From the first thought of filling out an expense report to running through for any mistakes, studies show that expense reporting and management can cause the greatest challenge to a company in terms of time and money.
That’s why we’ve put together the common expense problems and how to avoid them.
Out of pocket claims for company expenses
Asking employees to pay on behalf of the company for minor expenses is the easiest solution for small businesses but it can sometimes, especially for large or reoccurring purchases, be unfair to ask employees to always pay. Unsurprisingly, over two thirds (69%) of workers consider themselves as being left out of pocket by their employer due to out of pocket expenses. Over half (51%) have had to put expenses on a personal credit card or go into overdraft due to expenses, incurring personal debt in order to facilitate costs for the business. Read more about Expense Economy impact research that was conducted for Expend here.
Struggling to keep track of expense receipts
Keeping receipts can be a pain for everyone including businesses and employees because of the processes and paperwork involved. On the other hand, the accounting team often faces challenges due to the lack of visibility and clear viewing of spending, ultimately leading to mismanagement of company budgets. Since expense receipts are very important for proof of purchase, Expend has made it easier for employees to manage- they just have to capture the receipt and send it for approval within seconds, while the spending is recorded automatically.
Inefficient manual expense reports
Depending on the system, the processes used and the number of expenses, employees can easily spend an hour or more on expense reporting. When you consider the average hourly wage within your company, the cost could easily be £20-25+. That’s also before you take into account what they could be doing instead.
It is also a pressure for businesses to finish checking them on time with hundreds of submissions from each employee. Approvals usually take longer if the company is big or the stages are complex.
With the help of Expend’s, automated expense management solution, you will be in control of every aspect of the company spending cycle. Expend now also supports Xero bank feeds, which automatically import transactions from your bank or financial institution directly into your Xero accounting platform, eliminating the need to import transactions manually. Learn more about how Expend’s features can help you here. Expend is also the first business prepaid card and expense management solution on the QuickBooks app marketplace in the UK.
Unclear expense policies for employees
Companies set policies to avoid expense abuse, but this can sometimes be complicated and difficult to understand. Employees tend to forget, especially when they have many targets to reach and are busy with their day-to-day responsibilities.
Employees should be able to quickly pull up the relevant policies and information to avoid ending up in a situation where they’re under suspicion of padding their reports. In many cases, they simply lack the data necessary to make an informed decision.
If you and your company are facing issues with expense management, you’re not alone, learn how Rock Rose Gin solved theirs.