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Shortcomings in expense report management

Expense management timer 3 min.
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The consultancy Sales Cloud Team has conducted a thorough and comprehensive study into employees’ travel expense management and some of its results are extremely clear and revealing. By way of summary, the conclusion demonstrates: clearly inefficient management, cases of fraud and the perception that there is a need (albeit not a priority) for improvements in this respect.

Key points of the study

It we sketch out an imaginary line that connects the main points that can be concluded from this research, it would certainly include the following aspects:

- The vast majority of companies (around 90%) have at least one employee who needs to draft expense notes related to mobility matters. The professional groups that are most highly represented in this figure are salespeople, consultants and technicians, among others.

- More than half of companies (55%) only manage these expense reports in paper format, in a process that the people in charge themselves consider to be inefficient and time-consuming.

- There is a significant amount of fraud in relation to this type of expense. Supervision of such expenses is not automated and, in addition, the process is ineffective, complex and expensive for the company.

- Reimbursements of expenses, as a result of the ineffective system, are too slow, taking up to 11 days for payments to be made on average, or even as long as 30 days in some cases. This situation causes more than a little inconvenience and annoyance for employees.

Costs for bad management

As well as other negative aspects, such as demotivation, bad atmosphere or mistrust among the different members of the company, ineffective management of expense reports ends up generating a set of costs and extra charges for companies.

The present study has highlighted the following costs, among others:

- The volume of expenses in this respect is around €300 per employee per month on average. This means that, in a company with 20 employees that need to travel in the course of their work, the annual expenditure reaches around €72,000.

- Fraud accounts for an average of €15 per month, primarily in mileage calculations.

- 4% of employees exaggerate their mobility expenses by between €50 and €100.

- Drafting a non-automated monthly expense report (which is how things are done in most companies) requires an investment of at least one hour per month for each employee. In annual terms, this is equivalent to 240 hours for a company with 20 employees who travel.

Improving efficiency in expense report management: desirable, yes, priority, no.

The response to certain questions included in this research reveal that company managers are fully aware of two things:

- The issue of travel expenses is extremely important, both in terms of direct costs and workload. As such, it is well worth managing these expenses effectively.

- In general, the management system currently in place is inefficient and can clearly be improved.

Nevertheless, improving these processes is not considered a priority due to the reductions in investments or increasing costs faced by most companies since the start of the recession, as well as because of a lack of awareness of automated services such as Captio’s.

Objective: raising awareness and convincing

In view of this situation, Captio’s challenge has to be to publicize its services better based on the argument that, within a short timeframe, an automated expense report and fraud control system generates savings for the company and improvements in the quality of the work and the working atmosphere. As such, the return on investment is fully guaranteed.

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