Often, finance teams group travel and expense items together in a single policy, since they are both circumstances where employees spend company money. Travel and expense (T&E) policies are rules that your company has laid out to guide employees as they plan their travel and spend money on work-related expenses. A key part of these policies is the reimbursement program a company has in place to pay employees back for any purchases made out of their own pockets. Typically, a policy should explain everything from saving receipts to filling out a mileage reimbursement form to receiving approval on reimbursement requests. 

When policies map out clear processes, it should prevent mistakes such as employees being reimbursed for non-work related purchases or out-of-policy purchases. Unfortunately, the reimbursement process is not adequately managed nearly as often as we all think it is, and employee spending habits have taken advantage of this oversight. 

We can all likely recall a time someone we know – or even ourselves – has made an out-of-policy purchase and let the company pay for it, so we may be wondering what the big deal is. How much of a negative impact does an instance of policy non-adherence have on finances? Well, when enough employees do it, it can lead to overspending. This overspending drives businesses to either pull from other budgets or cut back on originally budgeted expenses such as planned trips. 

The first step to getting a handle on unauthorized spending is understanding the problem: how often are employees making unapproved purchases, what type of expenses are they reporting and how can a business address these issues. 

Secrets of the Expense & Mileage Reimbursement Form

Is it easier to spend someone else’s money? For some employees the answer is undoubtedly yes. A 2013 survey administered by Coupa Software reported that 66% of employees made purchases that went outside the bounds of their company’s T&E policy. Some popular examples of unauthorized purchases reported were expensive dinners at 38%, office supplies for personal use at 23%, travel upgrades during trips at 22% and smartphones at 18%. 

A separate 2018 survey of employees performed by British company, Soldo, provides some insight into exactly what is happening on an expense and mileage reimbursement form. 27% of respondents reported claiming miles that they never actually traveled and 16% said they altered taxi receipts so the fare appeared higher. Overall, 38% of employees admitted to wrongly filing expenses. 

Coupa’s survey also delved into the expense reporting behaviors of employees. One third of employees surveyed said they have stolen from their employer, 14% by claiming personal expenses as work-related, 13% by accepting a reimbursement for an already expensed item, 11% by increasing the amount they actually tipped a waiter, 10% by submitting a reimbursement request for the same item more than once and 7% by creating a completely fake expense report. 

If there’s any takeaway from all of this data, it’s that unauthorized and fraudulent spending habits are more prevalent than we expect them to be, and there are innumerable ways to exploit the process. There are steps you can take as a business to discourage this kind of behavior and increase financial accountability at all levels. 

Improve Expense Management

When Soldo asked employees under what circumstances they would manage their expenses more closely, 24% responded that they’d be more likely to do so if companies actually enforced their expense policies. While most businesses can say they have guidelines in place concerning travel and expense management, it’s obvious some serious issues exist. In fact, 84% of Coupa’s respondents said they had experienced difficulties when making work-related purchases. 

Policies & Procedures

You may believe you have a very thorough policy that has accounted for every eventuality. However, if the procedures outlined are too confusing for employees to follow, this confusion will make non-adherence more likely. 25% of Coupa respondents said their confusion regarding the expense reimbursement process led to problems making purchases. To address this, 62% of employees believed that companies need to do a better job of providing oversight for expense reporting, and 54% said their employers should maintain better guidelines for travel reimbursements. 

Your policy should clearly explain all aspects of the T&E process: how to track expenses, how to fill out a mileage reimbursement form, how to get approval for unplanned expenses and how to submit expense reports. For particularly long policies, it may also be wise to create an abbreviated version employees can easily reference. 

Easy Reporting

Being such a common occurrence, reporting expenses and submitting reimbursement requests shouldn’t be as difficult a task as it is. Recording expenses using an excel sheet and saving receipts in a shoebox is an archaic way to do things. Work with employees to establish more streamlined methods that will increase the likelihood of accurate reporting and overall productivity. With a simple process in place, the ability to abuse it is reduced and the desire to abuse it also decreases. 

Clear Approval Process

The data indicates that the approval process for an expense and mileage reimbursement form is the most confusing part of expense reporting. 46% of Coupa’s respondents reported that too many levels of approval caused difficulties, but 21% thought that there should be more levels of approval for employee expenses to go through. Still, another 21% said that a formal review process still needed to be initiated. 

All of these contradictory opinions lead to one conclusion: when everyone is unclear on who needs to give approval before a reimbursement payment can be issued, it allows reports with blatant errors and misspending to slip through. Your approval process – no matter how complex it is – needs to be structured to provide a clear audit trail. Between the employee and the finance team, an expense report needs to pass through at least one person, and there should be a record of who, when and what was reviewed. 

Incorporating Technology

Utilizing software and other tools will make enforcing your T&E policy much easier. An app such as SureMileage speeds up reporting of travel and expenses and automates the reimbursement process. Expenses, including the daily mileage racked up from work-related travel, only take a few minutes to submit from anywhere. 

Once submitted, expense reimbursement requests move through your approval workflow. It can be tailored to fit into your business structure. With its ability to be integrated with any accounting or payroll system, SureMileage allows reimbursements to be issued quickly and painlessly for all parties involved.

Technology also helps you enforce your policy by monitoring employee spending habits so you don’t have to. In CompanyMileage’s system, you can set up flags to alert you of instances such as duplicate trip bookings, employees reporting excess mileage and overrides in the system. You’ll be able to catch and address unauthorized behaviors before they cost you money without expending the time and energy in manual examination of every expense and mileage reimbursement form. 

Incorporate CompanyMileage

When the expense process is confusing, that’s when employee spending tends to get out of control. CompanyMileage offers an end-to-end solution for mileage and expense reimbursements that supports your T&E policy at every level. Curb unauthorized spending and save up to 30% on T&E reimbursement expenses. 

To add automated expense software to your process, request a demo with us today!