LONDON, UK, 18 June 2013 – A quarter (25 per cent) of UK businesses operate without an expenses policy outlining what employees can and cannot claim on expenses, according to a study by analyst house Quocirca. The study – commissioned by travel and expense company Concur – also reveals that of the remaining three quarters (75 per cent) that do have an expenses policy in place, over a quarter (28 per cent) do not strictly enforce it.
The survey – which polled 200 individuals charged with handling expense claims within their organisation – demonstrates the extent to which UK businesses are still vulnerable to fraudulent expense claims, with only a third of expense processors rigorously checking claims against their corporate policy. The data shows that clear, formal guidelines to protect against expense fraud are missing from the majority of organisations, putting them in danger of leaking cash and running into compliance issues.
Isabel Montesdeoca, General Manager and Senior Vice President for Concur in EMEA comments: “The vast majority of all employees are honest and transparent when it comes to submitting claims. However, there is a small group who will always try to take advantage of the system by claiming illegitimate expenses. The best way for any business to avoid falling victim to expense fraud is to establish a clear, public, and well-enforced corporate policy.”
Similarly, despite £350m leaking out of UK businesses through out-of-policy expense claims, only a third (30 per cent) of expense processors take the time to check every receipt they process to ensure it is legitimate. Small businesses – often the companies that have the tightest cash flow – are the most susceptible to expense fraud, with only 27 per cent checking every receipt submitted by their employees. Tightening up this process is an area that could benefit a significant number of the UK’s SMBs.
Montesdeoca continues: “Finance teams are typically under enormous pressure to deliver a wide range of demanding tasks on a day-to-day basis, of which expense management is just one. For this reason, the vast majority are unable to invest the time needed to fully enforce their company’s policy and ensure all expenses are legitimate. By investing in an automated expense management system, companies can streamline the entire process, eliminating fraud and saving their accountant time.”
The survey, that also polled 200 individuals that claim expenses, revealed that the UK workforce is losing over £330 million per year in unclaimed expenses; more than the amount of money the government recently invested in the country’s new Business Bank. It found that nearly a third (32 per cent) of UK employees that claim expenses regularly sacrifice at least £60 per year in unclaimed expenses, with nearly one in five (17 per cent) losing at least £120.
Automated expense management systems on the market today can provide businesses with visibility and control of the whole process, guaranteeing compliance and quickly identifying fraudulent activity. Concur’s web-based solution comes with a smartphone app – available on Blackberry, iOS or Android – allowing employees to submit and approve expenses when they are out of the office.
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