Business travellers, once the envy of office-bound workers everywhere, are dutifully paring down their lifestyle and conforming to increased corporate cost-control directives, a new American Express survey reveals.A new study of more than 500 business travellers in Europe and the U.S. indicates that nearly half face tighter corporate rules governing how to spend their travel and entertainment (T&E) dollars, pounds and euros.Ê Many travellers report being more careful than in the past about following their companies’ travel rules.Ê However, the survey also suggests that padding corporate travel expenses is common.Ê
“Increasingly, corporations are stepping up efforts to track and halt out-of-policy spending and tighten their grip on T&E,” said James Crotty, Senior Vice President, American Express Corporate Services.Ê “Many of our corporate clients are mandating use of the Corporate Card as a way to track travel expenses because companies want a more complete picture of employee spending - enabling them to analyse expense patterns, monitor travel policy compliance and negotiate better rates with suppliers.”
Corporate Cost-Control Intensifies
The 2005 American Express Survey of International Business Traveller Expense Practices found significant evidence that companies are cracking down on T&E spending by tightening policies.Ê In the poll, 45% said that their companies’ policies governing reimbursable business travel expenses have become either “somewhat” or “a lot” tougher over the past two or three years.Ê And many business travellers are taking heed of the new directives.Ê Nearly one-quarter (23%) of all respondents said that, compared to two or three years ago, they were either “somewhat” or “much” more careful in adhering to their firms’ T&E spending rules.Ê
As companies step up their cost-control efforts, many business travellers are noticing a higher level of scrutiny of their expense reports.Ê More than one-third (37%) of respondents said that, compared to two to three years ago, their companies are somewhat or much more careful in reviewing travellers’ expense reports, for example, to check for non-allowable items.Ê
“Today, companies want more visibility into T&E expenditures and practices, and they want more powerful reporting tools to help target out-of-policy purchases,” said Crotty.Ê “American Express can, for example, provide companies with data that showsÊ where their travellers are spending in the hotel sector, and this data can then be cross referencedÊ with a list of preferredÊ hotel suppliers to identify expenditure with non preferred hotels.”
“Furthermore, automated expense reporting tools are useful because they kick out-of-policy entries back to the traveller and help companies raise compliance,” Crotty added.
Business Travellers Believe Expense Abuse Common
Despite tougher travel policies at American and European companies, the survey reveals that many respondents believe falsification of charges submitted for reimbursement on expense reports is common.Ê More than one-third (37%) of respondents felt it was “somewhat” or “quite” common for business travellers to submit an expense report with “one or more completely false or bogus charges.”
While survey respondents believe T&E expense abuse is common, they also say companies should take steps to crack down.Ê Nearly three-quarters (71%) believe that companies should audit all expense reports that business travellers submit - to check for instances of “fraud, out-of-policy expenses and other potential misuse of funds.”Ê
U.S. business travellers are most likely to believe in full auditing of expense reports, as 77% of those polled agreed that all expense vouchers should be checked, followed by 72% of British respondents, 70% of Germans and 64% of French travellers surveyed.Ê
Europeans Feel La Différence
The survey also indicates tougher T&E rules are significantly impacting European business travellers.Ê In a sign that European corporations are quickly adopting the cost-control mentality that has been an accepted practice in the U.S. for years, the majority of business travellers polled from France (56%) and Germany (55%) reported tougher T&E rules - versus much smaller proportions in the U.S. (31%).ÊÊ
French business travellers take the lead in terms of adhering to tighter T&E policies - with 33% reporting that, to varying degrees, they’re more careful than in the past regarding spending.Ê Meanwhile, 26% of those polled in the U.K., 16% of U.S. respondents and 15% of German business travellers indicated that they’re more prudent now.Ê Nearly half (46%) polled in France, a larger proportion than elsewhere, think that their firms now scrutinize expense reports more.
According to the new poll, European business travellers are more likely than their American counterparts to be questioned more frequently on specific expense report items.Ê Compared to two to three years ago, nearly half (48%) of French respondents say their firms are confronting them more on specific charges submitted on expense reports, followed by 15% of British and 12% of German travellers.Ê
In contrast, only 7% of U.S. respondents report more challenges on specific expense items.
Cultural Differences Revealed
It is widely known by business travellers everywhere that mealtime is often the right time to conduct business and close a deal.Ê But whether they’re eating schnitzel in Berlin, snails in Paris or a cheese steak sandwich in Philadelphia, international business travellers agree that this window of opportunity to cement ties with clients is often where the most abuse occurs - embellishing, hiding or falsifying reimbursable expenditures.Ê
The restaurant category was cited as the most-abused T&E expense by 70% of French, 59% of German, 53% of American and 48% of British, respondents.Ê Tips, taxi and telephone costs were also cited as most abused T&E expenses.
“A corporate card provides the most accurate record of restaurant and other T&E charges incurred by travellers,” noted Crotty. “It provides the controls and tools necessary to simplify expense management and drive savings to the bottom-line.”