Why Is Workplace Expense Management So Painful?

We welcome this post from Rodolphe Ardant, CEO and co-founder Spendesk

These days, there’s no limit to the range of innovative technologies available to help workplaces operate flexibly and efficiently. Cloud storage and online collaboration tools empower teams to work together from anywhere, and there are countless other new tools improving outdated ways of working. When it comes to corporate expenses, there is no reason why employees shouldn’t demand the same ease of payment they enjoy in their private lives. Neither is there a good reason why they should be digging into their own pockets to pay for work expenses, and then waiting four to six weeks to be repaid.

Yet, our experience tells us that is exactly what is happening in hundreds of organisations up and down the country. Antiquated, often manual and paper-based methods of expense processing, receipt collection, verification, and funds transfer are still being used.

As employees, freelancers, or managers, the amount of goods we buy for work is increasing; it’s not as simple as travel, subsistence or stationery expenses anymore, we can also be tasked with buying the likes of office equipment, subscriptions or even software licences. Yet the reimbursement process for these purchases has not kept up with this pace, and is often slow and resource-intensive. Take subsistence for example. We’ve all been there: you’re travelling for work and you need to grab a sandwich. So you tuck your receipt away for safekeeping, dust off your company’s expense policy to check your allowance, fill out a form for reimbursement later in the week or month, and, assuming you can find the receipt, send it all to your manager. All that time and hassle will definitely outweigh the satisfaction of whatever sandwich you ate.

These traditional expense claim processes also involve a great deal of hidden costs for companies. On average, it takes a company 30 days to process a single expense claim, including approximately 50 minutes of employee time. This single claim will end up absorbing the equivalent of €27 in employee wages, or €500 per month for a company of around 100 employees. Over time, this adds up to an expensive headache.

And it’s not just money that it’s costing us, it also wastes valuable time -- for the employee making the claim, for the manager reviewing and approving the paperwork, and for the finance team reviewing and approving the reimbursement.

So businesses need a smarter way to manage workplace expenses. One which:

  1. Allows for flexible and convenient ways for employees to pay for things
  2. Makes it easier for employees to collect and send proofs of purchase
  3. Ensures a strong focus on security and predictability

Let’s tackle each of these one-by-one.

More flexible payments: rather than asking employees to pay for things themselves and wait for reimbursement, businesses should look for ways to pre-authorise purchases from the start. If employees have access to flexible options for workplace spending, this can save time and money for the business, avoiding the inconvenience of collecting and submitting documents, and freeing up employees to dedicate themselves to more important work.

Easier ways to collect proof of purchase: businesses also need a way to make it easier for employees to capture and record receipt information and send this to management and finance, without having to retain physical receipts. With the prevalence of smartphone technology, no-one should have to worry about retaining physical documents anymore.

Businesses also need a way to automatically scan receipts for relevant information, and input this information into forms for processing. This saves time, avoids the downsides of paper forms, and helps the business to stay ready for potential audit in the future.

Increased security and predictability: rather than having the different expense claim steps spread between different staff, businesses need a way to integrate processes in one place, where managers and finance can gain a point-in-time view over company expenses.

Good expense management software will do all of this, so time can be put to better use, allowing staff to do more of what they like most. It’s time our expense management processes caught up with the rest of the world.

 

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