Practice Management

Mission: Take the Pain Out of Employee Expenses

Written by Ryan Corlett

Reimbursement of employee expenses—for travel, meals, and accommodation—is an area of business life that, in theory, should be simple. So how is it that something so seemingly straightforward has become such a painful, troublesome, and risk-filled area of company finances? Why do our finance teams continue to struggle to keep proper control of these costs?Employee Expenses

It’s estimated that U.S. companies are losing around $2.8 billion each year to employee expense-related losses. The average amount that an employee who falsifies and exaggerates their expense reports gets away with is $2,448 per year.

And it’s not just fraud that’s a problem. It’s also the time and company resources required to track, manage, and monitor these expenses. Just consider the effort required as finance professionals manually process expense reports while at the same time safely handling the intricacies of Internal Revenue Service (IRS) tax rules.

The truth is that effective management of expense reports has been a far from simple task. This is due to a combination of ineffective management systems and the complexities of legislation, making it a notoriously tricky area to get a grip on.

Finding better ways to overcome these challenges inspired the formation of webexpenses. The company was set up by a pioneering team of finance professionals in the UK who had become frustrated with the limitations of traditional paper-based ways of managing expenses.

Combining accountancy expertise with a team of software engineers, they created a smarter way to control employee expenses. Constantly iterated and improved, the software is now used by companies across the globe—from small startups to major international corporations.

Simple Solutions

Whatever the shape or size of an organization, the key requirements for effective expense management are the same. Today, use of digital processes can virtually eliminate the need for paperwork, removing a reliance on cumbersome and error-prone manual tasks.

The key to success is having the knowledge and tools required to create a robust and equitable expense policy, one that can be easily managed and maintained. The first step for any business using traditional methods to manage reimbursements is to switch to a digital setup.

The move to automated and real-time ways of working fundamentally transforms the way that reimbursements can be managed. It allows any company to manage a tax-efficient accountable plan with each and every employee expense being tracked.

One powerful tool is to provide employees with a smartphone app they can use to instantly convert any paper receipt or bill they receive into digital form. By making the claims process so quick and simple, the need for finance teams to deal with a monthly flood of paperwork is removed.

Real-time Regulation

Another major advantage of digital is the way that it allows regulatory compliance to become an active part of employee workflow. On-screen notifications and checks allow a company expense policy to be delivered to employees at the point-of-entry.

Employee Expenses

using digital tablet in coffee shop

These notifications can be customized to provide checks and guidance relating to the costs being claimed. This real-time way of working gives finance professionals the tools they need to adopt a much more proactive form of management.

The systems provide a warning whenever a claim falls outside of company policy or exceeds any kind of custom spending limit that has been set. This allows issues over the validity of any claim to be resolved before costs are incurred.

This capability provides a powerful tool to protect a company against losses from expense-related errors and fraud. It means finance teams are no longer having to try and manually root out problems from a mass of paper claims.

Smarter Tax

A real-time expense system is particularly effective when it comes to navigating the complexities of IRS tax rules. The system automatically generates all the information that’s required for a tax-efficient accountable plan.

Reports that would take days to compile with a paper-based system can be created in a matter of minutes, with all information being handled digitally. In addition, a business is then able to prove to the tax authority that proper checks and balances have been carried out.

It’s when this kind of accurate information isn’t available that the IRS is liable to become suspicious, with an increased likelihood of an inspection or audit being triggered. So, while handling tax can seem daunting, it’s something that companies are now able to safely manage.

There are plenty of online resources available to help untangle the complexities of the tax system and ensure that your company meets the requirements of an accountable plan. When this basic knowledge is combined with an effective digital system, businesses have the power to properly control employee reimbursements.


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About the author

Ryan Corlett

Ryan Corlett is the General Manager of webexpenses, a fast growing global expenses management software provider. With an extensive background in account management, Ryan joined webexpenses in 2015 to open up the Australian division. The growth in this region led to further expansion into North America. Ryan now oversees both the APAC and North American divisions focusing on the continued expansion of both markets while also being part of the senior leadership team globally. With offices in the UK, Australia, and North America, webexpenses software is used by over 800 organizations in 70 countries throughout the world.

14 Comments

  • I think it’s funny that your website says “simple honest pricing”, but then proceeds to play the game of telling us how much we’ll save per claimant, but won’t just tell us what it costs per user, and I’m supposed to contact you to get pricing. I won’t waste one second in this day and age on companies that want to play those types of pricing games, not when I can visit countless competitors who clearly list their pricing.

    I see you’re also playing the game of putting a button that says “try us out” in the upper right, which doesn’t actually allow the visitor to “try you out”, but instead takes the visitor to a web page where they get to request a demo.

    So all my interest was lost by those strategies.

    • Hi Josh,

      Thank you for the feedback, we are a mid-market solution so there are varied prices depending on the complexities of your needs. Our preference is to have a conversation to better understand those needs and to deliver you with a personalised proposal.

      Similarly we will be more than happy to set up a configured demo system for you to try out. We are not an off the shelf solution so our approach is more personable.

      However, we do take your feedback into an account and we will consider how we can assist businesses further.

      If you would like to know more, we would be happy to assist you.

      Thanks,

      Ryan

      • “we are a mid-market solution so there are varied prices depending on the complexities of your needs”

        Ryan, if you start at 3 users as your website says, than you start with very small businesses, even if you also are also pursuing mid-market accounts. In which case give per user price, and offer an enterprise solution that says “contact us”.

        I completely understand not quoting pricing, when appropriate for the solution being offered. But I can look at nearly every cloud expense solution on the market, and see pricing in minutes. For example I can go to Concur which is owned by SAP, and see that their standard small business solution starts at $8 a user. And if I want to get the professional edition, or get into the enterprise offerings I need to contact them. But the $8 at least tells me what their solutions start, and I don’t have to waste my time or theirs contacting them.

        I can also sign up for a trial and receive one in real time.

        I think the real reason companies don’t list pricing and won’t allow trials is they are stuck in the past and trying to maintain control and afraid of competition, and somehow think that getting people to call is going to allow them to close the sale or “control the demo”. You’re going to lose 10 customers for every 1 you gain with that strategy.

        • Feels like we might be straying back into that negative territory again.
          Thanks for your feedback on our strategy but we’re pretty comfortable not doing the same thing as our competitors.
          We like to have a conversation with our prospects, understand their requirements and then explain our pricing methodology (which is based on active users). I think you will find that the business that you referenced actually charges on a per submission basis. This is the very reason we like to have a conversation to make sure that we explain things properly and avoid nasty surprises further down the line.

          • Funny how the concern about “avoiding nasty surprises” only applies to bing open about your pricing, but doesn’t extend to you’re ridiculous savings calculators that somehow manage to calculate how much a company is going to save based on the number of users, without ever having had a convo with a company. Gotta love marketers.

  • Sorry, I didn’t mean to go all negative about a product you’ve put a lot of blood sweat and tears into. When I go to a website to click on pricing and then it’s not there it’s a pet peeve, especially since the verbiage on the page makes it sound like it’s supposed to show pricing. Perhaps it’s just not working properly.

  • Josh, I have the same pet peeve, you are not alone.

    My other pet peeve is programmers, and when a site can not display things correctly it makes me wonder how effective the software can be. When I visit the link it shows I am in the US, but when I scroll down to the sliders it shows cost saving in Pounds Sterling even though the options says, “show me pricing in USD”. And the contact form defaults to the UK. And yet the disclaimer is showing USD for typical salary.

    A lack of consistency and quality control in something as simple as a web site, makes me wonder.

    • I do agree with the pricing thing, Jim. Drives me crazy to not be able to see pricing. As far bugs in the website, I’m a little more tolerant than you, given my years as a programmer. Those kinds of issues are easy to miss when you are the author of a website (or a program). So many variables and paths that the program can take. The real test is how quickly they fix the issue after it is discovered…

    • Hi Jim,

      Thanks for letting us know about the fault with our website, we have looked into this and fixed a small bug on the value calculator so the currency and prices are now correctly displayed based on the current region. We have also made some improvements to our contact page.

      We apologise for any inconvenience.

      Thanks,

      Ryan

      • Ryan, no problem glad to help in some small way, QAQC is always a pain.

        I am curious though, I hope you don’t mind some questions.

        On the payment page, the slider only goes left to 3 claimants, yet in the disclaimer it says the presentation is for one claim averaging $220. Seems like there is a disconnect here.

        The amount saved seems to be based on the assumed average salary (32,401), a 35 hour work week, and an hour to make entries. Is this assuming that it took 3.91 hours to make the entries without this interface, so the time saved is 2.91 hours?

        If the amount saved is based upon that criteria and reflective of 2.91 hours, then that is an hourly rate of around 37/hr. – significantly more than the assumed salary mentioned.

        I’m old, so I usually miss something obvious.

        • Hello Jim,

          The system is designed for organisations with more than 3 claimants as it works on an approval basis. But don’t worry, your arithmetic is not flawed. The calculation actually takes into account a number of additional considerations that are not displayed in the simplified version that you are looking at.

          Just to give you an idea of some of the additional parameters that go into the calculation behind the scenes we have taken into account:
          number of claimants
          average number of claims per person per month
          average salary of staff
          average time for the claimant to complete expense per month
          average time for an approver to complete
          average time for an accounts team to process
          preparation time for tax reporting purposes

          The output calculation is, therefore, an amalgamation of the time saved across the whole business, not just one individual. From a $ value savings perspective the output calculation is not just looking at the hourly rate of the individual but also the savings made for the business from a compliance perspective. The improved compliance stems from a bespoke expense reporting system usually translates to a 15% reduction in expenses because policy compliance can be automated, reinforced and duplicate claims flagged.

          Hope this answers your questions and if you are interested in seeing a demonstration of the system, please let me know.

          Have a great day,

          Ryan

  • Ryan I’ll pass, but thanks for replying.

    Cost savings shown rely on too many assumptions, assumed averages, and do not include the cost of the service. And the disclaimer details don’t jive as I pointed out.

    Thanks for putting up with me though, I wish y’all luck.
    Jim

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