Soldo UK SME Spend
Management Report 2018

A study of 4,000 UK businesses and employees into how
the spend management cycle can be made more efficient

In November 2017, Soldo commissioned YouGov to independently survey 2000 employees and 2000 Financial Decision Makers in UK SMEs in order to extrapolate a picture of how companies manage their cash flow in the UK. The picture that emerged was one of opportunity for UK SMEs to utilise new technology and shred the hours that are currently reserved for managing spend, with huge potential to streamline the systems that currently lead to significant levels of wasted money.

From overspending and missing receipts to remnants of travel budgets not being returned to businesses and the writing off of unfathomable purchases, the report also highlights a significant opportunity for businesses to empower employees with the autonomy to undertake spending independently, while cutting down on the widely reported grievances of employees who are frequently reimbursed more than a week later for personal money spent on
behalf of a company. Spanning small to medium and large SMEs, the report shines a light on a plethora of hot spots in a company’s spending cycle that SMEs that can now tackle effectively through the utilisation of newly available technologies.

EXECUTIVE SUMMARY
SOLDO’S FINDINGS AT A GLANCE

61% of finance teams said that purchasing something on behalf of their business took up to an hour

12% of medium-sized businesses said it took more than 8 hours to purchase something on behalf of the company

Nearly a quarter of all medium-sized businesses (22%) take between 2 and 4 hours to do financial detective work at the end of the month, in order to reconcile company spending

5% of medium-sized companies spend more than 8 hours a month on financial detective work.

The majority of UK SMEs (49%) expected employees to pay for their expenses up front, and reimburse them at a later date: an interesting statistic when considering this was one of British employees’ main bug bears, with 1 in 10 employees saying they had to wait longer than a week to get their money back.

33% of UK SMEs ask employees to pay upfront whatever the conditions or amount; 7% of SMEs say employees earning over a certain amount should pay expenses upfront.

Only 9% of businesses currently give employees cash in advance to cover any expenses.

Nearly a fifth of medium-sized businesses (18%) are willing to leave up to 10% of company spending as unreconciled.

Almost 1 in 10 medium businesses (7%) are willing to leave up to a staggering 20% of company spending as unreconciled at the end of each month.

Half of the finance decision makers in UK SMEs think that if employees were given spending cards that could be controlled fully, trust would increase in both the business and the overall financial process used inside the company.

As a business grows in size so does the complexity surrounding the purchase process. When something needs to be purchased for a business, there is a process in place that needs to be followed. On average, 61% of finance teams said that purchasing something on behalf of their business took up to an hour. However, when a business grows to over 50 employees time to purchase increases dramatically. Only 38% of finance teams said it took up to 1 hour to purchase: while for medium-sized businesses, 16% said it took up to 2 hours, 20% said it took up to 4 hours.

However, Soldo found that even making a single purchase on behalf of a business can take up to a staggering 8 hours+.

An average 5 in every 100 finance teams are spending more than 8 hours to purchase something, but when the company size grows to 50-249 employees the number of finance teams spending longer than 8 hours to purchase something rises to an astounding 12%.

Nearly a third of finance decision makers in companies with between 50 and 249 employees (27%) believe that if employees had a spending card that could be fully controlled where expenses were reported seamlessly and spending could be monitored in real time, they would spend more responsibly on behalf of the business.

44% said that if employees were entrusted with a controlled spending card it would increase trust in the business itself and nearly half (47%) said it would increase employees’ overall trust in a company’s financial process.

The spend management cycle uncovered: Full results from Soldo’s study among 4000 UK SMES

Employees Spend More Time Than They Need To Reporting Expenses, With The Majority Of Staff Not Enabled To Handle Company Money

One in five (22%) of employees spend up to an hour a month reporting the money they spend on behalf of a business, and as an organisation grows in size, so too does the time spent on reporting as the processes involved become more complex.

As a company grows in size the number of people able to spend autonomously when they need to reduces in size. In fact 64% of employees are not enabled to spend on behalf of the company when it reaches 250+ staff, compared with 57% of employees who are unable to spend when a company has less than 50 employees.

Soldo believes that by enabling controlled autonomous spending by staff and departments, finance teams are freed up to concentrate on more strategic areas of driving a business forward.

Managing Company Spend For An Employee Is An Unrewarding Struggle

Of all the activities associated with spend management, the activity that employees struggle the most with is reimbursement. On average, 10% of employees reported having to wait more than a week to be reimbursed for business spending increasing to 12% for larger companies with 250+ employees. This rises to 16% in education, 14% in real estate and 13% for both the IT & Telecoms and Media/Marketing/Advertising & PR sectors.

Closely following reimbursement is the task of managing receipts for expenses (remembering where they are and submitting them).

Management of receipts becomes increasingly challenging for those working in:

Overseas Travel And Wasted Cash: A Missed Opportunity

When business employees are working abroad, they are typically supplied with cash in a foreign currency or given a company credit card but does the unused cash always return to the business afterwards? It appears there is room for improvement in tightening up this process and patching up the leaky boat.

7% of those questioned do not know their company’s travel expenses policy and on average and 3% reported cash wastage of between 5-10%. For larger companies it can be as much as 15% of foreign currency that is not accepted back.

With an increasingly mobile workforce operating in a global environment, having a clear and streamlined system that allows employees to easily spend from a corporate account without the lengthy process involved of reporting, converting foreign currencies and then accepting currency back is a point in the spend management cycle that could hugely benefit any staff who travel.

Maintaining control over company money: soldo sheds light on how many employees spend when they shouldn’t

Soldo was interested to find out how many employees admitted to spending company money in situations where they were not authorised or overspending on items they should not be using company money for.

The YouGov survey found that over 10% of employees are either purposely or unknowingly spending company money when they should not. 12 in every 100 employees will either admit spending company money on items not related to the company, or they preferred not to say if they had, or did not remember if they had.

4 in every 100 employees admit that they have knowingly overspent and 8 in every 100 reported not knowing or preferring not to say. The percentage of those over-spending is at its highest for those working in Finance and Accounting (6%) and Media/Marketing/Advertising/PR & Sales (6%).

The results also show that employees are less inclined to overspend if they are working for a small company compared to those in medium and larger SMEs. Here Soldo sees a clear opportunity to eliminate any potential incidents of over-spending whilst bolstering a sense of trust and autonomy amongst employees through the distribution of intelligent spending cards.

If employees had the opportunity to spend using a company card, yet finance teams had full control over where, when and how the card was used, plus real-time access to usage, data and reporting, phenomenal gains could be made – of money and time, and in employee morale and productivity.