How to Avoid the Productivity Drain of Outdated Finance Processes

~7min reading time – 26 August 2024

In an effort to tackle the 9.7% average turnover rate in Ireland, retaining top talent and maintaining a highly engaged workforce has become a top priority for Irish businesses. However, outdated finance and expense processes act as a silent saboteur, gradually eroding employee morale and productivity.

The cumbersome nature of manual expense reporting, coupled with the constant need to correct errors, chase down missing receipts, and reconcile discrepancies in expense reports leads to lost productivity, delays in reimbursements, and unnecessary tension, not to mention frustration and demotivation across the entire workforce.

By proactively addressing these pain points and adopting modern expense management solutions, companies can safeguard employee engagement and avoid the costly consequences of a disengaged workforce.

The Toll on Employee Productivity and Engagement

To fully grasp the impact of outdated expense processes on employee productivity and engagement, it's helpful to consider the six key employee archetypes identified in a recent McKinsey study, as discussed in our previous blog post, How To Boost Employee Productivity With Digital Cards.

Let's explore how inefficient expense systems can affect each of these archetypes and hinder overall productivity:

"Quitters" and "Disruptors": Already on the verge of disengagement, these employees, representing roughly 21% of the workforce, are likely to find the tediousness of manual expense processes the final straw. The added frustration can further fuel their dissatisfaction, potentially accelerating their departure from the company, leading to increased turnover costs and loss of valuable talent.
"Mildly Disengaged": This group, comprising approximately 32% of employees, is already somewhat disconnected. Inefficient expense procedures can quickly exacerbate their demotivation, pushing them closer to the "Quitter" or "Disruptor" categories, and further eroding overall productivity and engagement.
"Reliable and Committed": Even these typically dedicated employees, who make up a significant 38% of the workforce, can experience frustration and demotivation if they feel their time and efforts are not valued through a streamlined expense process. The added burden of manual expense reporting can lead to decreased productivity and a decline in their overall engagement, impacting the company's bottom line.

The Strain on Finance Teams

Finance teams, often composed of "Reliable and Committed" individuals, are not immune to the negative impacts of outdated expense management systems.

Consider these statistics:

Companies process an average of 51,000 expense reports each year.
Manual expense management processes consume a staggering 3,000 hours each year.
One in five expense reports contain errors or missing information costing an additional €47 and 18 minutes to correct each expense report.

These trends undoubtedly create a breeding ground for burnout and frustration even among the most dedicated finance employees. For more insights on this, check out our article on top 3 ways to reduce finance admin in your company. The constant firefighting and lack of time for strategic work can hinder their ability to provide valuable financial insights, leaving them feeling underutilised and unmotivated.

In the long run, this strain on finance teams can result in decreased productivity, increased errors, and a potential exodus of talent, especially among those who crave a more fulfilling and impactful role within the company.

A Modern Approach to Safeguarding Employee Productivity

The good news is that companies can pre-empt the challenges of outdated expense processes and proactively safeguard employee productivity and engagement by adopting digital expense management solutions like CleverCards.

By automating and streamlining the expense process, CleverCards digital Mastercards empower employees and free up valuable time for finance teams to focus on strategic initiatives that drive growth and success.

Here’s how:

Empowerment and Efficiency

Automating expense tracking, receipt capture, and report generation eliminates the tedious manual tasks that drain employee morale and productivity across all archetypes. "Quitters" and "Disruptors" are less likely to feel burdened by administrative overhead, while "Mildly Disengaged" employees may find renewed motivation in a more efficient system. Even the "Reliable and Committed" will appreciate the time saved, allowing them to focus on more fulfilling and impactful work.

Transparency and Trust

Providing real-time visibility into spending creates transparency and trust between employees and the finance department. This reduces frustration and delays, particularly for those "Mildly Disengaged" who may be prone to scepticism. It also empowers "Reliable and Committed" employees to take ownership of their spending, developing a sense of responsibility and accountability.

Accuracy and Time Savings

Automated validation and reconciliation minimise errors and discrepancies in expense reports, saving time and resources for both employees and finance teams. This reduces the burden on finance professionals, allowing them to focus on strategic work rather than tedious corrections. It also minimises the risk of reimbursement delays, which can be a major source of frustration for all employees, especially the "Quitters" and "Disruptors."

Faster Reimbursements

Accelerating the reimbursement process demonstrates to employees that their time and efforts are valued, boosting morale and developing a sense of loyalty. This is particularly important for retaining talent, as discussed in our post on how to use prepaid digital mastercards to retain gen-z employees.

Mobile Accessibility

Enabling employees to submit expenses on the go enhances convenience and compliance, further streamlining the process and reducing friction. This flexibility is particularly appealing to younger generations and can contribute to a positive employee experience across all archetypes.

Conclusion

Outdated expense and finance processes are not just a minor inconvenience; they are a silent productivity killer with far-reaching consequences for employee engagement and the overall financial health of the company.

By proactively adopting CleverCards, Irish companies can develop and maintain a culture of efficiency, transparency, and trust, ultimately safeguarding their most valuable asset: their people.

For more information, contact the CleverCards team by filling out the enquiry form below. We look forward to hearing from you soon!