How to Save Thousands on Your Expenses Bill

Reporting on and analysing employee expenses can save a company thousands of pounds, but few firms are being proactive in this area.

Livewell Southwest found £19,000 of savings in just by introducing carpools for two community-based teams, instead of having them use their own vehicles. Before analysing these expenses, Livewell Southwest was paying £36,000 a year in travel expenses for the two teams.

But Livewell Southwest is in the minority in analysing its expenses. Financial directors and CFOs regularly report that they and their payroll teams don’t have time to analyse expense reports in more depth. But companies which do implement reporting processes nearly always identify cost savings.

Here’s how to begin to the process of analysing expenses:

1. Have data to report on: It seems obvious, but you won’t be able to analyse expenses unless you’re collecting information on them—how much is spent, where it’s being spent on and what the reasons for the claims are. Make sure you’re splitting expenses into categories: for example, mileage, subsistence, accommodation, entertainment. The more customised those categories are to your business the more useful they’ll be.
2. Identify what you want to find out: Data can yield answers, but you need to solidify the questions you’re asking of it. Which department has the most claims? Which employee is the biggest spender? Where and with which companies are employees paying for services? To get the most out of your reports, you have to ask the right questions.
3. Filter the information: It’s easy to be deluged by data unless it’s filtered to provide only the information you need. You don’t want expense reporting and analysis to generate more work for you and your staff.
4. Don’t punish staff to save money: Improving expense management doesn’t necessarily mean trimming expenses or restricting what staff can claim for. It’s about using information to proactively improve processes, in a way that usually yields savings. For instance, if your employees regularly use a certain hotel, contact the hotel and ask for preferential rates. Have employees use fleet, hire or lease vehicles rather than their own vehicles and submit exact mileage claims rather than estimates.
5. File expenses digitally: Paper expense reports can be misplaced and are difficult to collate and analyse. A cloud-based digital solution makes reporting and analysis of expenses simple.