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Taking the complexity out of the expense process

A new white paper from spend management software company Concur aims to help businesses get a better handle on employee expenses

 

The very thought of filling out an expense form fills many employees with dread. The search for receipts, the trawl through the diary, figuring out what is allowable and what is not, all contribute to making it an arduous and unwelcome task. And the problem is magnified many times over for finance departments that have to sift through the forms and supporting documentation to figure out if claims can be approved or not.

The cost in terms of time and effort for both the finance teams and the employees claiming the expenses is considerable but it gets worse when exaggerated claims are taken into consideration.  Research carried out by spend management software company Concur, found that as many as one in five employees in the UK are guilty of exaggerating expense claims, while the figure climbs among Millennials. There is no reason to believe that the Irish experience would be much different.

These discrepancies can create friction between claimants and finance departments with the claimants attempting to exploit loopholes and grey areas in the system. Indeed, one of the key reasons for exaggerated and inflated claims is poorly understood expense policies according to a new white paper on the subject from Concur.

Cracking the Code on Expense Compliance is aimed at helping businesses get a better handle on employee expenses. And companies do need help due to rising costs and the need to comply with Revenue rules on expenses. For example, the Revenue is quite strict in terms of what it defines as allowable business expenses – payments to employees for items outside of those are treated as benefits-in-kind and have to be taxed as income.

Concur found the biggest problem a company has is that nobody remembers what’s in the travel and expenses (T&E) policy. It might have been explained to the employee when they first joined but now it sits somewhere in the back of a filing cabinet or a hidden corner of the intranet and everyone involved thinks somebody else is looking after it.

This needs to be addressed by making the policy simple and easily accessible. It should be written in non-legal terminology and be clear and comprehensive without being an exhausting read.

Above all, the policy has to be seen to be fair. In no way should the organisation come across as being somehow penny-pinching when it comes to reimbursing legitimate employee expenses. The message should be that employees who treat the company fairly will be treated fairly in return. This will help take away the excuses from those who think that exploiting the system is normal practice.

There is also a need for some flexibility. The policy should evolve over time in response to changing conditions and employee feedback should be taken into account in this process.

How the policy is communicated is critically important. While it does need to be accessible 24/7 on the intranet or secure internet site it may also be necessary to hold regular employee briefings on it to ensure it is properly understood.

Understanding the policy is just the first part of the solution. The other key element is the claim process itself and this is where technology comes into play. Not only can online tools make it easy for everyone to access travel and expense policies at the time of submitting claims, but they can help with making the claim.

Taking the dread and ardour out of expense claims is one of the best ways to get control over them and of getting employees on board. Technology can help you create digital paper trails that bring simplicity and transparency for everyone. It also makes it harder to fiddle expenses.

For example, mobile apps can allow employees to use their smartphones to take pictures of their receipts and immediately upload them to their expense reports while still at dinner, in the taxi or up in the air. Intelligent optical character recognition (OCR) technology can even read the data on the receipt and automatically fill in claim forms with minimal input from the claimant. Approvers can also sign off claims while on the move, speeding up the process for all concerned.

According to Aberdeen Consulting research, mobile technology has been shown to reduce the time it takes employees to submit and approve expense claims by 28 per cent. Compliance rates also improve quite dramatically with Aberdeen Consulting finding that mobile users have a 91 per cent compliance rate versus 59 per cent for non-mobile claimants.

Direct connections with partners like corporate credit card issuers, hotel groups or car rental companies can also help to feed accurate information directly into an expense tool, making it far quicker and easier to capture data. Furthermore, third-party tools, such as Google Maps, can integrate with expenses software to make it easier for employees to calculate business mileage – and make it easier for managers to spot exaggerated claims.

Travel and expense compliance is a key requirement for the health and culture of a business. With the right tools and approach, compliance becomes easier and employees no longer need to dread the process.


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.