ANEXPENSIVEBUSINESSFindingthesolutiontoexpenseclaiminefficiency2CONTENTSIntroduction3Expenseclaims:attitudesandrealities4EmployeeRelationshipManagement7Casestudies14Conclusion153INTRODUCTIONAcreativeapproachtoclaimingexpensesisoftenseeneitherasaperkofaparticularkindofjob,oravenialcrimeatworst.Infact,newresearchconductedbyMORIsuggeststhatglobally,companiesarelosingmillionsthroughbothcasualandsystematicexpenseclaimfraud.Inaddition,financialdirectorsinparticularareprimarilyconcernedabouttheirlackofcontroloverthisaspectoftheirorganisation’sexpenditure.ThisisfurthercompoundedbyarecentsurveybyAmericanExpresswhichestablishedthatT&E(travelandexpenses)isnowthesecond-largestcontrollablecorporateexpenseaftersalariesandbenefits.Asworkingpatternschangeandmoreandmoreemployeesarechoosingtoworkoutsidetheoffice,companiescannotaffordtobecomecomplacentaboutthecostandcontrolimplicationsofinaccuratelymonitoredexpenses.Equally,theadministrativeburdenofaccountingevenforlegitimateclaims-andtheillwillthatcanresultfromdelaysinreimbursingexpensespaidfromemployees’ownpockets-amountstoaseriousdrainoncompanyresources.AccordingtoresearchbyTheHackettGroup,theaveragecorporationprocesses20,000expensereportsforevery$1billioninrevenue.Asinmanyareasofbusiness,newtechnologyprovidesanopportunityforcompaniestoimproveefficiencyandseizeacompetitiveadvantage.Extensity,expertsinEmployeeRelationshipManagement(ERM),offeranInternet-basedsolutionwhichautomatestheexpensereportingprocessfromthefirstclaimtothefinalreimbursement.4EXPENSECLAIMS:ATTITUDESANDREALITIESMarket&OpinionResearchInternational(MORI)conductedatwo-partstudyintohowemployeesintoday’scompaniesmanagetheirexpenseclaims.Thefirstsurveyinterviewed982ABC1workers(366ofwhomregularlysubmittedexpenseclaims)throughouttheUK,andthesecondstagepolled102businessmanagersincompaniesofmorethan500employees.Expenses-whopays?Asubstantialproportionofthesampleinterviewed-41%-regularlyclaimbusinessexpensesfromtheiremployer.Creditcardsarethemostwidelyusedwayofpayingforexpensesinthefirstinstance,withmost(43%)usingtheirowncreditcardsandaminority(13%)usingcompanycreditcards.Athirdofemployeesusetheirowncash.Whenexpenseclaimsarelarge,employeesaremuchmorelikelytouseacreditcard.Olderworkers-thoseover25-arealsomorelikelytouseacard.Whatemergesfromthisresearchisthatasubstantialproportionofemployeespayforbusinessexpensesfromtheirownpocketinitially,whetherbycreditcardorcash.Usersofcompanycreditcards,andthoseworkerswhohaveaccesstoacompanyexpenseaccount,areintheminority.Sincetheyremainout-of-pocketuntiltheclaimissettled,employeeshaveadirectinterestinimprovingtheefficiencywithwhichexpenseclaimsareprocessed.EmployeehonestyOneinfiveworkerswhoregularlyclaimbusinessexpensesadmittotakingadvantageofthefactthattheyareonexpenses,byspendingmorethannecessaryonsuchthingsashotels,restaurantsandentertainment.Theyaremorelikelytodothiswhenusingcompanycreditcardsandexpenseaccountsthanwhentheyareusingtheirownmoney,butthetemptationtobeextravagantwhenthespendingisreimbursableisobviouslywidespread.5Whateverthemoralperspective,thefactthatthistendencyissoprevalentmightmakeitmoredamagingtoacompany’sbottomlinethanstraightforwardexpenseclaimfraud.Asitis,theresearchrevealsthatoneintwentyworkersadmittohavingmadeanillegitimateclaimatsomepoint,forexpenditurethatwasnotatallwork-related.Amongstthosewhosecavalierattitude...
