Hands Tied Over Expense Management

Most companies have a mandate to cut expenses—by an average of around 20 percent—but many lack efficient systems that would help them make such cuts.

A recent survey by Forrester Consulting, commissioned by American Express, polled 216 decision-makers in North America, Europe, and the Asia Pacific region who have responsibility for expense management. Although other recent surveys have shown cost control as middle-of-the-pack and falling in importance when treasury and finance managers are asked to rate a list of concerns, the Forrester survey found that three-quarters of companies are operating under a management mandate to cut expenses this year.

Forrester divided the respondents into two categories based on company size. It defined midmarket firms as those with 100 to 999 employees and large enterprises as businesses with 1,000 or more employees. Among respondents from large enterprises, 76 percent said their company is under a management mandate to cut expenses, and the average size of those cuts is 18 percent. Among midsize businesses, 72 percent of respondents said they have a management mandate to cut expenses, and by an average of 24 percent. (See Figure 1.)

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