What CFOs think your expense tracking report says about you

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Kate Fletcher

October 28 ∙ 9 minutes read

In a move to empower individuals to make financial decisions to acquire new customers, business expenses, which have always been under company control, has slowly shifted towards employee control. Even in 2020 where businesses have found themselves scrambling to cut costs and reduce risk to preserve profitability, company leaders recognise the importance of high engagement levels on retaining a happier, more productive workforce. However, this modern shift in culture, whilst great in theory, can also make expense tracking a logistical nightmare.

Let’s face it – managing expenses can be dull and tedious. It’s not a task anyone particularly looks forward to, especially as the process can be more overwhelming than the actual expense is worth. Simply navigating the rules around going to work is a minefield today, let alone tracking what expenses can and can’t be claimed for. 

And then there’s the salespeople and customer success teams who notoriously go out of their way to avoid expenses and pile them up until it becomes unavoidable to claim them, sometimes waiting until the end of the financial year. After all, time spent on submitting expenses eats into valuable revenue-generating hours. Beyond the actual admin involved, there are also strong feelings about paying out personal expenses from your own pocket. There can be confusion around what you’re entitled to claim for, what level or class of service should be allowed and the speed of reimbursement – the list of reasons not to claim is endless. 

What’s the hang up about expense tracking?

According to the report, Out of Pocket Employees, one in four employed adults have postponed or cancelled a meeting to avoid paying expenses out of their own pocket. Not only is there the immediate impact this can have on revenue through slower sales cycles, it can also affect the way spending is approached and how it is accounted for. Not to mention the financial concerns of personal money where it can be quite confusing on what policies apply in what circumstances. 

Whatever the reasons behind failure to submit claims, tracking expenses is a key performance indicator for a company trying to monitor its cash flow and how it monitors the true cost of customer acquisition. 

As a Chief Financial Officer (CFO), effective financial management requires balancing these expenses against revenue earned, particularly to understand what the business is spending, why it is spending and what the resultant ROI is. But with expenses varying from employee travel to client lunches and much more, some can often appear indulgent to the finance teams processing them and a drain on company cash. 

As a result, today’s CFO needs instant visibility of spend by tracking expenses to ensure they know the true value of business travel expenses. This reveals a lot to CFOs about the way you, as an employee, handle expense reports and your general attitude towards company money. In fact, there has been extensive corporate and psychological research conducted on common expense reporting profiles that can have an impact on the way a business runs its finances. 

So, what does your expense tracking reveal about you?

The Nonchalant One

You’re laid back. Sometimes you’ll do expenses when you fancy it, other times you may end up submitting them all at once, all the while keeping the element of surprise with your line manager. You’re not driven by urgency. Frankly, it’s not on the top of your agenda. Those expenses will file when you get around to it. 

You’re a bit of a wild card. 

The Expenses Diva

Hey, big spender!

You don’t care what you spend. You don’t pay heed to the policies and you like pushing the boundaries of what you can and can’t expense – it all comes together if you can make it rain in sales. You’re no stranger to controversy, and feel entitled that your social status should be reflected in your role; you’re creative with the way you claim expenses.

You’re also the most likely to leave submitting expenses until the last possible moment, forgetting where, when and they were incurred. 

You are an expenses prima donna and you’re the finance team’s living nightmare.

The Martyr

You’re careful – too careful. You avoid claiming expenses and even when you’re entitled to claim back, you don’t. You want to be seen as the good employee.

You may not be a CFO’s nightmare, but you’re also not on top of the list for Employee of the Month. You make it hard to track what expenses have accumulated on customer acquisition and projects. You keep your expenses cards close to your chest.

You’re a bit of a martyr, my friend. 

The Worrier

You’re a worrier. You are always unsure of what you can and can’t claim for. You worry about every submission; you check in with your manager – a lot. You um and ah about submitting expenses so much that it sends you spiralling and in that process, you provide an essay about why each expense is being submitted. You want to avoid awkward conversations about why you expensed certain items, such as a coffee.

You always err on the side of caution. 

The CFO’s Dream

You’re the responsible one. You treat your company’s money like your own and are mindful of why you spend it. You make the right claims when necessary and you take the time and effort to track and file expenses through the right channels and submit them on time, with the receipts to back it up. You’re not only sensible with the way you spend, you’re also extremely transparent and file all your expenses within your company’s expense tracker app to make sure everything is accounted for. 

You’re at the top of every CFO’s good list.

Expense tracker apps can solve reporting issues

Due to the various personalities at play when it comes to expense tracking, companies can be presented with huge challenges on how to maintain visibility of future forecasts and sales projections. If there are employees who either spend too much or spend too little and those who refuse to submit expenses at all, there is very little analytical data businesses’ can work with to understand how much profit each client actually brings in. There is also the glaring problem of fraud. 

Expense fraud and errors 

No CFO wants to mistrust employees, but most fraud occurs in procurement, payment and expense transactions. Apart from setting up ethical policies in place, an organisation needs clarity on any potential misuse of company funds and how it impacts business growth. 

One of the biggest issues, which a tracking app can readily address, is employee error, such as accidentally submitting an expense twice. It can also be used to monitor fraudulent activity. Deliberate fraud and abuse can be detected early with the proper systems and checks in place.

In a business that has numerous departments that submit expense reports for travel, dinners, hotel stays and so on, the task of implementing an all-encompassing solution to automatically monitor for red flags can seem incredibly daunting. However, in a report for CFOs it was highlighted that using the right expense management tools and expense tracker can flag inappropriate items on an expense report, whether the error is unintentional or deliberate. 

By leveraging such technology, finance teams can identify items that require further review before they escalate into a problem. It’s also a sure fire way to ensure that the expense process is slick and smooth and doesn’t eat into valuable billing hours, whilst keeping a tab on your ROI. 

Analysing your expenses against ROI

An expense tracker app should also be able to track expenses and monitor associated revenue generated as a result. It should be able to import transactions from personal accounts, mobile wallets and corporate credit cards. It should give a clear image of how much you as an employee are spending on each client and whether there is a disparity in the ROI. 

Most apps make the process seamless and enable you to capture all your receipts quickly and easily, but it’s the ability to automatically populate important expense data and the business purpose from the receipt that’s key. Expense tracking should be extremely efficient, and the apps that process expenses in your company’s existing CRM system, means you can file and submit against the relevant sales opportunities, customer accounts, marketing campaigns in seconds, without the hassle of additional admin to state what the expense was for and why. 

Expense outcomes ultimately sit with the CFO

CFOs and their financial teams consistently walk the line in trying to empower financial decisions and rein them in. The best CFOs see the risks and opportunities behind the numbers, but empower their people all whilst acting as a strategic business partner to the CEO. 

As Ross Woledge, Odgers Berndtson Executive Search Canada, puts it: “CFOs are held to a higher standard than anyone in the company – even more than the CEO. It is a privileged position given the ability to have a powerful impact on the direction of the business, but it is increasingly challenging given the increasing remit of the role and CFOs being pulled in so many different directions.”

Alongside all this, however, modern CFOs must also understand how to get the most out of digital investment and analyse real-time data that’s presented to them in different forms. Expense tracking is only one of the areas that modern CFOs need to grapple with but it’s also an area that’s historically lacked real-time insight. Which is why, how you as an employee approach expense reporting and tracking can be the difference between a CFO dictating expense autonomy or an expenses policy. 

Why expenses autonomy matters

A vital part of employee engagement is the autonomy to be yourself in your role and work at your own pace. How you interact with customers shouldn’t be limited by what you can and can’t spend on them. Your approach as a team member or sales representative towards expense reporting and submission can have a huge impact on the way company policies are made and how cash flows – without hindering your ability to travel and build relationships with clients. 

Which is where an expense reporting solution such as a tracker app can add huge amounts of analytical value for senior management and teams alike. And you never know, you might just go from being The Expenses Diva to The CFO’s Dream.

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Kate Fletcher

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