles, could mean drastic cost savings for SMEs and large enterprises alike.

Changes to policy can help to make cost savings, but businesses must also educate their employees on the impact their expense claims can have on the organization. If companies are open about expense claims, discuss what is acceptable and what is not and explain the reasons why, their employees are much more likely to make the right ‘moral decision’. Instead of choosing a £50 bottle of wine, they go for £20 option because they understand that times are tight, or that the company is trying to streamline costs to boost salary packages.

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