Hands up if you love filling in expense claim forms. Anybody?
It’s an unusual employee that relishes the prospect of locating and scanning receipts, navigating the myriad of paper or digital forms that employers mandate in order to reclaim expenses. Along the way, they’ll need to refer to fine print in the company policy to check how and what exactly they can claim for. A poor or ill-informed choice can mean no reimbursement. Mistakes in the form, such as mis-coding, can lead to the entire claim being rejected.
Claiming expenses isn’t a fun job for anyone
Small wonder that some employees put it off for weeks or months, despite the fact that they’re out of pocket in the meantime – effectively they’re giving their employer a credit line.
The trouble is that many people don’t have the slack in their personal finances to be able to carry hundreds or even thousands of pounds worth of spending just to do their day job. Gritting their teeth, they tackle the expense process and finally send their form off through the expense management process for approval, so they can get what they’re owed back into their bank account.
In fact, according to a survey of US workers by virtual payment provider Conferma, over a third of respondents have to wait more than two weeks to receive the reimbursement they’re due, even if they’ve completed a claim form correctly and within the corporate expense policy. If you think that most expense claims are submitted via a monthly form, this could mean employees are waiting up to 6 weeks for their money back.
It’s estimated that 38% of all employees pay for business expenses out of their own pocket at least once a month; the average individual claim is over $100; 40% of expenses claimants have experienced cashflow issues because of slow repayments from the employer; and younger employees tend to feel more stressed about this.
Why does it take so long to pay employees back money they’re legitimately owed?
Well-managed businesses want to provide superior workforce experiences for their people, but they also have a responsibility to protect their assets and spot fraud with a rigorous expense management and reporting process. That means checking amounts, suppliers and reasons carefully, typically with two or more levels of sign-off required, depending on the amount and type of spending.
Queries need to go back to the claimant and then repeat the approval process. There may be disagreements that need escalation. An authorising manager may not be immediately available because of workload, illness or leave. Suddenly, a fortnight’s delay doesn’t sound so unbelievable. Meanwhile, the employee is feeling anxious and probably also aggrieved about the money they’ve temporarily lost.
If that’s a situation that recurs month after month, with no improvement in the process or speed of payment, it’s easy to see how slow expense repayment can contribute to a poor workforce experience and impact employee attrition in the long run. In today’s digital society, manual processing feels intolerably sluggish. Employees begin to question whether their employer has any understanding of their needs.
Bad expense management erodes employee experience and financial wellbeing
Ultimately, the lack of responsiveness can feel like a symptom of a company culture that doesn’t respect employees or place any value on their experiences. For all employees – but perhaps particularly for the generation that’s grown up with a digital, always-on, mobile-enabled existence – it’s hard to understand why it’s such a slow process. It feels obstructive when an employer makes it so hard to claim back business expenses that the individual has incurred essentially as an act of goodwill, to spare the employer having to provide and manage a corporate credit card or cash advance.
The impact on financial wellness must also not go ignored. Gethin Nadin is award-winning author of ‘A World of Good: Lessons From Around the World in Improving the Employee Experience’. Gethin has helped some of the world’s largest and most recognisable brands to improve their workplaces for the better and believes companies have a responsibility for not just employee wellness but their financial wellness too.
“Financial wellbeing starts with making sure you, as an employer, aren’t putting unnecessary financial pressure on your staff.”
“With more than half of UK employees having less than £100 in savings, employers must realise the delicate relationship most employees have with their money. Small pressures on their everyday expenditure such as expense management can have a big impact.”
So, when poor expense management and late reimbursement causes anxiety and even personal hardship, you can see why some employees might actively avoid business trips or activities that they’d have to pay for and reclaim, potentially constraining business growth.
What would happen to your revenue if your best sales reps declined to travel to client sites for sales meetings or refused to book a trip by air to see a prospective customer? That’s always assuming they haven’t already resigned and moved to a competitor with a better employer reputation and a hassle-free claim process.
With a travel and expenses management system that’s linked to your customer and revenue data such as that held in your CRM, you can make expense claims painless and transparent for employees and streamline approvals without compromising compliance. With the business purpose already clear to see, expense submission takes seconds and is done on the go with no need to revisit the claim ever again. For finance teams, real-time expense reporting is available at the click of a button.
In a competitive employment market, can you afford the risk of losing staff and compromising business growth because of slow expense management?