UK employers wasted a huge £692 million last year because employees and their line managers failed to interpret the company expenses policy correctly.
According to a study conducted by travel and expenses company Concur, for every £100 that businesses paid out in expenses last year, nearly £9.85 was spent on items such as business class tickets for short-haul flights or rooms in non-preferred hotels that were outside of the corporate expenses policy.
But only 1.2% of these out-of-policy submissions was actually caught and rejected by the person who was supposed to monitor and approve them.
David Vine, a senior director at Concur, said: “Whilst there’s no question that UK companies understand the importance of having a policy in place, some are clearly struggling to ensure it is properly understood, implemented and followed by their staff. This inevitably leads to inefficient spending, lost money and inaccurate forecasting.”
But there were some positive signs that greater rigour was starting to be applied to the expense management process in 2011 compared with the previous year. In 2010. only 89% of VAT-recoverable claims were supported with a valid receipt – something that is necessary in order to claim the money back from HM Revenue & Customs.
Last year, however, the figure rose to 95%, with the most significant shift occuring in relation to mileage claims, although it remained "a problem child".
