5 Expenses Your Company Is Probably Wasting Money On

Expenses Your Company Is Wasting Money On

Optimizing corporate spend can help your business find cash you didn’t even know you were wasting. Traditional corporate cards make it easy for employees to book travel, register for events, and subscribe to SaaS apps — but after the initial spend, who is following up to make sure the purchases are actually being put to use?

In addition to helping you get the products and services your business needs, a spend management platform should also help you stop hemorrhaging money on things you don’t need. These costs often go undetected, especially when travel plans change unexpectedly (thanks, COVID!) or employees leave the organization but don’t take their subscriptions with them.

Here are some of the most common expenses your company is probably wasting money on. But don’t worry — we’re here to help you take control of your finances and seal up any leaks in spending.

1. Rogue Credit Cards

If your company is still using traditional credit cards there are probably a lot of them floating around. But if you aren’t constantly monitoring their use, unapproved or inappropriate purchases will likely go unnoticed until month-end reconciliation. That can mean employee expenses go unchecked for weeks, resulting in items or services being used and no longer refundable.

Too many cards, too little insight, and no clear approval barriers mean that companies can lose a lot of money each month if employees aren’t respecting the company expense policies.

Virtual (and virtually controlled physical cards) eliminate these problems by allowing managers to set spend controls like amount, expiry date, and vendors, as well as automating approval flows.

2. SaaS Subscriptions

SaaS subscriptions play a huge role in how people at most companies get their work done. But that doesn’t mean there isn’t cash to be saved on your subscription expenses.

Zombie accounts — ongoing subscriptions that belong to employees who have left the company — are one of the most wasteful expenditures when it comes to SaaS. The former employee may be denied access to the account, but the user license or account itself often goes undeleted — so you’re still paying for it.

You should also be wary of auto-renewals. There might be SaaS tools your team isn’t using that are automatically renewed for year-long terms. As for the tools you actually want to renew your subscription on, a quick call with the vendor prior to renewal could get you a loyalty discount and ensure you are only paying for features that you need.

Which brings us to unused features or licenses. 

A new vendor is always going to try to sell you more than you need. Some features might be neat but not necessarily essential to your work, so you play around with them for a week and then never use them again. Then when it comes time to renew your subscription, you just stick with the same package as last time. If this sounds like you, you’re probably paying for features you don’t use (and maybe don’t even know about). Break down exactly what you’re paying for, cut out the stuff you don’t need, and reevaluate if you are subscribing to the right plan — skipping down even one tier can save you some serious cash.

As for licenses, be sure to know how many people really need a particular SaaS app. There may be entire departments who don’t need photo editing software that have (not so cheap) licenses for it anyways. This is especially important for SaaS apps that charge per user. Companies are estimated to spend anywhere from $5,000 to $10,000 on SaaS per employee per year  — so cutting out unnecessary licensing expenses can save you a ton of money.

Avoid these issues with a spend management solution that provides insights and reporting, letting you know where unused SaaS payments are being made. It should also be able to alert you to any unusual or duplicate charges. Some virtual card providers even let you lock cards to particular vendors, ensuring that there are no errant charges by employees or from vendors.

Manage Your Payments With Full Control & Visibility

3. Travel

Stuff happens, and plans change — but that doesn’t mean you should still be paying for unused flight and hotel expenses. Any business’s top safeguard against overspending on travel is a company travel policy. This should outline what can and cannot be expensed as a travel cost, and should also list ranges and budgets for accommodations, flights, and meals based on the destination. 

There should also be a clear policy for what to do in the event of a cancelation. Whether that means ensuring that employees purchase cancelation insurance or booking through a service that provides refunds or credits, whoever is making purchases needs to be familiar with your company’s rules.

In the wake of the pandemic, many companies revised their stance on in-person meetings and mandatory travel — and it’s definitely worth taking the time to consider which business trips are necessary and which ones are unnecessary and unproductive. Forbes estimates that more than $15 billion a year is wasted on airfare, accommodation, food, transportation, incidentals, entertainment, and operational costs for meetings that are ultimately unproductive.

As for those necessary business trips that go off without a hitch, make the finance department’s life easier with a travel solution that provides designated virtual cards and automated expense reports. Virtual corporate credit cards can alleviate wasteful travel expenses by allowing finance managers to set customized spend controls like the amount and expiry date on each card. Digital receipt collection also means that every expense can be easily accounted for on-the-go.

4. Pre-Payments

It’s great to take initiative and think ahead, but sometimes pre-paying for expenses too long in advance can lead to forgotten charges and wasted funds. 

Registering for events is one area where companies often lose money. They can be costly and non-refundable, so it’s crucial to confirm employees’ availability before reserving tickets and booking travel. You don’t want to spend thousands of dollars on your company’s booth at a conference or trade show only to have employees unable to attend when the date approaches. Keep an eye on deadlines for registration, and weigh the benefits of savi