The term T&E is bandied about a lot in business and, as with most business acronyms, people assume that it's automatically understood. In case you have ever wondered what T&E stands for, this blog explains not only what T&E is, but also why the term is important in the business world and how paying attention to your T&E spend can save your business time, hassle and money.
The basics: what does T&E mean?
The term T&E means either 'Travel & Expense' or 'Travel & Entertainment Expenses'. These phrases (T&E, T and E, travel and expense, and travel and entertainment) are often used when talking about the second largest operational cost, after salaries. According to Aberdeen, "business expenses related to travel and entertainment encompass 8% to 12% of the average organisation's total budget". So it's a big deal if you're concerned with either saving costs or making your business processes more efficient.
What are the business implications?
According to the Aberdeen Group "State of Travel and Entertainment Expense Management" report, over 53% of enterprises place a high priority on expense management. It makes sense, when you think about it, because your company's travel and expenses budget is one of the key places where you could be looking to reduce costs.
What does this mean for you?
If you are involved in reducing company costs - you might be a CEO, CFO, Financial Director or anyone in finance or management really, then you know that saving money is necessary. Saving money on travel and expenses may not seem like much of a priority for several reasons, however.
- Firstly, you might not be able to put your finger on how much your business is spending on T&E exactly, at this moment. You wouldn't be alone. As part of HMRC's Business Records Checks programme (BRC), they found that 40% of the businesses visited, had "issues with their record keeping" and in 12% there were "seriously inadequate records".
- Secondly, you might not think that there are ways to save a lot of money on your expenses bill. Fortunately, this is not the case. Once businesses know their real spend (and a good T&E system will tell them this) they are often surprised by how much they spend with the same supplier. This information provides a great leverage point for negotiating lower prices.The benefits of understanding T&E, and improving T&E processes, are also applicable to business travellers. Your employees might not all travel frequently, but even if they hardly ever travel or submit expenses the chances are that they will occasionally need to buy things for the company out of their own pocket. And when this happens they will want to know that they will be paid back, and promptly.
A good T&E management system will give you visibility of your spend and enable you to reimburse employees more quickly, while ensuring they are submitting expenses that comply with your company's T&E policy. And if you don't already have one of those, download this helpful expenses policy guide and sample template.
Are there any other confusing terms that you would like to be explained? Let us know in the comments block below…
 T&E Expense Management, A Solution Selection Guide, Aberdeen Group: August 2012