Paying out-of-pocket costs: 92% of employees are covering business expenses with personal money
The future of work is here. Or is it?
While we may have made leaps and bounds when it comes to automation, adopting artificial intelligence and even embracing permanent remote work, there are still some areas of business that are stuck in the Stone Age — we’re talking about expenses.
With hundreds of lost receipts, endless back-and-forth chasing and mountains of paperwork. Manually dealing with expenses isn’t just tedious, it’s costing your team and the company.
We partnered with YouGov to find out how 3,096 business decision-makers spread across Sweden, Denmark, Germany, Spain and the UK handle employee spending with a company size of 20 to 1,000+ team members.
92% of employees are still paying for business expenses with personal money
This result is pretty jaw-dropping. And it doesn’t stop there...
Regardless of job title, location, salary or contract type, no one on your team should be carrying the financial burden of paying for things they need to do their job. Be that a subscription, software or just a cup of coffee.
Manually dealing with expenses places almost all of the responsibility on your team — from getting approval to making a purchase to accurately entering all the data to potentially chasing for any late reimbursements. They’re busy enough without having to worry about breaking even at the end of the month…
Paying out-of-pocket is the most common form of payment for business expenses in the UK
Although all the markets that we surveyed admitted that having employees pay with their own money is a common procedure, the UK took the lead when it came to having out-of-pocket spending as the standard form of payment for expenses.
But why is this an issue?
Well, a separate study by Barclaycard found that workers in the UK lost out on £962 million in 2018 because of misplaced receipts and other unclaimed costs — this works out at £123 per person.
In 83% of companies, less than half of the workforce has access to company credit cards
Folloiwing this, just 2% of companies said everyone has access to their own company card…
So, we’ve established that having your team pay out-of-pocket leaves your team at a disadvantage, to say the least. But this method of payment also leaves blind spots for your company when it comes to spending oversight and budget forecasting.
This report also found that 28% of companies have faced financial loss because of manual expenditure management.
But we know cards can’t cover everything…
In an ideal world, it’d be cashless. But business spending comes in all different shapes and sizes, and sometimes a company card doesn’t quite cut it — you know, things like mileage costs, reimbursing employees who had to dip into their own pockets and taking account of work cards accidentally used for personal purchases.
1/10 respondents said they’ve changed jobs due to their manual expense system
Not only is paying out-of-pocket costing your team, it could also cost you your team.
Stress is one of the leading causes of why people resign. And what’s more stressful than waiting to get your money back? And not knowing exactly when that money will be back in your pocket? Regardless if it’s £10 or £100, everyone’s financial situation is different.
And then there’s trust. What says ‘we trust you’ more than handing your team their very own company card?
Having trust in the workplace is central to a positive work environment. Better still, employees who feel trusted by their manager are 110% more likely to stay in their job than those who don’t.
Now, let’s get that 92% significantly down….
It goes without saying: no one should be paying with their own money for the things they need for work. But that’s exactly where Pleo comes into its own…
We offer smart company cards, giving admins full control over who on the team gets a card and what individual spending limits should be. And it’s a win-win situation for everyone. Not only does this mean clearer oversight on company spending for your finance team, but it also means your team feels trusted to do their best work.
So, why not book a demo today? Your team will thank you for it.