Staff Writer AccountingWEB
Share this content

Expense policies: The price of oversight

Recent research has found that more than a fifth of business travellers have no expense restrictions imposed by their company. Failing to put policies in place can be a false economy.

14th Oct 2019
Staff Writer AccountingWEB
Share this content
Expense illustration
Lesia_G_AW

The Global Business Travel Association estimated that 21% of business travellers admit to not having any controls on their company expenses. This would suggest that nearly 1.2m businesses in the UK let employees claim expenses at their own discretion in the absence of a clearly defined company expense policy. 

Expenses management software developer Fyle delved more deeply into the research in a resource available on AccountingWEB, and found that only 44% of employees said they had to follow expenses policies. The figures indicate a continuing blind spot among UK businesses when it comes to expenses policy and enforcement.

Fraught with difficulties

Tracking expenses is vital to keep a handle on the financial pulse of a business and to document outgoings for tax and accounting purposes. But for employees and employers alike, the process is often fraught with difficulty – thanks in part to human nature. 

Employees are notorious for leaving receipts crumpled at the bottom of their pockets or handbags, and for submitting their claims weeks or months late. Finance teams, meanwhile, spend a lot of their time manually transferring data from Excel expense forms into their accounts systems.

A new wave of expense management tools has simplified data entry and given employees the ability to bypass spreadsheets and enter their receipts straight into the system remotely. However, as statistics confirm, they are nothing without enforced expense policies. 

Elusive expense policies

According to Fyle report, few companies are willing to commit to the time and cost involved in setting out and enforcing such policies. Employers and employees both tend to view expenses as a necessary irritant to keep the business ticking over. As with many administration tasks, employees and managers can’t spare the time to step back and take a more strategic approach to tackling operational matters – even when they could reap long-term gains by putting a policy in place.

Such short-term thinking often becomes a self-perpetuating prophecy. When companies leave expense management on the sidelines, they can miss out on opportunities to streamline the whole process. If they took the time to pinpoint and resolve areas of contention, they could save the company far more time and money than it would cost to set up a new system.

How software helps

The Fyle report highlighted where modern expense management technology provides notable benefits. The primary benefits include:

  • Compliance with travel policies, preventing potential legal issues
  • Highlighting inefficiency by monitoring company spending trends
  • Data analysis to identify potential savings from specific suppliers
  • Speeding up the reimbursement process by removing or improving admin bottlenecks
  • Real-time updates that flag potential issues immediately, saving unnecessary extra cash flow. 

With effective expenses software, locating and examining any individual claim is no longer a laborious task, and the resulting visibility can deter potential policy violations. This, in turn, can save the businesses from having to resolve these would-be issues with employees. 

For more detail on expenses management, download Fyle’s whitepaper, The role policies and analytics play in expense management.

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.