Companies still have significant scope for savings on indirect T&E costs, a new study by American Express has found.
While indirect spend has dropped from 5.6% to 4.6% in the last five years, Amex said that “best practice” could save up to 55% on the average cost of planning a trip and 47% on expense claims.
The European Expense Management Study 2008 said that indirect costs could be cut by 54% from 4.6% to 2.1%, a saving of 25 on every 1000 spent.
The biggest savings in real terms could come from expense claims processing which represent more than half (52%) of indirect costs.
The average cost of expenses claims processing is 17.64. But with best practice this could be reduced by 47% to 9.28.
Trip planning costs could also be cut from the average of 11.06 by 55% to 4.96through best practice.
For improving processes, Amex said best practice was investing in automation and having a high adoption rate of tools and system usage.
But while Amex said companies were spending less on indirect costs since its last expenses report in 2003, some were spending up to 34% on these costs.
The study also found that only 21% of companies had processes which flagged up out of policy spending during the trip planning stage.
73% had processes to check out of policy spend but only after it had been spent.
Karen Penney, American Express's vp business solutions group, commercial card EMEA, said: "While European businesses have, on average, continued to drive down the administrative costs of business travel, shaving 1% off costs in the past five years, there are still savings to be made by adopting best in class practices.
"In the current economic climate the pressure to reduce costs and improve productivity is intense - streamlining the "back office" process and achieving savings in T&E administration costs should no longer be elusive.
"Given the progress made by European businesses since this study was last completed in 2003, we would expect further advances and a shift towards best practice behaviour before 2013."
* Amex and its partner AT Kearney interviewed 66 multi-national and large companies in ten European countries: Belgium, Finland, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland and the UK.
* See BTE Analysis