A global provider of total transaction management solutions, today announced the results of a study into the business expense claim process. The survey of 1000 employees across public and private sector organisations in the UK analysed how often employees file their expenses, how long they spend making claims and the value of the claims they are making.
The research revealed that 77 percent of respondents use their own personal cash or credit card to pay for business expenses, and that the average total value of the expenses claimed by an individual each month is 156.17 GBP. However, despite this, more than 50 percent of respondents do not claim for all their expenses.
“The aim of this study was to assess the efficiency of current expense claims processes and how this impacts both the employee and the employer,” said Shane Bruhns, Chief Operating Officer at Spendvision. “The results show that many employees don’t get around to claiming all their expenses – even though they often pay for things with their own money instead of company cash – because their current claims process is far too complicated and time-consuming.”
The research also demonstrated that 50 percent of employees that do make regular expense claims have to wait more than eleven days to be reimbursed, with 15 percent having to wait up to a month.
“What this shows is that too many employers are still expecting their staff to foot the bill for company expenses,” continued Bruhns. “Having to wait so long to be paid back for business-related transactions can be extremely demoralising to a workforce, especially given the harsh economic climate. While it might appear to be beneficial to organisations to delay the remittance of expenses, the inefficiency of their claims process can actually be costing them more than they save.”
Respondents cited a number of factors that cause them to not make an expense claim, including lost receipts, not having enough time to complete the claim process or simply forgetting to file expenses. The study showed that 55 percent of organisations still use a paper-based expense claim system, which is time-intensive for the employee and the administrators in the accounts department, who have to input data manually before the employee can be reimbursed.
“By doing more to streamline the expense claim process, organisations can drastically cut the cost of processing each transaction,” continued Bruhns. “What’s more, with the right payment tools in place, organisations can keep a close eye on what employees are spending – reducing the need for employees to use their own money for business expenses in the first place.”
Through automation, organisations can make it easier for employees to log expenses as they accrue, without causing extra work for staff in accounts payable. This is especially beneficial when it comes to the typically high volume of low-value transactions, which have a relatively high cost to process.
In addition, by integrating all expenses onto a single web-based platform, everything from corporate card payments to cash transactions can be easily logged and coded by the employee before being sent for approval – affording managers and the finance team better visibility and control over what is being spent.
By simplifying the claims process for employees in this way, organisations can make the end of the month expenses chore more straightforward and reimburse employees more quickly. In addition, the finance team will benefit from up-to-date, accurate information without the need to manually input data onto their system.
Overall, this study demonstrates that the benefit for organisations is threefold – an efficient expense process can reduce the cost of processing transactions, provide CFOs with greater control over spending and reduce the need for employees to pay for expenses out of their own pocket.