Amid a cost-of-living crisis, automating the expense process is key to reducing tensions between employees and managers
For staff and management alike, the cost-of-living crisis has added a palpable sense of nervousness to the process of claiming expenses.
There’s no doubt that rising inflation is putting employees’ personal finances under strain – in fact, a recent Europe-wide survey suggests that 70% of the workforce shares this worry.
The same study, by Coleman Parkes, noted various knock-on effects, such as the nagging concern – cited by 49% of respondents – that bosses will think badly of those who submit high expense claims.
Nearly as many (48%) think that if they aren’t careful, they might even commit fraud by accident – while 58% worry that filing expenses incorrectly will get them into trouble with their manager.
The post-lockdown work environment has arguably made matters worse. At some companies, for example, the question of who should pick up the tab for home-based and hybrid workers’ energy bills is a vexed one.
Executives, meanwhile, face challenges of their own. A war for talent is raging – and if expense payments are laggardly or inadequate, the danger is that staff members will walk.
Needless to say, businesses aren’t immune from rising prices either. All of which puts chief financial officers in a tough position.
And as they look for solutions, they’re increasingly typing ‘spend management’ into search engines.
The most successful enterprises focus on people. They respect their customers and treat their employees well, knowing that good faith will yield healthy commercial benefits.
But savvy companies also know when to deploy technology to good effect. And they’ve noticed lately that there’s a clear space for automation and artificial intelligence (AI) in the expense process.
The Coleman Parkes survey found that as things stand, 46% of employees don’t claim small sums of money because the process is too difficult or time-consuming.
What’s more, in the hybrid environment that the pandemic created, 51% of finance and HR decision-makers believe their current expense processes are too manual to work.
To many, the idea of using AI in this way might seem novel or even outlandish. They’ll need a certain amount of buy-in and education before they’ll consider a digital expense platform.
Nonetheless, the omens are promising. Of those employees surveyed, half agreed that automation was the best way to simplify the expense process.
The study found too that on the HR and finance side, 55% of decision-makers use AI to ensure taxable employee benefits comply with government regulations.
Overall, 62% say that digital tools help to manage expenses more effectively across their organisation, making the process smoother for the finance team.
The need for speed
As managing director of SAP Concur, a software-as-a-service firm specialising in travel, expense and invoice processes, Ryan Demaray has watched this surge of interest play out in real time.
“When we look across our website, the number-one piece of content that companies are looking for is around this cost-of-living crisis. They’re researching spend management in general and it’s a topic they care about deeply,” he says.
By and large, customers of SAP Concur want to reimburse their staff more quickly. “So, they’ll show up to a call and say, ‘We’re really trying to take care of them in this difficult time. How can we streamline our processes, but still maintain control and visibility?’
“Customers who met with us quarterly before are now meeting with us monthly, and this is a topic of every conversation in some way, shape or form.”
It’s clear that executives’ top priority is reimbursing claims at a speed that ensures staff don’t have to dip into personal funds to stay afloat. At the same time, it’s imperative that managers run a responsible business and allocate precious resources wisely.
In a competitive, fast-moving world, the last thing they want is cumbersome, frustrating processes holding them back.
Fortunately, smartphones make a world of difference.
Too many organisations are way behind the times. At a basic human level, submitting an Excel file with receipts attached just feels awkward.
The employee might be on the road for days or weeks. Furthermore, old-fashioned methods of claiming expenses are often blighted by human error and late reimbursement.
By contrast, using an app to submit a photo of a receipt while they’re on the move comes as naturally to a member of staff as posting a photo to social media.
An added benefit to the company is that as soon as the claim enters the system, the finance team has visibility into it.
The convenience of this system can’t be overstated.
Let’s say, for example, that you attend a conference on behalf of your organisation. While there, you go to numerous meetings with contacts over several days.
At each meeting, you take a photo of your receipt and submit them via the app. Simple as that.
The app also makes clear what sort of spending limits are in place – a source of reassurance for both employer and employee.
Another argument for automation is that all human processes are prone to errors. So, from a fraud and compliance perspective, an app that captures receipts is a boon to the employee.
Similarly, tracking a company car’s movements via GPS reduces the probability of an inaccurate or fraudulent mileage claim.
A major risk for employers is vendor fraud. Here, a fraudster submits an invoice that closely resembles that of a regular supplier, hoping it will be paid with no questions asked.
A medium-sized business might pay £50,000 in one go to a fraudster like this in the false belief that it’s settling a bill for recent work. “And then the next week, they get the same £50,000 invoice from the actual vendor,” says Demaray.
“If you’re that business, you may be unable to reimburse your employees the next week. They’re frustrated, and you’re eroding trust in your organisation. But these things happen – they’re the kind of stories we hear about at SAP Concur.”
In this regard, AI and machine learning have proved to be remarkably useful tools. Simply put, the technology has studied decades of expense data – millions of transactions – and been trained to flag up anything that looks suspicious.
We know from experience that 17% of expenses contain a violation or something that needs to be looked at in more detail. Without these new tools, the only sure way to find the 17% is to review every single claim.
The beauty of AI and machine learning lies in their immense productivity benefits. Instead of data entry, the company can channel its efforts into data analysis, freeing up time to develop a more profitable business.
A symbiotic relationship
One of the saddest aspects of the cost-of-living crisis is the way it has driven a wedge between employers and employees. Different financial pressures have made them antagonists rather than allies.
Advocates for automation say this doesn’t have to be the case. The key to a symbiotic relationship, they contend, is to supply the workforce with useful tools – leading to lower costs, increased productivity, higher profits and more attractive salaries for everyone.
“All the widgets and tools are just things that we use to make that possible,” says Demaray. “The truth is this is about people, and employees are hurting at the moment.”
This article was brought to you courtesy of SAP Concur, to learn four steps you can take to support your employees whilst achieving cost efficiency click the link.