Every company has a culture that dictates both how employees spend money for work and how much control finance teams have over employee spending. This is known as your spend culture, and whether or not you’re actively aware of it, your company has one. From day one, the policies, processes and philosophies related to spending have contributed to this culture for better or worse. While that makes it sound like your spend culture is out of your control, it doesn’t have to be.
When it comes to your spend culture, you have two choices: either the culture you want to have will influence how you build your policies and processes, or the policies and processes you have will influence the culture. The first choice is the most ideal, giving you the best chance of cultivating a healthy spend culture. No process has a bigger impact on influencing spend culture than your expense reimbursement process. One way or another, this process touches nearly every employee, so if you’re interested in reshaping your spend culture for the better, this process is the place to start.
The Anatomy of Spend Culture
Your company’s spend culture refers to all of the factors that influence operational spending. These include policies and processes, but employee behaviors and organizational philosophies also play a role in shaping spend culture. How culture affects an individual depends on their role in the company. For regular, non-finance employees, it determines how and when they spend at work. For members of your finance team, it dictates the level of control they have over employee spending.
Several factors affect spend culture:
- Your company’s formal spending or expense policies
- Departmental or team budgets (and how these are managed)
- Employee attitudes towards company money
- Accessibility of funds when needed
These factors can have a positive or negative impact on spend culture. For instance, teams and departments can either have very little insight and autonomy over their budgets or be able to manage them with the help of real-time data. It’s how these factors play out in your company that helps determine whether spend culture will be healthy or unhealthy.
What Does Your Reimbursement Process Have to Do With Spend Culture?
Everything. A well-oiled expense reimbursement process has the potential to give employees the freedom to spend money when necessary without feeling jilted, allows teams to gain more insight into the state of their budgets and helps employees see finance teams as an ally rather than an adversary. On the other hand, when the reimbursement process doesn’t work well, the whole company may struggle with the ramifications.
For your employees: It’s an unfortunate truth that many employees experience cash flow issues due to delays in expense reimbursement processing. If employees know they can’t depend on this process, they’ll be less likely to give away their own funds for work-related items and activities. To add to the frustration associated with this process, submitting a reimbursement claim typically requires completing a time-consuming expense report and hopefully including the right supporting documents. And of course, the worry that a purchase they’ve already made with their own money won’t be approved is always there.
For your finance team: From the perspective of finance teams, as many as 20% of expense reports they receive include errors they must address before they can reimburse an employee. Even if every expense report was perfect, though, finance teams still spend considerable time and energy on the routine parts of expense reimbursement: keeping track of documentation and approvals, reconciling transactions with credit card statements, issuing payments, etc.
For your company: The challenges experienced on both ends of the expense reimbursement process detrimentally impact overall spend culture. When there’s a time lag between employees buying something for work with their own funds, having an expense report submitted and then finally having it processed, it’s impossible for a company to have full visibility into its financial status. Moreover, it pits employees and finance teams against each other. Employees are unhappy with slow turnaround times and feel as though the finance team is policing their spending. Finance teams are overwhelmed by their responsibilities and feel as though they have to hand-hold employees.
No matter how you look at it, a poor expense reimbursement process will result in an unhealthy spend culture. Once you understand this, the path to a healthy culture of spending will be simple: focus on making improvements to the process.
Building a Healthy Spend Culture With CompanyMileage
A healthy spend culture is one in which employees don’t need to worry about whether or not the policies and processes you have in place will actually benefit them. In this setting, they don’t have to concern themselves with the mechanics of spending. Policies are clear, processes are automated and manual data entry has been greatly reduced or eliminated. When employees and finance teams are free of the burdens of an unhealthy spend culture, they’re able to focus on the core responsibilities of their roles and bring more value to the company.
If your goal is to create a healthier culture of spending in your company, CompanyMileage is uniquely suited to help you achieve just that. Our suite of products, SureMileage, SureMobile and SureExpense, allow you to automate and streamline your expense reimbursement process from start to finish. While our expertise is with mileage expense reimbursement, our platform can handle expenses of all shapes and sizes.
Employees can submit expense reports right from their smartphones no matter where they are, and our system automatically sends it through your specified approval workflow. We integrate with all major accounting and payroll software, so once approved, it’s easy to have a reimbursement issued to an employee.
Much like Rome, a healthy spend culture can’t be built in a day, but unlike the Romans, you have automation to help improve processes. If you’re ready to get this tool in your toolbox, schedule a demo with CompanyMileage today.