Four Tips for Managing an Effective Company Expenses Policy
Although many of us will act with honesty when it comes to company expenses, recent research conducted by webexpenses suggests that fraudulent behaviour is still taking place in many UK offices. webexpenses’ latest research shows that a quarter of UK office workers confess to making false expense claims at work –claiming back more than they are entitled to on company expenses.
The National Fraud Authority has also raised concerns on the issue, reporting that businesses lose in excess of £100 million every year as a result of employees exaggerating and falsifying claims.
With this in mind, it’s time companies started taking back control of their expenses by developing and enforcing a robust policy which will support the reversal of complacent and misguided attitudes to the issue.
Michael Richards, Chairman of webexpenses, shares his top tips for business leaders as to how they can create such a policy.
Create a fair policy
To ensure the task of expenses processing runs smoothly within an organisation, it’s important to have a system in place which is both fair and transparent for employees. When respondents to our survey were asked for their views on the way their employer handled expenses, many commented they thought they were handled unfairly and stacked in favour of the company’s interests over the workers’.
It is this perception of unfairness which is commonly used to justify expenses fraud. It is how employees, who normally consider themselves as law-abiding citizens, can ‘legitimise’ the act of fiddling their expenses. Without a fair system of compensation, organisations leave themselves open to the risk of becoming breeding grounds for low morale, discontentment and exaggerated claims.
Keep it simple
The process of expenses must be made less of a chore in order to promote compliance among a small workforce. With the introduction of digital advances such as smartphone apps, employees are able to effortlessly upload receipts into a digital form, ultimately making the process a lot easier for all people to manage and adhere to. The policy guidelines should also be clearly written in a language that all employees can understand.
An expenses management system such as webexpenses, strives to make the process as easy and simple as possible for users. We’ve just launched a brand new user interface, providing an even more user-friendly experience, as well as a whole raft of new features and functionality. It’s the result of months of hard work following valuable feedback from our clients to make the expenses process as simple as it can possibly be.
Keep it up to date
The feedback from our survey created a picture of organisations with outdated expense management systems – a nest for fraudulent claims. Most telling was the fact that 47% of employees said their company had not yet implemented an expenses management system.
Many organisations create a policy and then forget about it, but senior managers must develop an effective policy which is organic. It should be revised every few months to take into account price inflation, legislation updates and technological advances. For example, we all know that fluctuations in fuel prices are a common occurrence, so it’s important to ensure that rates and allowances for travel – including mileage and fuel allowances – are kept up to date.
Choose the right software
Digital expense management systems can be used to minimise expenses abuse. This includes the automation of expenses processes, and the use of technologies which allow companies to monitor expenses in real time. In the past, this was a slow and inefficient process of spreadsheets, forms and piles of paper receipts. Now, powerful digital systems have revolutionised the way expenses are managed.
Another major advantage of these systems is that they produce a rich set of data – helping FDs and CFOs to keep a closer eye on expense spending and tracking. An automated system takes the emphasis away from the grind of processing expenses and lets finance teams focus more on analysing and monitoring the data.
With a greater understanding of the nature of expenses fraud, this information can help identify trends and spot potential policy breaches. A handy, new feature in our webexpenses’ software is that any duplicate or abnormal claims are automatically flagged in the system so approvers don’t have to spend as much time verifying claims for approval.
Like what you see! Signup for our weekly newsletter