No matter how many budgets and spending objectives you set, your company won’t get the biggest bang for its T&E buck unless your employees take ownership over the way they spend. It’s not just about sticking to the guidelines you set, employees also need to be deliberate with their spending to make sure they’re getting the most out of their T&E. According to a 2017 report by The London School of Economics and Political Science, transaction processing costs for T&E expenses can be cut by as much as 50% when these expenses are actively managed and built around a set of best practices.
Here are three simple methods you can use to train your employees on optimizing their T&E spending while staying on budget:
- Return on Investment. Teach them about and emphasize the importance of return on investment (ROI). When employees truly understand how their spending impacts the company’s bottom line, they are more likely to be deliberate with their T&E expenses—and that’s exactly what you want. Show employees how their food spend influences overall sales efficiency and contributes to company success. Share examples from recent sales meetings or lunch-and-learns so that they understand the direct correlation between their spending and the company’s performance.
- Teach employees how to determine ROI and disclose what you’ve found to be the ROI of certain transactions.
- Show employees how to apply this ROI to their own spending. For example, let’s say that the average lunch-and-learn earns $500 in savings for your company because it both improves compliance and efficiency. Then, show them that these results are the same whether you plan an event that costs the $75 in food spend or one that costs $100. Explain, in that case, how a $525 budget provides higher returns with seven $75 lunch and learns than it would with five $100 lunch and learns.
- Centralize the ordering process. Having a centralized ordering process or system, like ezCater, will make it simpler for meeting planners to choose between a wide range of caterers while staying within the per-person budget limit. Likewise, this can help make employees aware of added information like delivery costs and discounts, which gives them the ability to better control these expenses.
- Teach employees how to use the centralized process with periodic training sessions. Not only will this help them optimize food spending and increase sales efficiency, but it can also increase sales productivity.
- Plan your own food spend. Encourage employees to create their own budgets within the T&E guidelines you’ve set. Your business uses a budget to control corporate spending. Your employees use personal budgets to control personal spending. So why shouldn’t employees make budgets for their own company spending? Not only will this help with savings but it will also illustrate for employees on paper how their spending decisions directly impact their performance and potential commissions. For example, an employee creating a budget may see that they can afford to do four sales dinners in a month. If they want to do five in order to meet a company quota, reviewing their budget may help them realize that they can fit in more meetings if they serve lunch instead of dinner.
- Create a simple budget worksheet for employees to use that can be stored in the cloud and accessed on mobile devices. Include expense lines for tipping, taxes and delivery costs, as well as an area to reflect discounts.
- Consider requiring that the budget be turned in with monthly expense reports. Alternatively, host quarterly meetings to discuss employee findings from completing these budget forms.
Equip your employees with the tools and tricks they need to optimize underlying spending on T&E expenses while actively following a budget. If everyone does their part, your company can achieve record sales efficiency that greatly increases profits.