If you’re a business owner, it’s essential to manage expenses correctly – not just to make sure that employees aren’t spending money that they shouldn’t be, but perhaps more importantly, to become more financially aware, encourage transparency and autonomy, and improve reporting processes.
We surveyed 2,500 British employees to explore the current state of business expenses. As it turns out, staff wrongly file expenses more often than you’d probably think. At the same time, however, we found that many employees do not even claim back for some items that they pay for using their own money.
There is a clear need for employees to feel comfortable with spending company money in accordance with established rules and procedures – but also to trust that the organisation they work for will not leave them feeling out of pocket.
In our report, which you can download for free, we spoke to a renowned business psychologist, Dr. Lynda Shaw, who analysed some of the survey findings to determine different ‘types’ of company spenders that may exist within your organisation.
The report also explains a smarter approach to spend management – one centred around simplicity, efficiency, and control. Here’s a quick look at some of the highlights:
How employees treat expenses
Over a third (38%) admitted to wrongly filing expenses. On average, our respondents incorrectly claim £117 a month – which amounts to £1.9 billion per year on a national scale.
The most common spending habits employees admitted to included petrol for miles that they hadn’t actually driven (27%), followed by office supplies that they kept for themselves (20%), and altering taxi receipts so that the fare was higher (16%).
With that in mind, it’s not totally surprising that most (65%) say that are more willing to use a company card under certain circumstances, including:
· When they think the purchase will benefit the company (cited by 33%);
· If they’re out at a party or event, at a work social, or entertaining clients (17%)
· If they don’t think they can afford to pay out of their own pocket (17%).
However, nearly half (49%) say they take the same precautions when using a company card as they would with their own money, and avoid unnecessary spending.
Employees said they would spend less on a company card:
· If the company strictly enforced its expenses policy (cited by 24%)
· If they think they can afford to pay for the items themselves (22%)
· If one of their colleagues has already been punished for fiddling expenses (19%).
Even amongst those who are comfortable spending on a company card, the majority (63%) said they are scared of breaching their company’s expenses policy.
And most claim to actually be owed money from their employer. Over half (57%) believe they are out of pocket for work items that they have bought on a personal card – largely due to lost receipts and paying out for small purchases like stamps and bus fares.
The smart solution to spend management
Let’s be honest: submitting expenses via Excel and filing paper receipts until monthly expenses day is archaic. Staff shouldn’t have to spend their own money for the sake of the business.
If finance teams exercise greater control over where, when, and how employees use company cards – and spend company money in general – costs, morale, and productivity will significantly increase.
Having a good relationship and trusting your staff is a great way to start, but giving them a card that you can control is even better. That way, you can empower your staff whilst keeping on top of expenses, before they become an expensive problem.
Balancing control and autonomy is hard. We know that you want to free up your finance teams to concentrate on more strategic areas of driving a business forward, whilst letting staff spend company money wisely. But that’s easier said than done.
Soldo is a multi-user spending account, complete with Mastercard® cards, intuitive admin and effortless reporting. It simplifies the entire business expense cycle, from beginning to end. You can set limits on spending, access spending reports in real time and have different cards for different employees. It really can be that simple, and is perfect for businesses of all sizes.
You can find out more about the expense habits of UK companies in our latest report, available to download now.
If you’d like to register you company with Soldo for a free trial, you can do it online today.