In the world of finance and accounting, every detail matters. There’s absolutely no wiggle room for error. But there also aren’t enough hours in the day to do everything that needs to get done. That means finance teams often have no choice but to deprioritize more meaningful (and enjoyable) strategic initiatives.
One of our goals at Retained Learnings is to help finance professionals get ahead of this dynamic and gain more control over their careers as a result. Throughout 2022, we’ve been conducting research with a focus group to better understand common pain points and time sinks. An issue that inevitably comes up is expense management, particularly in remote work contexts.
To help explore this issue in greater depth, we commissioned a survey of 427 Canadian finance decision makers at companies with 15-300 employees. All respondents were members of the online Angus Reid Forum. Here are some key findings.
1. Challenges tracking real-time spending
Finance leaders are increasingly focused on tracking spend and finding opportunities for cost savings. Unfortunately, the reality is that much expense management is done retroactively after the expenses have been incurred.
It’s common for business expenses to be incurred on credit cards, and yet this is an area of spend that is rife with operational bottlenecks.
- 38% of businesses are unable to track corporate card spending in real time
- 36% of businesses have difficulty keeping track of access to corporate cards
- 51% of businesses with remote workforces say receipt tracking has become more complicated
2. Requiring employees to incur business expenses on their personal cards
Whether an employee is traveling for a conference or picking up supplies for a virtual social, most companies are expecting the employee to outlay this expense on their personal credit card and get reimbursed in the future.
Why is this a problem?
- As the economy worsens, individuals are being stretched more than ever – rising interest rates causing higher mortgage payments and inflation causing prices of everything to go up from rent to groceries.
- In addition, 51% of companies with remote workforces agree that time spent reporting expenses negatively impacts their ability to accomplish work.
3. Time spent on closing books and expense reconciliation
As companies look to conserve cash, employee headcount is under extra scrutiny. Finance departments must evaluate all expenses with a critical eye, and look for ways to support the business without hiring new staff.
Expense management is an area that traditionally involves a high degree of manual data entry and time-consuming repetitive tasks.
4. As companies increasingly shift to remote or hybrid workforces, finance leaders need to consider new measures to prevent security risks and operating bottlenecks.
Security and fraud risks are rising across the board. The best way to address these challenges is to address and identify potential issues head-on, before they have a chance to bubble up. Here are some of the problem areas that came up in our research.
- 57% of businesses where employees use their personal credit cards for business expenses also share company credit cards across multiple employees
- 63% of businesses with remote workforces share credit card details over Slack or email (3x that of companies who are not fully remote)
5. Remote workforce challenges
Virtual socials, work from home stipends, the list goes on. As companies increasingly moved to a remote or hybrid workforce during the Covid pandemic, this resulted in new or more pronounced issues around expense management.
The most time-consuming expense reporting tasks for companies that have shifted to remote work are: ensuring expenses are accurate (64%), fixing human errors (56%), tracking down employees for receipts (56%) and manually reconciling and entering data (55%).
- Almost half (48%) of businesses with most or all employees shifting to remote work are seeing increased paperwork from expense reporting
- 30 percent of businesses who have most or all of their employees working remotely use 6 or more different finance software and tools for accounting-related work
The ripple effect of heavy manual expense tracking is that it leaves businesses unable to scale up without increasing overhead. It’s important to tackle expense management issues as early on as possible. Take a look at the full report to help with identifying issues that may be impacting your organization.
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Methodology: These are the findings of a survey conducted by Float from May 26-30, 2022 among a nationally representative sample of 427 Canadian finance decision makers at companies with 15-300 employees. All respondents were members of the online Angus Reid Forum. For comparison purposes only, a probability sample of this size would yield a margin or error of +/- 4.7 percentage points, 19 times out of 20. The survey was offered in both English and French.