The term T&E is bandied about often in business and, as with most business acronyms, people assume that it's automatically understood. In case you have ever wondered what T&E actually stands for, we’ll explain not only what it is, but also why the term is important in the business world, and how paying attention to your T&E spend can save your business time, hassle and money.
The Basics: What Does T&E Mean?
The term “T&E” stands for “travel and expense." These phrases (T&E, travel and expense) are often used when talking about a major operational cost for businesses, which devote, on average, 10% of their budgets to T&E. So, it's a big deal if you're concerned with either cutting costs or making your business processes more efficient.
What Are the Business Implications?
T&E expense management is considered the second-most difficult operating cost to control. It makes sense, when you think about it, because your company's travel and expense budget is one of the key places where you could be looking to reduce costs, but your data is likely stored in various places making it difficult to consolidate and evaluate.
What Does This Mean for You?
If you are involved in reducing company costs – you might be a CFO, financial director or anyone in finance management – then you know that saving money is necessary. But, if saving money on business travel expenses may not seem like much of a priority, consider this:
First, you might not be able to put your finger on how much your business is spending on T&E exactly, at this moment. You wouldn’t be alone. Eighty percent of organizations still rely on manual processes, leaving plenty of opportunity for human error. And, if your system isn’t capturing spending wherever and whenever it happens, you’re not managing all your spending.
Second, you might not think that there are ways to save a lot of money on your expenses bill. Fortunately, this is not the case. Once businesses know their real spend (and a good T&E system will tell them this) they are often surprised by how much they spend with the same supplier, or how many employees might be spending out-of-policy. The former information provides a great leverage point for negotiating lower prices with providers. The latter will ensure you aren’t paying for duplicate invoices or other fraudulent expenses. In fact, almost 20% of T&E expenses fall outside of policy.
The benefits of improving T&E processes are also applicable to business travelers. Your employees might not all travel frequently, but even if they hardly ever travel or submit expenses, the chances are that they will occasionally need to buy things for the company out of their own pocket. And when this happens they will want to know that they will be paid back, and promptly.
A good T&E management system will give you visibility of your spend and enable you to reimburse employees more quickly, while ensuring they are submitting expenses that comply with your company's T&E policy. And if you don't already have one of those, use our tool to build your own expense policy.