Outdated expenses policies damage the most financially vulnerable employees. Expend's CEO Johnny Vowles looks at how and why this is happening.
Despite the rapid pace of change in business, in no small part influenced by the wealth of exciting new consumer technologies made available in the past few years, expenses procedures are still a bore for business owners, accountants and employees.
In offices around the country, employees are expected to print off spreadsheets and attach individual receipts to reclaim expenses. This archaic process is slow and inefficient, but it remains the standard practice for the vast majority of UK professionals.
As with most business decisions, sticking with an outdated process simply because it’s familiar can eventually have a detrimental impact on efficiency. If a process isn’t working optimally, it is costing the business money. When we consider something as all-encompassing as employees’ filing expenses across the whole company, it could be time to reconsider the approach.
The age-old issues with receipts and spreadsheets
We often hear from our customers how their previous expenses processes were costing them time and money. This got us thinking about the impact expenses are having on wider UK businesses, and in particular, which workers are most feeling the strain.
When it comes to employees floating the business for 30 days, businesses don’t do it intentionally as a cash flow solution, but the problem still exists and commonly impacts the least financially able employees in the business.
So, we commissioned research with OnePoll, canvassing the opinions and experiences of more than 1,000 UK professionals about their monthly expenses processes. The
survey highlighted that among the 18-24-year olds bracket, over a third (36%) of workers have had to ask friends or family for cash because of being out of pocket through expenses and more than a quarter (27%) have put expenses on a personal credit card or gone into their overdraft while waiting for them to be reimbursed.
Living costs continue to rise and it is now unacceptable that many employers expect younger employees to simply pick up costs for business travel, meetings or otherwise. When it comes to employees floating the business for 30 days, businesses don’t do it intentionally as a cash flow solution, but the problem still exists and commonly impacts the least financially able employees in the business.
Bringing expenses into the 21st century
Automating expenses claims processes has been a priority for accountants and business owners for years. For both parties, gaining a clear overview of company spend allows for routine financial planning which leaves less chance for surprises and vacillating budgets. With the advent of smartphones and cloud services, automation is now a viable option for businesses of any size.
For accountants, automation means less time spent compiling receipts and correcting employees’ mistakes, enabling them to focus on more important functions like tax, payroll and accounts payable. For financial decision makers, expenses can become another standardised process which allows them more time to better plan finances and direct business strategy.
Modernising expenses needn’t be a hassle and the time and money saved can actually give companies a competitive edge.
Accruing and reclaiming expenses is almost as old as business itself, but expenses procedures have largely stood still. Modernising expenses needn’t be a hassle and the time and money saved can actually give companies a competitive edge.
The plethora of exciting new technologies available mean there is no reason not to embrace automation to the benefit of better financial planning. It’s time for finance teams around the country to deliver the same benefits to expenses as other areas of business have already been benefiting from for years.