Research released by Aurora Kendrick James, the telecom expense management specialist, shows that workers in the UK spend around £400 million every year talking to friends and family on company mobile phones with the bills paid by their employer.
This huge cost not only undermines the profitability of British businesses, it also puts them at risk of inadvertently breaking tax regulations by mistakenly reclaiming VAT on the total mobile phone bill – rather than reclaiming just the business element. This simple error means that potentially some £150,000 is being incorrectly claimed from the Exchequer every day.
Based on ten years of analysis of patterns of telecommunications spending and habits in the UK, Aurora Kendrick James believes that personal calls account for between 20 and 25 per cent of all calls made on company mobiles.
According to Jeremy Green, Principle Analyst at Ovum, the UK’s 3 million plus corporate mobile phones attract an annual bill of some £1.7 billion – and that puts the cost of personal calls at between £340 million and £425 million.
The mobile phone has become the first choice business tool to maintain contact and retain control of work while out of the office. Convenience and availability means that mobile phone use – even while sitting at their desk – has become the norm for many people. The devices themselves provide access to key information such as contacts, email, and web-based services and as a result can be used for every aspect of modern business and personal lifestyle.
According to Aurora Kendrick James, few businesses actively monitor and manage personal usage, which means they are losing control of the cost and usage of the tool that should be delivering improved control and productivity for its workers.
So what can businesses do to take control of company mobile costs and usage? Matt Atkinson, managing director at Aurora Kendrick James stresses the importance of implementing a company policy and publishing guidelines on mobile phone usage to educate employees on the potential costs and the importance of mobile expense management by individuals. He has highlighted four simple steps to improve efficiency, cut business costs and reduce fraud:
1. Review and analyse – assess the current situation of the company’s mobile estate and determine the potential cost to the business.
2. Collate and log – create an accurate inventory of users against which costs and usage can be monitored.
3. Control and guidance – agree a fair company usage policy and decide whether the aim is to control and reduce personal usage or actually reclaim costs from from users.
4. Educate and publish – educate users on their mobile usage and costs, reinforce the policy with monthly usage statements.
Aurora Kendrick James estimates that businesses can often release more than £80 per annum per user in cost and resource savings through implementing a structured mobile expense management program.
“Education and visibility of costs to users are pivotal in successful mobile expense management. By having a company policy in place and introducing employees to it, staff can be made accountable for their costs against sensible guidelines,” Matt Atkinson explains. “Implementing a mobile expense management policy will control and reduce personal usage but will also help with VAT compliance, validating invoices, tariff negotiation, management and inventory reporting; all of which will mean a more cost effective and controlled mobile estate.”
Aurora Kendrick James (AKJ) is one of the UK’s leading providers of telecom expense management (TEM) services.
To learn more about best practice TEM, visit our web site at: www.akjl.co.uk/tms.html where you can download our latest podcast on “managing personal use of business mobile phones”, access a range of best practice guides and case studies form our resource centre and find out more about our series of seminars with presentations from customers who have already reaped the benefits from implementing a TEM policy.