I bet you have a solid expense policy for things like airfare, hotels, car rentals, and business meals. It probably has thoroughly-researched spending limits based on reams of data, pre-negotiated rates with preferred vendors, and conveys your expectations for how employees are expected to spend company money. Heck, at one point you may have brought the Bobs in to consult on it.
But my guess is there are a bunch of things people spend money on that aren’t covered in your policy, which means spending on them is all over the map. Big-for-their-britches types overspend when they have no business doing so, and Earth-inheriting-meek types don’t spend enough when they should (or worse yet, cover the expense out of their own pockets). Nobody knows better than you that policy clarity makes spend predictable, drives consistency, and ensures fairness.
With this in mind, we pored through aggregated, anonymized data from our nearly 1,000 enterprise customers to surface insights and best practices for our State of AI in Business Spend report. One of the questions we sought to answer is, “What about the non-obvious expenses beyond things like airfare and car rentals? What do companies allow? And what are their expense limits for such things?” We analyzed enterprises’ configuration data (to see whether they have a policy) against actual spend approval averages (to see what they’re approving) for 21 expense types to get the answer. Here’s what we found:
You may have a preferred airline and rules around who can fly business or first class and under what circumstances, but what about upgrades? 28 percent of companies have a policy for upgrades with an average approved upgrade amount of $50.
Do your employees drive a lot for work or rent cars when they travel? You may have the car rental thing figured out, but what about people who rent GPS systems (geez, are there actually people in the world who don’t use Waze?)? 24 percent of companies have a policy for GPS upgrades with an average approved spend of $176.35. How about allowing car washes? 24 (also) percent of companies have such a policy, and the average approved spend is $29.10. How about roadside assistance insurance? Only three percent of companies have this policy, but the average approved spend is $100 per year.
Business meal policies are usually pretty straightforward, but what about room service? I mean, companies have been known to go broke on $50 of scrambled eggs! 16 percent of companies have a room service policy with an average approved spend of $60.83. And minibars? 15 percent of companies have such a policy, and the average approved spend is $21.34. Thank goodness, too, because I could pretty much take out a home equity loan on peanut M&Ms when I’m desperate late at night. And the biggie. The mother of all business travel expenses…Booze. Only 18 percent of companies have a policy about alcohol spend, but the average approved spend is actually reasonably high: $104.16 per person (that’s a lotta happy hour Moscow Mules…or just one lovely glass of mineraly Chateauneuf-du-Pape).
Do companies reimburse for cell phone service anymore? Feels like it’s going the way of landlines these days, but actually 41 percent of companies still have a policy, and the average approved spend is also decent: $83.95 per month. How about internet service? 37 percent of companies have a policy on this, and the average approved spend is $76.40 per month.
In the category of “big spendah,” 21 percent of companies have a policy for expensing sports tickets, with an average approved spend of $550 per ticket or package (I’m clearly in the wrong line of business as I’ve never been to a sports event on the company dime!). Golf is also a hefty one, with 39 percent of companies having a policy on the activity and an average approved spend of $326.57. For the not-so-spendy, movies are also a thing. 17 percent of companies have a policy on movies, and the average approved spend is $25.50 per person.
Unexpected Travel Costs
What if you’re headed to New York on business and the person next to you spills his coffee on your lap? If you’re staying at one of those swanky hotels with same-day laundry turnaround, you can send out your suit pants while enjoying room service in your skivvies. 39 percent of companies have a policy on laundry service, and the average approved spend is $43.57. What if it’s not actually coffee your neighbor spills, but the spaghetti and meatballs he just got at Sbarro en route to the gate? Whoo hoo, shopping spree! 19 percent of companies have a policy on clothing purchase, with an average approved spend of $160.53. And luggage? 28 percent of companies have a policy on this, and the average approved spend is $114.30. Finally, what if there’s a real emergency (I mean, bigger than the Sbarro incident)? 16 percent of companies have a policy for personal accident insurance, with an average approved spend of $150 per year.
Companies need to recognize their strong performers. Managers sometimes purchase gift certificates, spa visits, and other employee rewards and then expense them. 11 percent of companies have a policy for this, and the average approved spend for awards is $63.41. When it comes to gifts for employees, customers, or partners, nearly half (46 percent) of companies have such a policy. The average approved spend is $112.05.
Beyond great pay and awards, many companies offer perks. While most perks are procured by human resources or group managers, some items are expensed. Seven percent of companies reimburse for bicycle maintenance for their eco-friendly commuters (I hate those people…they’re all in great shape!), with an average approved spend of $209.26 per year. Other annoyingly healthy people expense their health club visits. 11 percent of companies have a policy for this, and the average approved spend is $32.02 per day. Last but not least, nine percent of companies have a policy for coffee card reload (now you’re speakin’ my language!), with an average approved spend of $20 per reload.
There you have it: From coffee cards to car washes, it’s 21 expenses that you may not have considered in your policy, but probably should. What oddball, thorn-in-your-side expense types are missing from this list? Send us a note at firstname.lastname@example.org, and we’ll dig it up for next time!
Reimburse employees in hours, not weeks, with AI
When are normal business activities deemed “bribery”?
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