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One topic which has been on everyone's mind in the last couple of weeks has been travel. The crisis caused by the erupting Icelandic volcano is having far reaching consequences, some of which will eventually come home to roost in many organisation's AP departments. While the current situation may be extremely rare, in some cases it has only exacerbated an existing problem area.
Travel & Entertainment (T&E) expenses are notoriously difficult to control. One of the reasons for this is that the costs often fall outside the generally accepted transport and accommodation costs associated with busin ess expenses. Another reason has more to do with the psychology of an employee away on business, and the more senior the employee is, the more difficult it is to force compliance with corporate procedures.
However, this attitude is beginning to change as a tighter belt is thrown around T&E and companies are forced to become more transparent. To accommodate this, there are a growing number of solutions on the market which AP managers can take advantage of. On the supplier side of the fence, the recent partnership between AirPlus International (UK) and Invapay Payment Solutions brings cost efficiency in the area of T&E to a whole new level with the launch of the AirPlus Invapay Settlement Solution in June 2010.
In many other areas of AP, you might expect to deal with the same supplier over a number of years, and form a relationship which might extend, amongst other things, to special credit lines. When dealing with T&E expenses, it’s likely that the majority of payments will be to one-time-only suppliers, and for relatively small quantities – representing a major headache for cost efficiency.
Sid Vasili of Invapay explained:
“The AirPlus Invapay Settlement Solution was developed to help organisations manage the “long tail” of infrequent and one-time-only supplier spend in a simple and cost effective way. It is particularly helpful to UK organisations in meeting the Government’s promise of paying SME suppliers well within 10 days. By partnering with AirPlus International, we will be able to offer more cost effective and innovative cash flow and liquidity solutions for our clients and their suppliers”.
Furthermore Yael Klein, Managing Director of AirPlus International (UK), went on to say:
“What is unique about this solution is the supplier coverage. We will be able to offer our customers 100% supplier coverage, unlike competing Purchasing Card products that have to fall back on rebates to compensate for only 20% of supplier coverage. The solution, therefore offers huge process and cost savings potential to the UK’s private and public sector.”
So, while you still may not be able to stop your CEO from inviting his best clients to the best clubs in town and then attempting to reclaim it on expenses, you may at least be able to negate the overall effect of having to pay a series of one-time-only suppliers at vast expense per invoice with all the necessary time implications that would involve.
If you couple this type of solution with a degree of automation in how you deal with T&E costs, such as providing improved corporate payment cards and reporting analysis, you can make a real difference to your bottom line, which will in turn be reflected in how the AP department is viewed within your organisation.
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