How can you make 2014 a more cost-efficient, more profitable year for your business? If you’re searching for ideas, read on my friend.
As we head into the New Year, what better time to evaluate 2013 expenses to identify new ways to boot unnecessary costs from the budget? Automated expense tracking provides data that allows you to identify specific cost-reduction opportunities, meaning you can actually turn data into dollars.
Travel and entertainment expenses is the second largest controllable business spend, after payroll, representing a nice opportunity for you to impact the bottom line. So without further ado, let’s dig into last year’s expense tracking data to find some creative ways to save.
Here are three ways to examine your 2013 expense summaries to potentially save a nice chunk of change in 2014. And if you have automated expense tracking, collecting this data will be a snap.
Find patterns in your general expense data to increase revenue
This could be anything. For example, do you have certain types of clients that cost more to onboard or work with? Identifying the similarities among high-expense clients can help you plan for added costs in your initial proposals. At the very least, it will lead to more accurate budgeting for specific types of clients.
You can also look at patterns in relative spend. Are there scenarios where one employee spends twice as much as another employee on the same trip? Why is this? If they’re a massive revenue driver, you might just look the other way. If not, dig in and start asking questions, such as:
- Are all trips necessary?
- Is there a clear rental car policy employees can easily adhere to?
- Does your travel policy indicate when to rent a car vs. when to take a cab? When travel is only necessary to and from the airport, cabbing it can be much less than renting.
You might also be footing the bill for luxury travel and lodging when it provides no specific advantages. Does it always make sense to spring for business class on a 45-minute flight, or rent a chauffeured town car when you’re not escorting a client anywhere?
Scrutinize travel data to cut costs
How often do cancellation and rebooking fees apply? When do they usually happen and why? Finding common threads to extra charges can help you prevent the events that cause them (i.e. booking too early). This data may also signal that changes to the company’s business travel policy are needed. Can you educate your employees on ancillary fees? For example, if you’re planning to check a bag, book with this airline instead of that one.
Discover your opportunities to negotiate
What are your top three travel destinations? Start here.
Does one airline serve all three destinations? Are your employees selecting different hotels at their discretion?
If so, you can use expense tracking data to negotiate group rates with hotel chains that offer location advantages for your broader team. These things may seem insignificant, but over the course of a year, volume discounts can make a massive difference to the bottom line.
These are just a few ideas to get you started. Once you start digging into your expense tracking data, you’ll surely identify a few opportunities on your own. Happy digging!
The bottom line is that expense reporting affects every part of your business. The sooner you address it, the sooner you can turn data into dollars. Learn why you shouldn’t wait to be asked to fix it.