How to keep track of expenses with employees working from home
In response to the effects of the Covid-19 pandemic, many SME businesses in the UK have now set out their hybrid working policies, enabling employees the freedom to choose where they work best either all the time or at least some of it.
According to research, 71% of SMEs plan to implement hybrid working long-term, though many of those may not have considered the new challenges that may arise for finance professionals – especially when tracking expenses. Clear hybrid working policies and investment in technology to manage budgets will be needed.
What’s changed with expenses tracking?
Global manufacturer, Barco, recently revealed in its latest survey that a third of UK employees felt their company has not prioritised investments needed for better hybrid working.
While there is ‘no one size fits all’ approach, it’s crucial to consider what has changed during the pandemic and if working models are changing, how businesses need to adapt to ensure finance professionals feel supported and invested in.
Before the pandemic, it would have been much easier for financial professionals to track and predict likely outgoing expenses month-to-month with workplace routines typically consistent. But now with hybrid working, employees' work patterns are much harder to predict and follow as many employees have been given the freedom to have more say over how and where they work.
The starkest change had been travel expenses which fell substantially, as we identified in our expenses report for 2020, while expenses linked to the home environment (which may have never featured in claims before) have increased. While travel expenses may have been the predominant claim for employers, recent expenses could largely be attributed to the cost of supplying equipment; laptops and ergonomic chairs, business stationery and storage solutions, through to broadband upgrades to meet service demand.
A hybrid model might mean finance pros are managing claims for home-office expenses, requests for expenses for drinks and refreshments while set-up working in a nearby café for example, and also for face-to-face meetings again.
Though virtual meetings will continue, according to research by Harvard Business Review , 95% of people say face-to-face communication is essential for long-term business relationships, and a study by Forbes on the same topic revealed that 85% believe they build stronger, more meaningful business relationships, indicating it is likely many teams will be encouraged to reintroduce physical meetings. Meaning travel and hospitality expenses will once again increase.
The importance of the right expenses management system
We already know that finance professionals are often stretched for time, and more than one in ten of respondents in our financial pain points survey believed that expenses management was their least efficient function.
So it’s clear more needs to be done to modernise this process and with the transition to hybrid working, it could be the ideal opportunity for SMEs to review the claims process.
There are many reasons why expenses need to be well-managed – from reducing the risk of fraud, to staying on top of the level of claims coming in. In order to meet this demand and free up finance professionals' time to handle other value-added tasks, they need the technology in place to help support their work.
Small businesses, in particular, especially those 71% of organisations considering the shift to hybrid working, may find expense management and reimbursement a daunting task – with some taking longer than it should to reimburse employees because they have poor or outdated processes in place.
Digitalisation, however, is making tasks like these simpler because paper documents and excel spreadsheets – although a stopgap for many – are easily misused or misplaced.
Automating expenses opens up a world of opportunity; freeing up significant time and resources for finance professionals, but also enables them to pull off valuable insights at the touch of a button. Not only does a manual expense process drain your physical resources, these inefficiencies actually cost the business more money per claim than an automated system in the long term.
It’s also worth considering the security aspect behind automated expenses management systems. Scanned receipts, mileage tracking through Google Maps and built-in spending limits (often grey areas once used to commit expense fraud) help to put a stop to fraudulent claims. Backed up with a modern technology solution and an up-to-date expenses policy that meets the demands of the workforce and a new working model, the risks of getting stung are much lower.
Un-blurring the lines
There are a number of grey areas to consider when putting together a revised expenses policy. With many businesses allowing their employees full flexibility to work when and when they want, it can often lead to blurred lines – especially if an employee decides they work more productively from a café or public space, and places an order for food and drink which they may claim back on expenses.
It’s deciding what can and cannot be expensed. Once your policy is in place, it’s important you ensure all employees meet this policy. In-built controls in your audit process will help finance professionals check they are within tax laws and following new company policies – it’ll also reduce the time spent by finance pros clearing up issues with the team surrounding what can and can’t be included.
Digital solutions like expense apps also removed barriers to submit expense claims from remote workers, and ensure receipts are submitted to finance teams effectively and on time.
The Access Group’s expense management software enables employees to digitally capture their expenses for faster paperless processing and they can also complete and submit every type of expense online.
Paper receipts have a habit of going missing, and when you lose a receipt you can’t then claim back the VAT. Each time this happens, it costs your business money. According to a report from the Financial Director Magazine, that extra day spent chasing down lost receipts can cost businesses almost £3,000 per year; a staggering figure that could only be compounded by the hybrid working model if not managed well and with the right tools.
With so much money coming in and out of the business, it’s important to track costs and these are bound to fluctuate daily. Real-time reporting tools, however, could be a useful companion for any finance pro. Live dashboards, which can be tailored to your needs, will provide a real-time view of expense costs to monitor spending no matter where claims were submitted.
Added to that, a visual view of data and analytics means trends can more easily be spotted and problems identified sooner.
With the right automated tools at their disposal, finance professionals will be well-equipped to manage the influx of expense claims that are sure to come in as their teams bed into a hybrid working model.
Let our finance experts walk you through the leading online expense management system. Book a demo today.