The Hidden Cost of The Expenses Economy
Expend was born out of the frustration and time taken to do expenses, and back then the goal was to make company expenses easy. It's now half way through 2018, and we still have countless conversations everyday in our working and personal lives about the annoyance of expenses.
So we decided it was about time we went beyond the trends we were finding and do some wider research into the true state of ‘The Expenses Economy’ in the UK. The focus of this research was mainly on employees that had to file their expenses and the variety of problems that they face day to day. Why? Because expenses can be a prickly subject and one that employees will often complain about to their co-workers, but rarely to their management.
Regardless of whether employees are simply ‘lazy’, don’t have the right tools, the relevant training or the time. When employees are given the ‘choice’ between hitting a tight deadline, trying to reach sales targets or filing their out of pocket expenses, it's likely that many will unselfishly push the latter back. Leaving them out of pocket for longer, putting pressure on their own finances and often those of their friends and family. It also leaves business unaware of their expenses related financial obligations.
39% of respondents have had to wait over two weeks for reimbursement. With 21% waiting at least a month.
Hats off to the 3.2% that get reimbursed the same day, you're in a very exclusive club.
On the other side of the coin: “Many companies have wised up to general expenses abuse. They ask that you use your own personal card and claim it back later according to a set of guidelines so complex it makes Brexit negotiations look like child’s play. And guess what — these rules seldom apply to the boss. According to a recent survey by Expend, nearly one-third of UK employees have had to ask family or friends for cash because their expenses had to be put on a personal card, with one in five having to wait over a month to be repaid.” Financial Times (subscription required)
Rich People’s Problems: The trouble with expenses claims https://t.co/k53KCb2YvF— FT Westminster (@ftwestminster) June 28, 2018
So with over 51% of employees having to use their personal credit card or overdraft to pay for company expenses, the potential for overdraft fees and interest eating into their take home pay is a real and chilling possibility, especially for those that are struggling to save for a deposit for their own home.
As Johnny Vowles our expenses admin busting CEO and co-founder said recently in Global Banking and Finance Review
“This research had some frankly shocking findings highlighting the scale of the expenses charade in the UK. It’s simply unacceptable that workers have to borrow money from family and friends or go into their credit cards or overdrafts to float their company’s expenses. We certainly don’t think businesses do it intentionally as a cash flow solution, but the problem does exist.”
In short ‘because it’s always been done that way’, simply isn’t an answer or an excuse anymore.
Expenses don't just impact employees bank balance.
Nearly 1 in 5 employees (19%) would feel more satisfied and motivated if expenses did not come out of their pocket.
We live in a world where management seemingly wants everything done by the end of the month, whether it be create reports, finalise projects, close sales, do routine admin etc. These artificially created deadlines develop into pinch points for employees and frustration for those who have to administer them. Pinch points create a rushes to complete and with rushes come errors, which ultimately takes even more time to get right.
Sadly many employees and companies don't have the right tools to do this efficiency or only solve part of the problem. Technology like Expend’s class-leading expenses solution is already taking the pain out of expenses management for employees and businesses across the UK. If you're not one of them, you should give it a try.
Download a copy of our Expenses Economy Report today.
Written by Adam Clarke
I'm the Marketing and Partnership Manager at Expend. When I'm not fighting expenses admin with our amazing solution, you can find me eating my way around London's food scene.