Why does claiming personal expenses cost so much time and effort for my business?

If there was an emoji to convey the traditional process for claiming personal expenses, it would probably be a face with eyes rolled upwards 🙄

Or a head in the hands 🤦

Despite it being a well-known truth that managing personal expenses at work can be a time-consuming process, it’s often regarded as an acceptable pain that businesses need to bear.

For employees and employers alike, there are several reasons why personal expense management can cost so much time and effort for your business. 

In this blog post, we will explore some of the reasons why the personal expense management process at work can take so long. Certainly, it requires a significant amount of attention to detail, meticulous record-keeping, and adherence to company policies and procedures. 

Here are a few of the ways the process is often clunky, slow and costly. 

Gathering receipts 🧾🧾🧾

One of the primary reasons why personal expense management can take so long is the need to gather receipts.

To be reimbursed for any expenses incurred, employees must usually provide detailed receipts that clearly show what was purchased, where, and when.

This can be a time-consuming task, especially if an employee has a lot of receipts to gather and organise.

Reviewing and approving ✅ → ✅

Once an employee has submitted their expenses, their claim needs to go through a review and approval process.

Depending on the organisation, this can involve multiple levels of review and approval, which can add to the time it takes to process the expenses.

Compliance with company policies 🔐 📖

To ensure that expenses are being used for appropriate business purposes, businesses usually have expense policies in place that employees must adhere to when submitting expenses. 

These policies may dictate what types of expenses are allowable, what the maximum amounts are claimable for certain expenses, and what documentation is required.

Employees must ensure that their expenses comply with these policies, which can add to the time it takes to process them.

Manual processes ✍️ 📚

Many organisations still rely on manual processes for expense management, such as paper receipts and manual data entry.

These processes can be time-consuming and prone to errors, which can further delay the expense management process.

Lack of integration with accounting systems 💻 💭

Finally, the personal expense management process may take longer if it is not integrated with the organisation's accounting systems.

This can result in delays in processing expenses and a lack of visibility into overall spending, which can be a problem for organisations that need to manage their expenses closely.

So, personal expense management at work can eat up a significant amount of time due to the need to gather receipts, review and approve expenses, comply with company policies, manual processes, and lack of integration with accounting systems. 

Expense management software provides a solution 📲 🎉

To streamline this process, many organisations are implementing digital tools and automating their expense management workflows to reduce the time and resources required.

This is where expense management platforms come into their own. 

The expense process can be completed through a hassle-free mobile app which enables employees to get on with their day and frees up accounts staff to turn their attention to higher-impact tasks whilst letting the software do the mundane but distracting tasks caused by expense claims.  

Receipts can be submitted as they occur, so the possibility of losing them over the course of the month is dramatically reduced.

And, for control purposes, expense management systems won’t complete the claim until the relevant paperwork is uploaded. This means that accounts are reconciled quicker and with less involvement from accounting staff.

And with the facility to integrate expense management software with accounting packages such as Xero, compliance with HMRC requirements is built-in, making the process seamless from a regulatory perspective. 

This smart technology makes the process of handling employee claims far simpler than the traditional method. With expenses logged as they are incurred, there is no backlog at the end of the month, which improves workflows and efficiencies.  

Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.