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Many businesses hire consultants. It is a part of business life. While they bring with them valuable knowledge and insight, they also bring expense claims, particularly for travel. Without explicitly setting out what they can and cannot claim for, the business will not have control over an area of spend that has the potential to get out of control quickly.
In a discussion on Collaborate, an online portal for procurement executives to share best practice, it was suggested that procurement can have a positive influence here by taking a few simple steps.
It should never be assumed that every consultant’s interpretation of what can and cannot be expensed is the same. It is therefore essential to make sure all consultants have an understanding of what can be expensed and this starts with having them agree to a travel and expense (T&E) policy. Although no T&E contract is the same, there are certain elements that, if included, will make expenses easier to manage. These include an understanding of the standardised T&E policy currently in place, making clear what is not eligible for reimbursement and having an agreed spend cap in place.
Within this, a number of buyers agreed there should be a specific cap on spend to help control it further and that consideration should be given to expenses incurred as a result of consultants working late or travelling with others.
Beyond communication, the discussion also advised procurement executives to make sure they themselves fully understand the ins and outs of the T&E contract, or at least can communicate clearly with the legal department about them. That way when relaying or setting out information for consultants, they will be able to do so with confidence.
Procurement will not be entirely responsible for drafting T&E policies, however, it should be involved in the initial planning stages, which will help it gain that understanding.
Once a T&E policy is laid out it should never be forgotten. It must be continually reviewed to understand what is working and what is not and where it can be improved, said procurement executives.
There should also be an investigation into whether parts of the policy can be automated to keep tight control while also freeing up the function’s time for other activities.
For example, a few procurement professionals suggested introducing a dedicated tool for consultants to book travel through, as this will enable greater transparency while helping them stick to pre-approved policies.
When it comes to understanding what can work for your organisation, sometimes the best way is to network with peers. Learning from people in different organisations, jobs and industries, can help determine the best practice to implement something like a T&E policy.
Paul Cannon, global category manager of indirect procurement at Tate & Lyle, started the Collaborate discussion on managing and monitoring consultancy travel expense claims, and told Procurement Leaders how speaking to the network inspired him:
“I find Collaborate an incredibly useful tool. I think one of the best things about it is when you’re testing the status quo with a new idea or method. If you see examples of how things are done in other companies, it gives your suggestions and ideas much more credibility when you take them to your stakeholders,” he said.
“What this group allowed us to do was challenge the common way of thinking with consultants submitting their expenses. Our existing policy is considered in line with the standard industry approach. However, due to the conversations in the Collaborate group, we used one of the suggested ideas and challenged a consultancy to be smarter with the way they travel and encouraged them to maximise each journey to reduce the need for further travel. We managed to get total expenses, usually forecasted at 13%-15% of total project spend down to 10% without it compromising the quality of the work. Over time, this approach could generate significant savings for us.”
Procurement Leaders has recently relaunched the Collaborate platform with a new streamlined layout, custom notifications and tablet and smartphone functionality
This article is a piece of independent writing by a member of Procurement Leaders’ content team.