How does human error impact on personal expense management?

It's true that personal expense management accounts for a very small proportion of the activity conducted in your business, but the consequences of a poorly managed process can be significant, both financially and in terms of time spent correcting errors and issues. 

Traditional expense management processes rely on the people in your business completing and submitting their expense claims.

And because your people are busy, and distracted, and often have more important things to do, the expense management process can be fraught with error.

Here's a run-down of the ways in which human error can impact on timely and accurate expense management.

Inertia

For many of your employees, claiming expenses is one of the least important things they need to do amongst their many other activities.

The distraction of other priorities means that their unclaimed expenses can often roll over from one month to the next, resulting in a surge of expenses at a later date.

Whilst this amount is unlikely to cripple your business, the lack of timely expense claims means that you lack clear visibility of your costs to date and any payments made against them.

Timing

Despite their best intentions, many employees will fail to meet the monthly cut off for expense claims, which means that expense bills build up in the background, and those with urgent claims will be calling for out of cycle expense payments, throwing your repayment process off track.

Missing receipts

Your employees do not deliberately lose their receipts, but the chances are they've put the proof of their payment in ‘a safe place’ or have simply forgotten to put it in any particular place.

So whether lost or ‘mis-filed’, missing receipts can prove a real obstacle to an efficient expense management process. 

HMRC need to see a clear trail of receipts to support payments made for personal expenses, which is why it's important that they are provided as part of the expense management process.

However, this doesn't help your colleague John who is busy emptying out his desk drawer in the hunt for his various taxi receipts.

Lost receipts are a barrier to progress for your expense management process and an unnecessary waste of time for your employees who are scrabbling to find them.

Forgetfulness

There will be a cohort of your team who simply forget to make claims for their expenses.  And because you cannot see what their pending claims are, it means that you don't have a clear and accurate view of your forward costs.

Mis-claims

Some of the expense claims that you receive will be genuine errors, claims for items which should not have been submitted, or simply for the wrong amount.

Spotting these relies on a high degree of checking effort by your finance team, and a similar amount of rework notifying your colleague of the error and asking them to resubmit their claim.

So, if you recognise some or all of these issues across your business, then it’s time to consider automating your expense management process.

At Expend our solutions allow you to track and manage employee expenses in real time and automate the repayment process to colleagues, ruling out the need for personal claims. 

By creating swift and accurate data gathering on expense purchases as they occur, you can achieve a real time picture of your management expenses and ensure that your employees are fully reimbursed for money that they have spent on your behalf.