Digital War On Business Waste

By Author: Web Expenses
Total Articles: 8
Comment this article

Something is deeply wrong at the heart of company finance systems. That is the unsettling implication of a series of studies which paint a picture of embarrassing loopholes in employee expenses rules, unchecked claims, finance departments using outdated processes to wade through mountains of data, and widespread fraud and waste.

We now know that a quarter of all employees admit to making exaggerated claims, while Deloitte found that widespread expenses fraud is costing UK businesses in excess of £1.3 billion a year. Yet this could be the tip of the iceberg, as many companies admit to checking less than 2% of expenses claims. Even worse, a quarter of SME’s say they would not be confident if compelled to account for their employees expenses to HMRC. And this despite the fact over half of all SME’s devote more time to processing employee expenses claims than to generating new business.

Many businesses attempt to combat spiraling claims, by pre-planning employee trips on company cards. But even this fails to stop the ...
... dizzying array of extra claims. From rounding up trips, to generous, mystery tips, unexpected out-of-pocket extras, and shock receipts, there is an extensive list of employee expenses tricks. The mileage audit and fuel travel cost company, TMC, estimates drivers inflate the cost of business journeys by up to 25%.

Increases to overseas travel for employees in a globalised business arena, coupled with changes to the travel sector, mean that many companies are leaking money. For example, opportunities to obtain hefty discounts with travel firms for bulk bookings or long-term custom, are frequently missed as businesses fail to keep track of expenditure across the business. Travel companies frequently conceal costs by unbundling deals, leaving travel bookers unaware of potential extra expenditure.

A significant proportion of companies still manually file data in hard copies, increasing the risk of lost records. Maintaining the necessary paper trail to ensure compliance, when complex claims are submitted across multiple currencies, is impossible for many finance departments.

Because many firms rely on employees to submit accompanying evidence alongside expenses claims without policy reminders, employees are often unaware they may be making a false claim. This could explain why at least 9% of expenses claims are errors.

In an environmentally-conscious age, the increasing number of fraudulent travel claims also means that businesses cannot place any concrete figure on their globe-trotting employee’s carbon footprint.

In today’s economic climate, out-of-control expenses mean that finance departments are losing credibility with employees, companies lack the confidence or evidence to defend themselves against dubious claims and many have to justify cutting jobs instead of T& E budgets.

The good news is that we know from the research that it doesn’t have to be this way. By switching from red-tape to automated expenses-management systems, the Aberdeen Group reckons companies can slash their admin costs by over 50%. Interestingly, this also increases compliance by as much as 30%, as companies can conduct best-practice audits, and instantly reimburse employees.

Next generation cloud-computing solutions are changing the way companies think about expenses-management. The latest software can populate directly from corporate-credit cards to company accounts, and use advanced mapping techniques to accurately gauge mileage and carbon footprint, giving companies unprecedented control over costs, by providing an instantly-available, crystal-clear portal into their finances.

And now, as mobile devices herald the decline of the PC, new smart-phone apps, the latest weapon in the war on waste, are giving employees the ability to submit claims and evidence on the move, and enabling companies to monitor claims in real-time from anywhere, reimburse employees instantly, conduct excellent audits, and swiftly spot emerging trends and inconsistencies in spending and block inaccurate claims, by issuing policy warnings, to eliminate errors.

The latest software reduces processing costs by up to 50%. When human-capital management giant Spring Group trialled WebExpenses, the award-winning provider of web based expense solutions, the results were so dramatic that it was swiftly rolled out across their global operation. WebExpenses now supplies in excess of 300 companies with cloud-computing expenses solutions, in over 60 countries.

Automated expenses-systems like WebExpenses cannot eradicate fraud: ultimately every technology depends upon a degree of trust in its users. But it offers companies a golden opportunity to cut waste and restore probity to finances, while restoring employees trust in the system.