Managing finances is a time-consuming issue for UK SMEs. Not least because the current process for company expenses – holding on to receipts, filling in excel sheets and matching up the numbers afterwards – is outdated and archaic. In this situation, nobody wins. Employees are often out of pocket as they use their own money to pay for smaller items that they then lose receipts for, businesses lose money by not staying on top of the expenses that come through, and the finance team has to wade through mounds of receipts at the end of each month. There has to be a smarter way.
To get an idea of what employees think about their current expenses systems, how often they have to claim expenses and what they are claiming for, we surveyed 2,500 people in full-time work across the UK – and the results were telling. Over a third (38%) admitted to claiming for things that they shouldn’t, with 5% saying that they submit false or altered claims frequently. On average, they put through £117 worth of fraudulent claims each month. That amounts to £1,404 over the course of a year, which tots up to a staggering £1.9 billion nationwide. On the flip side, over half (57%) believe they are actually out of pocket for work items and are owed money by their company – largely due to lost receipts, and paying out for small purchases like stamps and bus fares.
So, it’s safe to say that there’s a problem here. At the risk of being a snitch, it’s important to know what most of them are falsely claiming for so that you can keep an eye out. Mileage (not) driven (27%) comes first – followed by office supplies that employees keep for themselves (20%), a round of drinks at the pub (20%), and altering taxi receipts so that the fare is higher (16%). Others admitted to expensing meals out with family/friends (16%) and buying laptops/phones/tablets for their kids or family members (12%).
So, what does this mean for expense management moving forwards? Does it mean spending even more time going through expense claims with a fine-tooth comb? Our respondents’ answers suggest otherwise. The majority (65%) said that they are comfortable using a company card and most think they would spend less on a company card if the company strictly enforced their expenses policy (24%). This suggests that having a good relationship and trusting your staff with a card that you can control is the preferred approach. That way, you can empower your staff whilst keeping on top of expenses before they become an expensive problem, and finance don’t have to waste time rummaging through receipts. Everybody wins.
Yes, our research confirms that staff manipulate expenses more often than you’d think, and that’s wrong. But their reasons for doing so are normally legitimate and, more often than not, they’re not even claiming back for the smaller things that they’re entitled to, because keeping hold of receipts takes too much effort. And they’re right – managing expenses via Excel and keeping receipts is archaic. There must be a smarter way.
Soldo Business 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.
Employees pay with their Soldo cards and expense reports are generated automatically. You can customise everything from budgets to spending limits and permissions. Each intelligent spending card is personalised with the employee’s name or dedicated to a specific department.
It makes managing expenses pain free – for everyone involved. Find out more about Soldo and check how it can work for your company at www.soldo.com