Companies Waste €500,000 Annually Correcting Expense Report Errors
If you've ever gritted your teeth while digging through a pile of crumpled receipts, you know the feeling – expense reports are the bane of the business world. But what if we told you they're not just annoying, they're also costing your company a fortune?
The hidden costs of outdated expense and reimbursement processes extend far beyond employee frustration, loss of productivity, finances, and even employee well-being.
In this article, we'll explore the financial drain caused by old-fashioned expense and reimbursement processes, the unique challenges faced by remote workers, and how modern solutions can enable businesses to adopt a more streamlined, cost-effective approach to finance management.
Irish Companies Waste 3,000 Hours Per Year on Outdated Expense Processes
You may not be aware, but there is currently a universal dread associated with old-fashioned, manual expenses. In a 2019 SAP Concur survey, a whopping 20% of employees said they'd rather endure a trip to the dentist than tackle an expense report. That may sound dramatic but wait until you read on a bit further and you will understand why it’s such a burden on employees, finance managers, and business owners.
The 2022 Global Business Travel Association study further validated the widespread discontent, finding that:
- 19% of expense reports contain errors or require clarification.
- Correcting a single expense report costs businesses an average of €48 and 18 minutes.
This means businesses around the globe spend, on average, approximately €500,000 and nearly 3,000 hours annually correcting errors in expense reports. In companies where travel is frequent, these seemingly small figures quickly snowball into significant losses. And with Mastercard's 2023 study revealing that large businesses are planning to increase travel budgets, the problem of inefficient expense reporting isn't going to go away on its own.
Employees Are Still Expected to Front The Cost of Business Expenses
Another issue that keeps cropping up is that employees are still expected to front the cost of business expenses, leading to cash flow issues and financial stress.
This outdated practice not only strains employee’s personal finances but also creates a negative perception of the company's commitment to their well-being. It's a lose-lose situation that can easily be avoided!
The Domino Effect: Hidden Costs Beyond the Obvious
The consequences of outdated expense management practices extend beyond mere frustration and financial losses.
For example:
Lost Productivity
Old-fashioned expense processes aren't just a headache for your finance team; they directly impact the productivity of your entire workforce. Remember that GBTA study that found almost 3,000 hours are wasted each year correcting errors in expense reports? Now, imagine the cumulative impact of these wasted minutes across your entire company!
Disengagement and Turnover
When companies neglect employee well-being and financial needs, it sends a clear message of disregard. This disregard not only affects morale but has a significant impact on employee engagement and turnover rates. For example, Gallup research found that job-hopping costs the global economy a staggering €9.13 trillion in lost productivity annually, with the cost of replacing an individual employee ranging from one-half to two times their annual salary.
Revenue Reporting Headaches
Ireland's new Enhanced Reporting Requirements require meticulous expense and reimbursement tracking. Manual processes leave businesses vulnerable to errors and potential penalties, adding further strain to already overwhelmed finance teams.
The Solution to Outdated Finance Processes
The good news is that there's a solution that addresses these challenges head-on: CleverCards digital prepaid Mastercards.
Here's how!
Speed Up the Employee Expense Process
CleverCards prepaid digital Mastercards eliminate the tedious, time-consuming tasks of chasing down receipts and processing reimbursements, saving finance teams thousands of hours annually. They also remove the need to wait for the delivery of plastic cards, which can’t often take months to issue from banks.
Once an employee receives a CleverCard, they can add it to their digital wallet, like Apple Pay and Google Pay, in minutes, giving them immediate access to the funds they need for essential purchases. While your finance team gains more control over expenses, your staff is empowered with a much easier user experience.
Need to top up cards for extended business trips or unexpected expenses? It's easy! Issue additional funds directly to the card on the go, ensuring your employees always have the resources they need to complete their tasks without waiting for approvals or reimbursements.
Increased Security and Control
Giving your employees a CleverCards prepaid digital Mastercard puts you in the driver's seat of company spending. Think fully configurable business expense cards that can be issued to employees instantly no matter where they are in the world. You can apply strict spending limits and category-specific restrictions (e.g., travel, accommodations, meals) on each card and control spending via a real-time dashboard.
This means you can finally align your expense management process with your company's policies, prevent overspending before it even happens, and streamline budget control.
Eliminate Enhanced Revenue Reporting Requirements
Since January 1st, employers must report to Revenue each time they reimburse employees and directors for travel and subsistence expenses. However, employers are not required to report to Revenue when a CleverCards prepaid Mastercard is used by an employee or director to pay for expenses, saving hundreds of admin hours.
Find out more about Enhanced Reporting Requirements here.
Ready to Update Your Expense and Reimbursement Processes?
Manual processes, mountains of paperwork, reimbursement delays, and the added pressure of Ireland's Revenue reporting requirements are creating unnecessary costs and frustration for everyone involved. The good news is that CleverCards prepaid digital Mastercards offer a swift and easy way to take control of your spending and manage employee expenses efficiently.
By switching to CleverCards, Irish businesses can adopt a streamlined expense management solution that drastically reduces the administrative time for both employees and the finance team. Employees gain the freedom to make necessary purchases without dipping into personal funds, boosting morale and job satisfaction, and companies benefit from increased spending control, real-time financial visibility and improved security.
The best part is that businesses new to CleverCards can get set up within 24 hours, immediately issue employee expense cards, and view/control category spending in real-time.
For more information, contact the CleverCards team by filling out the enquiry form below. We look forward to hearing from you soon!