35% of employees are STILL being asked to use their own money to pay for business expenses
A new report released today by payments experts, Caxton, has revealed the challenges posed by expense management processes and policies within many UK businesses – resulting in UK PLC facing £2.8bn in lost productivity each year.
The survey of 150 financial controllers’ attitudes to expense management found that 23% of UK businesses – that’s almost a million companies – still process expenses using paper-receipts stapled to an expense form. This is leaving organisations more vulnerable to expense misuse, as well as being significantly more likely to waste time chasing incomplete forms – up to 100 hours a year.
Shockingly, the research found that over half of UK businesses (53%) either do not have an expense policy at all or feel that theirs is not fit for purpose. 36% of financial controllers surveyed feel that they have insufficient control over spending limits.
“With the amount of financial scrutiny that UK companies operate under today, there is no real excuse for financial controllers not to have a clear and efficient expense policy in place,” comments Jane-Emma Peerless, Chief Commercial Officer at Caxton. “Many of the organisations we work with are constantly looking at ways to improve their efficiencies and drive costs down. Simply by switching to an automated expense process could improve the productivity of your finance team by nearly 100 hours a year.”
The research findings coincide with the launch of Caxton’s new Business management platform. This provides a fully automated end-to-end expense solution, including a choice of two different corporate cards depending on business needs, a mobile app to let employees quickly record and store all their receipts, and back-end functionality that enables accounts teams to track and manage expenses in real-time.
The research highlighted that paper receipts are listed as the biggest frustration for financial controllers, and – 35% – mainly in companies with under 500 employees – feel their system places an unnecessary burden on employees. In addition, 35% of companies still ask their employees to pay for their business expenses out of their own pocket then claim it back.
Peerless continues, “There is a big HR issue that needs to be addressed when it comes to managing expense policies and it goes well beyond saving businesses money. No one likes being out of pocket because of slow or delayed payment for business expenses and it has a direct impact on personal finances. Staff dissatisfaction inevitably contributes to poor company culture – delayed payments could lead to distrust and resentment and it ultimately reflects badly on a business. Secondly, there is the consideration and motivation of accounts teams who are constantly chasing lost receipts and wrongly submitted expense forms. This is demotivating, wastes time, and does nothing for productivity.”
The research also found that expense misreporting is rife, but that companies with automated expense platforms are slightly less likely to suffer. Companies with a paper-based expense process had experienced higher levels of misuse of company expenses by employees with 91% saying that they had experienced issues once or more over the last 12 months, compared to 84% of companies with automated processes.
“As our research shows, automating expense management is unlikely to eliminate fraud and misuse completely, but it does shine a torch on it at an earlier stage. At Caxton, we have been developing our technology based on our clients need for control and oversight for the last 17 years. That is why our new platform focuses on reducing paperwork while addressing misuse and fraud, and helps companies take control of their business expenses, boosting productivity whilst delivering measurable improvement to the bottom line”, Peerless concludes.
For more information about the latest insights into corporate expense management, download the 2019 Caxton Expense Management Report.