An outdated expense management process is leaving some U.K. workers in debt.
By Zee Johnson
U.K. employees have long had drawbacks when it came to the expense management process, but now with inflation up and the economy down, the friction between employee and employer is being felt more than ever.
Soldo’s Cost of Business Crisis report found that 72% of respondents use their own money to pay for work-related expenses and say that this practice has negatively impacted their personal finances. Sixty-seven per cent say they pay for work-related expenses with their own money at least once a week, though 61% say they feel anxious about this at least some of the time. And for more than a third (36%), this added up to £100 or more in November 2022.
When inflation increased 9.3% from November 2021 and November 2022, 58% of respondents said their spending did too.
The survey also revealed that employees are dissatisfied with their organisation’s expense management process, as many are facing cash flow issues and suffering financial and mental hardships. This comes as a result of having to use their personal funds, the excessive bureaucracy required to get their money back, and long reimbursement times, respondents say.
But lower-level employees aren’t the only ones feeling the pressure. In fact, those in the highest income bracket (earning £70,000 and over) felt the increases most, with 46% reporting their out-of-pocket expenses “increased significantly” compared to 25% overall. Further, six in 10 respondents, including people whose incomes would’ve categorized them as “comfortable,” say they’re struggling to keep up with expenses.
The top three business expenses for respondents were food and drink (55%), fuel (45%), and plane tickets, accommodations, and other travel-related costs (36%).
Survey respondents who said they felt anxious about out-of-pocket expenses always, often, or sometimes gave three reasons for their anxiety.
- Process issues, including difficulty submitting receipts or determining whether a particular expense is allowed by their employer.
- Delays in payment which subsequently interfere with other financial obligations.
- The amount of paperwork when filing a reimbursement claim.
For an easier expense management process, respondents said they wanted less bureaucracy, more transparency, and more fairness.