Risky businessIt creates an organisational blindspot, one which helps to explain why so many expenses policies are clearly failing to protect businesses; why UK companies are continuing to lose around £100m each year to false and exaggerated claims. Companies are also facing the increased risks of external compliance breaches, whether it’s with HMRC or business legislation such as the 2010 Bribery Act. The potential outcomes are prosecution, fines and even imprisonment. But digital technology has provided a fresh approach to managing and maintaining an expenses policy. It takes that old static document and allows it to become a ‘living, breathing’ part of an employee’s everyday workflow. By switching to digital expenses management, claimants, approvers and finance teams are able to manage and monitor expenses in real-tíme. The systems allow the setting of automated limits, triggers and controls to reflect company policy. When an employee makes a claim, the system applies the company’s rules. It can prevent a claim from being made, or provide an on-screen notification or silently alert an account handler – or any combination of these actions. This use of triggers and notifications provides visibility at the point of entry, transforming an expenses policy from being passively to actively managed. Problems are flagged instantly, rather than having to rely on them being spotted by a finance team weeks later. It also means that any policy changes can be made in a matter of minutes – irrespective of how large or complex an organisation may be. In the past, it could take months for knowledge to filter down to employees.
Fighting fraudWith fast automated processing of claims, a digital expenses management system also allows the focus for finance teams to shift from processing to managing. They have the tools and the time to properly maintain rules and regulations; to root out the type of fraudulent claims that went unchallenged with paper-based systems. On average, an organisation switching from paper-based to digital expenses management can expect a 25 per cent increase in processing speeds and a ten per cent reduction in expenses spend. Alongside these bottom-line savings, a digital system can create an attitudinal shift. Rather than an expenses policy being viewed as something oppressive, something imposed from above, it becomes a much more natural and organic part of business life. It allows an organisation to start detoxifying expenses, moving away from the old perceptions of them as some kind of battleground on which employers and employees wage a war of attrition. To achieve this requires a change of mindset from both sides. For business leaders, who now have the the tools to effectively manage and control an expenses policy, it opens the way for a more nuanced approach. It can feel counterintuitive but the more stringent a policy is, the less effective it may be. A 2014 survey by Censuswide found that 43 percent of employees felt that a company expenses policy they viewed as unfair was justification for making fraudulent claims. It doesn’t mean that policies need to be ‘soft’ but they should reflect a less combative approach. We now have the tools to ensure that an expenses policy does what it was originally intended for – a fair way to reimburse employees who pay business costs out of their own pocket. Webexpenses provides a smarter way to manage your employee expenses. Find out more here.
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