International survey shows expense processing is ripe target for cost-cutting corporations
Windsor, UK, December 15, 2008 – Business travelers are frequently out of pocket as a result of their employers’ archaic or unhelpful expense claim systems, which causes some staff to feel entirely justified in filing fictitious claims to recoup their losses. At the same time, these outmoded systems are saddling employers with excessive admin costs at exactly the time that they most need to trim budgets, according to new research from KDS, the European leader in on-demand travel and expense solutions.
KDS recently surveyed the opinions of 364 travel and expense professionals and regular travellers. Respondents were predominantly based in the United Kingdom, France and United States, giving a highly international perspective to issues around expense management. Key findings included:
- As many as 60% of respondents employers remain wedded to time-intensive spreadsheets for expense systems.
- Expenses are a major drag on executive time: 23% of travellers spend over an hour on each claim, and 35% take between 30 minutes and an hour.
- Staff may be padding their expenses as ‘retaliation’ for enduring convoluted claims procedures: 24% say they fail to claim back all their expenses, often losing track of receipts; 10% say this can cost them as much as €100 personally per claim; 11% have to wait over a month to be reimbursed.
- 11% of respondents say their employers expect them to pay the Internet charges for checking work emails whilst travelling.
- 16% of US respondents admit to inflating their expenses, versus 9% of British and 10% of French
- French staff cheat more often than their UK and US counterparts. However, while UK and US employees falsify expenses less frequently, when they do so it will, on average, be for a larger amount than their French counterparts would claim.
- The favourite method of boosting an expense claim in France is – quelle surprise – restaurant bills. Brits and Americans prefer more mundane taxi fares.
Given the frustrations of expense claim processes, it is perhaps surprising that not more employees fiddle – or admit to fiddling – their expenses. Although 49% said they knew how to do so, just 13% of respondents said they bumped up their claims. In most cases, the amounts over-claimed came to less than €50.
Yves Weisselberger, chief executive of KDS, said, “Expense claims remain a bête noire for many employees, and this survey shows how a minority seek to even the score. The greater message of this study is that, by sticking with time-intensive systems, companies are forsaking important cost-savings when they need them most, and submerging their people in admin when they should be out winning business.”
A previous study by American Express and global management consulting firm AT Kearney found that indirect administrative costs associated with travel and expense accounts amounted to 4.6% of the expenditure occurred. Better practices, the report argued, could reduce this by more than half, to just 2.1%, or €21 for every €1,000 spent. According to KDS, the adoption of automated expense account management would make up a significant proportion of this reduction.
Comments from respondents to the KDS survey include the following:
“When I put in a claim, I have to complete an online form attaching a PDF version of the receipts, then print a copy to send to Finance with a copy for reference, then send a request to my management team to authorise payment, then ensure they send all the information and receipts on to the Finance department. This is extremely time consuming and information has to be accurate, otherwise it is all rejected and you have to start again!”
Secretary, mid-size consulting firm, UK
“A salesperson falsified some restaurant receipts and claimed for meals that were actually eaten at home.”
Accountant, large distribution company, France
“The finance department seems to think it runs the company, whereas in reality it is an outsourced entity trying so hard, yet so vainly, to adhere to stricter than normal rules given by the employer recovering corporate card data.”
R&D professional, large media company, UK
“It’s important to reflect on why people cheat with their expense accounts. I cheat because my company’s policy is sometimes so restrictive that I’m looking to compensate for lost money. It’s the only way to get all my money back. For example, I can’t claim for my minibar bill, so I increase my taxi fare by $5.”
Marketing professional, large IT company, USA
“One reason for a lack of receipts is the London Transport Oyster system. In effect the fare doubles if you want an individual receipt. You also need to queue, delaying the journey.”
IT manager, mid size financial services firm, UK
“The more I went on business trips, the more I lost money. My company’s policy was to make the reimbursement of business expenses lengthy, difficult and discouraging.”
Manager, large media company, France
“Companies often turn a blind eye to our phone calls and Internet connections although we’re often asked to be on duty (at night and during weekends) and are therefore likely to have to communicate from elsewhere. Trips to see customers in the Paris region are counted as Home-to-Office trips, although customers are invoiced for them.”
Engineer, large IT company, France
“This is definitely one of the areas – or the area – where we have the most work to do. We have unclear or unsuitable policies, inconsistencies, archaic processing, no reliable reporting…I won’t go on because the list is too long!”
Managing Director, small IT company, France
“One of the things that’s ‘broken’ in our expense account system, which is extremely frustrating, is that no matter how fast I complete my monthly expense accounts, the credit card suppliers invoice me for penalties for delay. There’s a problem between our tool and the credit card and I find it totally unjust that I’m penalised personally for this problem. Until it’s fixed, I’ll keep submitting overstated expense accounts to compensate.”
Sales person, large transport company, USA
A copy of the full survey report is available here.
KDS on-demand travel and expense offers a completely integrated solution for travel and expense management, addressing essential needs ranging from travel policy definition and enforcement, to online travel self-booking, to automated travel expense processing and beyond. Every critical procedure can be completed through the KDS ASP offering, resulting in greater efficiencies and associated financial benefits. In addition, KDS offers the most extensive back-end connectivity to airline, car, rail and hotel providers in the industry, ensuring optimized pricing and up-to-the-minute inventory control. For more information, visit www.kds.com.