Leadership

Is Your Staff Expensing Too Much?

A new report finds that SMEs spend more than large corporations on business travel and entertaining. Are your employees paying more than they should?

Written by Deborah Aarts

Employees of SMEs have something of a rep for fiscal prudence.

Not so, it appears, when it comes to travel expenses.

Travel and expense software provider Concur has just released its third annual Expense IQ report. Drawing on data from US$50 billion worth of travel and entertainment (T&E) spend incurred by workers around the world, the report highlights some eye-opening truths about the way small-business employees wield their expense accounts.

Globally, SME travelers not only filed 17% more expense transactions while on the road than their corporate counterparts—they also spent more money in every major expense category. SME staff spent 14% more on airfare than big-company employees, 18% more on dining, 21% more on lodging and a whopping 57% more on car rentals.

Read: Insider Tips for Cutting Travel Costs

Why is the bill so much higher for smaller companies? According to the report, “negotiating leverage, driven by scale and sophisticated spend-management strategies, continues to give large-market companies significant advantages in controlling their T&E spend.” Think: giant corporations’ ability to negotiate volume discounts from major hotel chains.

Are Canadians cheaper?

Canadian SMEs aren’t quite so spend-happy, but they are paying more than large-market peers in a few areas. At $138, their average one-night hotel bill is higher than the average ($113). Furthermore, lodging is the single largest area in which Canadian SMEs spend their travel cash, representing 20% of overall T&E spend.

By contrast, Canuck SME travellers pay less for airfare, with an average transaction of $453 (compared to $542 across the entire national sample). Airfare represents nearly 19% of all Canadian SME T&E expenses.

In other areas, Canadian SMEs averaged the following per transaction (national average in parenthesis:

  • Car rental: $199 ($211)
  • Dining: $41 ($42)
  • Entertainment: $118 ($115)
  • Ground transportation: $45 ($32)

While an SMEs location and the nature of its client base can greatly skew the amount it must spend on T&E, it’s important not to let this expense area balloon out of control, according to Robson Grieve, Concur’s executive vice-president of marketing: “Travel and entertainment spend is the second-largest controllable cost for most companies—just behind payroll.”

Related:

Should You Fire Expense-Account Cheats?

The 6 Supplements That Keep You Healthy on the Road

How Jet Lag Affects Business Performance

Are you satisfied with your T&E spend? Do you think it’s possible to spend less and still meet client (and other business) demands? Do you really think $138 is unreasonable for a hotel room? Share your thoughts by commenting below.

Originally appeared on PROFITguide.com