November 24, 2022
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Is poor management of employee expenses affecting your employees’ productivity?

By on November 14, 2022 0

When it comes to expense management, most companies have an “If it ain’t broke, don’t fix it” approach. Manual processes have dominated this space for a very long time, and snail-paced approval processes are a bitter pill that most employees have swallowed.

However, logic dictates that there is a direct correlation between employee productivity and employee expense management. To unpack this, let’s start by learning more about employee culture.

Crafting the right corporate culture can be like building a Jenga tower – a single floating brick can cause a cascade of dissatisfaction and broken morale. Increasing pay transparency has reduced pay inequality for the same level of expertise and experience across companies. This has made a good work culture and the attitude of the employer towards employees important consideration factors for employees.

A good work culture is a set of attitudes, beliefs, and day-to-day practices that define the overall employee experience. This gives employees the feeling that the employer supports them and, in turn, encourages them to be valuable assets to the company. However, this is a complicated metric for employers and HR around the world to manage. It goes beyond offering a competitive salary and benefits to employees, as it also takes into consideration the pain points of employees.

Speaking of pain points, traditional expense management is riddled with manual processes that distract employees from focusing on their core work. For example, employees spend hours manually updating expenses, filling out reports, submitting receipts, and then spending another month or so waiting for the expenses they incurred to be reimbursed. This often makes employees feel like a “bank” for the company they work for, which is sure to create a lot of resentment.

Suppose a senior sales manager of a leading SaaS company spends ₹30,000 per month on business travel in his area. In traditional systems, after having traveled so much for work, he must keep a record of all the expenses he has incurred and file it WITH receipt in order to be reimbursed.

However, if his company offered him a simpler and easier process for managing, filing and submitting his expenses, as well as a shorter reimbursement cycle, he would feel more motivated and successful. Moreover, if a competitive company offers him a better employee experience, he is likely to change, regardless of the salary increase. After all, he won’t have to spend his days chasing after his manager and the finance team for the money he spent out of his own pocket.

Eliminate unwanted silos in spend management

In the presence of manual or semi-automated expense management, it is difficult for employees to have visibility into the degree of discretion they have over expenses, approval cycles, reimbursement status, and payment. other important information. These silos of unwanted information create a very frustrating experience for employees.

Another major issue for employees is the filing of expenses. Several companies require employees to submit physical invoices to date. Many others allow employees to submit scanned receipts, but still require them to manually fill in transaction details.

Digitizing this process should be very seamless and should lead to completely paperless processes for maximum efficiency. A powerful integrated expense management system, with built-in features that facilitate paperless processes, is a good place to start.

For an employee, working for a company with a fully automated expense management system can make all the difference in the world. It allows her to enter expenses through the automated systems in place, submit them at the push of a button, and get real-time visibility into the approval status and reimbursement cycle.

The pandemic has prompted an overhaul of travel and expense policies. As companies choose between remote, in-office, or hybrid models, these policies have become more complex than ever, making policy compliance painful for employees.

Example: an employee wants to book a flight worth ₹5500 from Bangalore to Mumbai for a meeting. They choose a flight and submit the request to the approver. However, unbeknownst to them, or due to miscommunication, they fail to realize that the revised policy dictates that the price limit for domestic flights is ₹5000. Now the employee is forced to return to the drawing board and replan the trip.

Reducing prices is only one aspect of spending policy. In large organizations, there are a multitude of policies in place and it is quite cumbersome for employees to comply with them in the course of their regular work.

Cost of bad spend management

As explained above, if a company wants to hire and retain quality talent, providing a good employee experience is essential. The cost of poor expense management is multiple and often turns into long-term retention issues.

As hiring becomes more expensive, it becomes even more important to prioritize simple, employee-friendly expense management. A robust and integrated expense solution can go a long way to solving this problem for employees.

While it is in employees’ direct interest to file expense reports diligently and in a timely manner to receive reimbursements, the business stands to gain by facilitating this through smart expense solutions.

Poor employee morale, higher turnover, reduced efficiency and a general feeling of dissatisfaction among employees are the high cost of poor management that employers must pay in the absence of the necessary technology.



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Disclaimer

The opinions expressed above are those of the author.



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