This is a summary of our latest webinar. You can watch the full webinar and check out our latest eBook "The Hidden Health Impact of Traditional Expense Management" here!
Roomex hosted our inaugural webinar of the year, titled “Expense Excellence: Navigating the Challenges of Waste and Fraud”, on Thursday, February 29th. The event featured panellists Charlie Healy (Director of Payments), Sam Costello (Director of Marketing), and James Redman (Corporate Card Sales Manager - Allstar), who delved into the current state of expenses in the business landscape, the challenges inherent in the traditional expense management process, and proposed practical solutions beneficial for finance teams and travellers alike.
Understanding Expenses in Today's Market
While expenses remain fundamental to business travel, attitudes towards them and the methods of expensing continue to evolve. Towards the end of 2023, Roomex conducted a survey of over 1,230 Finance and HR Managers to explore how companies approach expenses. Key findings highlighted the priority elements in expense management and how travelling employees navigate expenses.
An overwhelming 79% of organisations prioritise cost efficiency in booking travel and managing expenses, a trend unsurprising amidst recent inflationary pressures. Delving deeper, data analysis reveals that convenience, prioritised by 53% of organisations, emerges as a crucial factor. However, while many organisations opt for short-term convenience in their chosen expense management methods, these methods may not always align with long-term business optimisation in terms of convenience provided.
Challenges with Traditional Expense Management
These solutions may not be optimal for organisations in the long-term, but for travelling employees this short-term convenience may present an inadvertent burden, leading to adverse effect over time. Particularly for low to mid-level employees, the strain of out-of-pocket expenses is amplified amidst the rising cost-of-living. Such financial stress often forces travellers to make compromises in dietary choices and sleep patterns, both of which have an impact on employee well-being and productivity. The stresses of paying out-of-pocket often lead to travelling employees having to choose the unhealthy option, as they mightn’t be able to afford the more expensive, but healthier, alternative. Even when companies provide employees with a meal per diem, we have found that many employees treat such per diems as an addition to their salary, rather than a specific fund allocated towards incurred travel expenses. Stresses around paying out-of-pocket and collecting receipts also lead to travelling employees sleeping less per night than they should be. In an effort to save more money, some employees are electing to stay in accommodations which are situated far away from their worksite or are even choosing to forego sleep and simply drive home after a long day of work. Neither of these choices provide the employee with enough time to rest effectively and remain productive. Additionally, the traditional expense process contributes to productivity loss and susceptibility to fraud within organisations.
Financial stress costs the UK economy £28 billion annually, with 25% of employees experiencing cognitive impairment due to such stress. Moreover, administrative efforts in expense reconciliation and reimbursement, couple with the pervasive issue of expense fraud, underscore the need for reform in expense management practices. As pervasive as expense fraud is, many people do not recognise the true extent of it across UK business. Each year, globally, expense fraud costs businesses 5% of their revenue and, in the UK specifically, £140 billion is lost to it annually. While these figures are pretty daunting, there are solutions to expense fraud, which also help to improve the lives of your travelling employees.
Practical Solutions for Improvement
Numerous solutions exist to enhance expense management efficiency. However, there are some foundational steps which should precede the adoption of any solution. Companies must first implement or review and update their travel policies. It is important to remember that travel policies are a living, breathing document which should be updated regularly to accommodate any changes that are made internally. They are not something to be forgotten and left to become outdated. Companies with a tight and updated travel policy can save up to 23 per cent, per traveller, off the bat. Furthermore, comprehensive employee training should be undertaken to ensure adherence to policies and mitigate out-of-policy expenses. This step is often overlooked and can lead to employees travelling out-of-policy without even realising it. These are two steps which every company should have enacted before thinking about partnering with an expensing solution or find a solution which will help you enact these two steps.
Roomex's engagement with customers revealed specific requirements within workforce companies that weren’t being catered to by existing expense solution companies:
Real time monitoring
With most workforce companies having multiple teams on the road at a time travel managers and finance teams need to know where they are and what they’re spending, particularly in terms of tracking the project’s budget.
Eliminate paperwork
This is a need of the workforce sector and most likely the majority of business sectors. Everyone aims to reduce paperwork and the administration involved in handling it.
Custom spend limits
Workforce companies often have different tiers of employees, who have different needs and as such, require different levels of spend. This can be due to type of project or project location, either way it is an important factor for workforce companies.
Responding to these needs, Roomex developed the Allowances product, alleviating out-of-pocket expenses through remote receipt uploads and offering real-time expense monitoring for finance teams. Allowances empower employees, reduce administrative burdens, and enhance visibility and control for businesses.
You can watch the full webinar and check out our latest eBook "The Hidden Health Impact of Traditional Expense Management" here!
