Jess works in sales and has taken a high-profile prospect out for dinner at a swanky London eatery. She’s pulled out all the stops to impress, including Champagne and a four-course meal. Jess is not sure her business meeting was entirely in policy and she’s also gone and lost the receipt! To recoup her money Jess plans to inflate her mileage claims over the next few months. She figures it’s all ‘swings and roundabouts’ anyway. Right?
Wrong. In this example, everyone loses. Jess is confused about what falls in company policy, is fed up of losing receipts and will be paid much later and in small increments. The sales and finance teams have a warped view into departmental spend because costs that should fall under client entertainment have been attributed to mileage/fuel costs. This makes it difficult to budget accordingly and results in an overall lack of visibility for the finance team. It also opens up a Pandora’s Box of errors should HMRC pay you a visit. The VAT receipts won’t add up to the business miles travelled and her company could be severely penalised for reclaiming VAT on fuel that wasn’t legitimately spent. Claims that were potentially out-of-policy have completely slipped through the net and what Jess is doing technically constitutes as fraud. Bad news all round.
Could the humble mobile phone really solve all these woes?
As smartphones get smarter, employees’ expectations rise – they want their companies to support a “work from anywhere” approach with the right technology to boot. The world of expense management is no different. Mobile tools and apps are transforming the arduous, error-prone process of claiming expenses in a number of ways. And not just for claimants.
Research from the Aberdeen Group has found that 57% of companies report poor visibility into spending and compliance being the greatest T&E business pressure they face. So what role can mobile play in helping to ratchet up compliance for the business while giving employees the tools they expect? Here’s five ways a mobile expense solution could help…
1) Stop employees trying to find workarounds
In most cases, employees want to do the right thing by the business, but when the overall expense process is arduous and time-consuming, employees do what you’d hope they’d do in their day jobs – look for quicker, smarter ways to get things done. With expenses, that could mean hanging on to receipts for months to tackle in one sitting, or finding workarounds like Jess did. But if the process was simple and painless, most would prefer to follow the rules and submit claims as they go. You just need to put a simplified system in the palm of their hands. They won’t need to ‘beat the system’ because it works for them in an intuitive way.
2) Cut out errors during data capture
Mistakes happen. And the more touches individuals have to make, the greater the opportunity for errors to occur. But when you use mobile technology to capture receipts, read data and automatically populate expense lines, it reduces the opportunity for mistakes to creep in and the chances of expense fiddling happening further down the line. Integrations with credit cards and third-party providers also means data is accurately and automatically imported.
3) Empower employees to make the right choices
You can also give employees greater peace of mind by building your T&E policies into your mobile expense tool so employees are instantly notified if an expense is out of policy before it’s submitted for approval and often at the point of purchase. They’re confidant they’re following policies and will also get their money back much faster.
4) Get insight earlier on
The best part of streamlined expenses using the power of mobile is that the finance team gets greater and earlier visibility into accurate spend. This gives finance more control over outgoing spend by department and cost code – sometimes even before it’s been spent. As a result, budgeting and cash flow management is greatly improved, helping finance play a more strategic role in the business.
5) Have all paperwork in order when HMRC visits
Finally, you’ll be in better shape when HMRC knocks on your door. All receipts and claims would have been digitally captured, which is often preferred by the taxman, as it means they don’t have to sift through piles of paper – if you can find them in the first place! The greater level of data accuracy and policy compliance also means you’re less likely to fall short of regulatory requirements.
To find out more about HMRC compliance and exactly what the taxman is looking for, download the Expenses, VAT and HMRC Compliance in a Nutshell eBook. And if you’d like to learn more about the power of mobile in simplifying expenses, talk to us on 01628 645 100.