3 Ways Technology Can Help You Change Employee Expense Behaviour
Submitting expenses is a common, if not tedious, part of working life. From claiming mileage to expensing a flight to see a client, sorting and submitting expenses is an administrative task that often bogs workers down. And, while HR departments are working hard to improve the employee experience in areas such as flexible working and reward and recognition, expense claims – at least for the majority – are still creating widespread frustration and dissatisfaction.
So why has there typically been so much admin involved with what should be a straightforward reimbursement for monies owed? Sadly, that comes down to bad experiences – this time for the business, not the employee. Expense fraud happens. Sometimes it’s deliberate but often it’s accidental too.
To set the scene, here’s a quick round-up of some of the worst examples – and unfortunately, rather than getting found out, these were actually paid out:
Married to the workplace
Many people often joke that they are married to their work, but one employee took it too far when he tried to expense an engagement ring to his organization. Feeling married to your work is one thing, expensing a diamond ring on the company is quite another.
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Expensing meals during work trips is common practice, but when an employee claimed for a Domino’s Pizza delivery on Christmas Day, did they really think it was acceptable to claim this festive gift from their employer?
Dogs are known as man’s best friend, but one employee took this to a new level when they tried to claim £700 worth of vet’s bills. Unless it’s a loveable office dog, this is a paw example of expense abuse.
Billing back your personal mobile bill when you have a company phone should ring alarm bells, but this caller got his £500 call costs reimbursed when he called them in.
You might be typing hard all day at your laptop, but does that entitle you to expense back your manicure? One employee recharged hers to the company.
These are unbelievable examples, but sadly they are not as uncommon as most people would assume. With traditional business travel and expense processes, it is all too easy to commit fraud, but exceedingly difficult to detect it. In fact, every year, businesses lose millions in the claim game:
In the UK alone, one in 10 employees admits to submitting erroneous claims ‘all the time’, while a further one in 4 does so ‘irregularly’. The most common issues involve exaggerating mileage (27%), buying office supplies and keeping them for personal use (20%) and altering taxi receipts to claim a higher fare (16%). Such activity is estimated to cost UK business around 2 billion GBP a year.
So, how can over-stretched HR and Finance teams, who don’t have the time to scour every expense claim for anomalies, manage employee expenses in a smarter way that saves them time, and importantly, money?
1. Link expense claims to tangible business outcomes
Empowering your employees to make better decisions about spending money (for the good of the business) means linking their spend to a specific activity. This doesn’t just mean asking them to submit an explanation of what the spend is for when submitting a claim.
Consider refining your expense management process to ensure that employees submit claims alongside dynamic customer and project data. If the business class flight eats into the profitability of a sales rep’s deal, they’re likely to opt for the economy flight or reconsider the need for a Michelin star meal. Employees will start to spend money as if it were their own.
2. Facilitate expense management in real-time rather than once a month
We’re all guilty of it. Hoarding expenses until the end of the month or until we get a quiet Friday. Both employees and managers are so fatigued with expense management that they leave it until the last minute to process them. In fact, one global accounting firm I recently spoke to requires employees to take photos of receipts, send them to their relevant PA, who then proceeds to print them out, reconcile and send off in a paper envelope to a service center in a different country. When submitting a receipt is this difficult, it’s no wonder employees are avoiding it for as long as possible.
Expense management that can be done in real-time, on the move, and with ease, will go a long way to removing this ‘expense fatigue’ and will ensure that submitting and approving claims is just as much a part of the daily working routine as checking your emails is. It also means there’s no time to get ‘creative’ with expenses.
3. And if the above fails, leverage AI-driven technologies to combat fraud
Travel and expense management technologies that leverage AI are already helping to detect and flag duplicate and/or dubious claims, improving efficiency and accuracy. But to really unlock the financial value of behavioral change, it’s those technologies that use this information in the context of wider business activity—such as the data recorded in CRM systems—that are really helping today’s tech-savvy organizations.
With the business purpose clear to see, the everyday and mundane expenses that make up the majority of claims are being reimbursed almost instantly. This creates long-term time-savings for HR and Finance teams who can turn their attention to more strategic business matters. Crucially, it also delivers a better ongoing experience for employees – something that is increasingly vital in today’s environment where retaining employees is critical to overall business growth.