Getting employees onboard with your expenses policy
You’d have thought that employees would be only-too-eager to submit their expenses each month if it means they are reimbursed on time. But those working in finance departments will be well-aware that many still leave it to the last minute, submit claims after your deadline has passed or sometimes not at all.
When staff fail to engage with the system, it is often a sign that something is wrong with it. But instead of ignoring the problem, secretly relieved that the company has less to pay out this month, it should be a wake-up call. Businesses, after all, rely on their people being prepared to travel or work unsociable hours. At the very least, the expenses process should be simple, fair and well-communicated, otherwise employee goodwill won’t last long.
One of the obvious stumbling blocks is that manually collating receipts and tracking mileage creates an admin burden for time-pressed employees – especially those who spend a lot of time on the road, like salespeople and engineers. Another is that they don’t know what they can claim for (and how much) because the policy is buried somewhere on the intranet and rarely updated. This can lead to confusion and frustration, especially when claims have been rejected in the past.
This is why employers have to spell out their obligations, so nobody is left wondering whether or not they are being short-changed. HMRC has clear guidelines for mileage expenses – but if you pay more, workers need to be aware that they may end up paying more in tax. Similarly, it is worth reminding them that they are eligible for payments of up to 5p per mile tax-free if they take a passenger in their car.
Even though finance has traditionally led the way with expenses policies, they are not necessarily the best people to deliver these messages. HR has far more expertise in employee engagement, while line managers speak to their team day-to-day and understand the expenses challenges they may face.
Expense management software can help to streamline the process, both for employees and finance departments. Using an app on their smart phone, staff can quickly add their claims and take pictures of tickets and receipts. It also enables finance to automate the process, setting parameters in line with company policy, so employees know exactly what is permitted and what has been called into question. Furthermore, the fact that one claim has not yet been approved does not mean the rest can’t be paid.
With a system like this in place, there is no reason why companies cannot move towards a continuous cycle of weekly, not monthly payments, so employees do not see a financial shortfall.
As we saw in our previous blog, every company needs a robust and up-to-date expense policy, which is reinforced by your expense system. Always ensure the rules are easy-to-understand and positive language is used wherever possible, telling people what they are entitled to rather than assuming they are going to break the rules. Think how different ‘you can travel first-class on journeys longer than 30 minutes’ sounds to ‘you must not travel first class on journeys of less than 30 minutes’, for example.
Above all, a good expense system depends on collaborative working between finance, HR, line managers and, of course, the workforce. There is no ‘them and us’ when it comes to expenses – a company should have a clear policy that distinguishes between expenses as reimbursement and benefits, which are taxable, as well as the systems in place to pay employees in a timely and efficient way.
Expense management software can help to streamline the process, both for employees and finance departments.
