Did you know one-in-five employees think it’s okay to exaggerate expenses?
Staying compliant with your company’s travel and expenses policy is a complicated business – but there is a solution
Concur takes the hassle out of the task with a mobile solution that generates a digital paper trail and creates simplicity and transparency for all parties
Expenses are a tricky subject. From an employee’s perspective, it’s about making sure you’re getting enough back. For employers, it’s about making sure you’re not paying too much out. For each it’s a drain on time - and a minefield if you get it wrong. The margin for error is significant.
“What happens is that an employee is given a travel and expenses (T&E) policy when they start a job, most likely as part of a great big document outlining all the terms and conditions of employment, and they quickly forget what’s in it. And chances are it’s given to them by someone who doesn’t know what’s in it, usually because they haven’t read it since they started, years earlier,” says Steve Roberts, a director of expense management software company Concur.
Even if someone does remember what their T&E policy contains, it’s often hard to understand. “There’s an awful lot of grey in them, including terms such as ‘reasonable spend’, which is hard to quantify,” he says.
On top of that, the work involved in paper-based expense systems imposes an administrative burden on both employee and employer: writing up – or chasing up - expense sheets is simply not a productive use of time.
“You don’t ask the sales team to write down all their sales on slips of paper and give them to you – they have a customer relationship management (CRM) system to give visibility to sales. Concur’s software is not that different to CRM, except that it’s for spend,” he says.
As such, it helps finance departments identify an often hidden cost of doing business – the overpayment of expenses. It’s an area Concur has conducted extensive research into, available in a white paper entitled Crack the Code on Expenses Compliance.
The research found that of the expenses typically paid out by a company, on average between 14 and 20 per cent, is actually beyond the terms of its T&E policy.
Some of this is down to culture. Concur’s research found that one in five employees think it is okay to exaggerate expense claims. Worryingly, that number rises among younger staff.
Despite this finding, only one per cent of expense claims were found to be rejected – perhaps understandably given the risk to morale where a conflict over expenses arises.
An automated T&E tool such as Concur’s Expense saves on time, money and potential friction. It helps ensure greater staff compliance with T&E policies and, in turn, ensures greater corporate compliance with Revenue.
“It gives comfort to employees,” says Roberts. “One of the reasons I like working in Concur is because I can get pre-authorisation of expenses if I’m taking someone out to lunch for example, so I know where I stand. And if you were to do a poll of the top-five operational tasks people hate doing each month, expenses would be one of them.”
Concur takes the hassle out of the task with a mobile solution that generates a digital paper trail and creates simplicity and transparency for all parties, while also making expenses harder to fiddle.
Employees use their phone to take photos of their receipts while travelling and can upload them instantly. They don’t have to wait to get back to the office or hold onto them for weeks, giving greater visibility to the finance department. The solution can even guide employees as to what’s in their T&E policy before they make a claim.
Direct connections with third-party partners can help to feed accurate information directly into the expense tool too, making it quicker and easier to capture spend data. Whether it’s any spend on a corporate card, a hotel stay or car hire, the technology can be integrated with a network of providers.
It can also sync with apps like Google Maps to make it easier for employees to calculate business mileage – and makes it easier for managers to spot exaggerated claims.
There are additional yields too. “If as a business you are entitled to reclaim all of the VAT in your expenses, for example, then you absolutely should, because that money goes straight to the bottom line in terms of profit,” says Roberts.
“And of course from a Revenue compliance perspective, the flip side is that if you are overcharging on your expenses, your business potentially faces a fine from the tax man.”
In business, anything that saves time, saves money. But it’s not always easy to achieve. “The Government this year changed the rules on tax bands in relation to mileage. Where previously your finance department had to calculate employee mileage on the basis of two different rates, now it has to calculate on the basis of four,” he says.
The last thing any finance department wants, or needs, is more complexity. “Finance departments always tell us they want to be a more strategic part of their business, that they need to be part of the critical decision making, but that they just don’t have time because they are bogged down in paperwork,” says Roberts.
A software solution that keeps businesses Revenue compliant, employees T&E policy compliant, and frees up finance departments is just the ticket. And Concur can vouch for that.
To get more advice on how to Crack the Code on Expenses Compliance, download the Concur white paper or call Concur on 0044 1628 645 139