Four steps that finance and HR teams can follow to improve expense processes and policies
With the rising cost-of-living, employees are increasingly scrutinising their workplace’s financial processes due to concerns that these might impact their own finances.
Expense management is therefore now more important than ever for maintaining a positive relationship between employers and employees, writes Gabriele Indrieri, VP & Managing Director for SAP Concur EMEA South.
Employee satisfaction is essential for the strength and growth of a business. However, one area of this that is historically overlooked is expense management. By supporting employees through a simple expense process, with quick reimbursements, and ensuring up-to-date policies, it will help to make them feel appreciated and cared for.
Complex and daunting processes, on the other hand, can prevent employees from taking full advantage of expense claims as they are often worried about accidentally committing fraud, jeopardising their job security by doing something wrong, or not being able to afford the wait for their reimbursements – resulting in them feeling under-valued or unappreciated.
This is reflected in recent research into expense management and employee experience from SAP Concur which reveals that nearly half (49%) of employees across Europe Middle East and Africa (EMEA) worry that their managers will think badly of them if their expense claims are high – suggesting some employees may be reluctant to expense all their business costs. Meanwhile, 54% believe that they will get into trouble if they file their expenses incorrectly.
With these challenges in mind, here are four steps that finance and HR teams can follow to improve expense processes and policies to support employees:
1. Utilise technology such as AI and automation
The way many expense management policies are set up is inadequate for the modern-day challenges that businesses and employees face – especially considering employee’s concerns around processes that put pressure on them to complete manual tasks with which they are unfamiliar.
Nowadays, automation technologies can help to support efficient and straightforward processes. Organisations already implementing these are reaping the benefits of improved employee experience and efficiency, helping to alleviate pressure on individuals and increase satisfaction.
In line with this, SAP Concur’s study found that 50% of employees pinpoint automating the expense process as the best way to simplify it. The shift to digital tools is underway, with 55% of finance and HR decision-makers already using AI to ensure all taxable employee benefits comply with government regulations, and 62% saying that digital tools help to manage expenses more effectively across their organisation.
Without them, finance and HR teams would spend more time hunting for errors and checking compliance manually and inefficiently.
2. Ask employees for regular feedback
How businesses respond to expense management challenges will either elevate employee satisfaction and cement talent retention or create a breaking point in the working relationship, causing talent to churn.
Employees engage with the expense process on a regular basis, so business leaders need to understand how they can improve it by asking for team members’ views. According to our research, 79% of employees say their company is conducting feedback initiatives to measure satisfaction, yet only 27% say this happens frequently.
Businesses should understand that this is an important activity as it can help to reduce workplace stress without providing direct financial support. Only by talking to employees can employers understand what training they need to put in place or which policies they can improve to make employees feel more at ease with expenses.
3. Creative, robust expense policies that are fit for the times
Expense and invoice management systems have had a long-held reputation for being time-consuming and difficult to navigate, but this doesn’t have to be the case.
It’s undeniable that the issue of inadequate and long expense processes is frustrating for employees. At the same time, businesses are eager to reduce inefficiencies in their operations and cut costs. There is also an opportunity to do so whilst improving procedures and policies to support employees.
Expense policies should be simply and to the point. The employee-facing version should cover the basics and exclude any legal or corporate jargon, with all points stated clearly. The easier the policy is to understand, the easier it is for employees to follow and enforce. Employers should also take into consideration that expense types and requirements have changed in the past few years with trends like remote working on the rise.
4. Ensure managers are communicating policies transparently and openly
Technology, such as AI and automation, is crucial, but it must be combined with a culture of transparency and open communication to defuse tension and enable employees to easily navigate the expense process whilst allowing finance and HR teams to efficiently administer them.
Any updates that are made to the policy should be clearly communicated to ensure it reaches all employees. Explaining the reasoning behind policy changes, and how it benefits all employees, helps with acceptance and compliance. It’s important that there is a policy to follow, but also that everyone is held accountable – with no exemptions, regardless of seniority – to ensure that it is fair across the board.