Sentiment around expense policies is creating ‘blurred lines’ of understanding within UK businesses, resulting in employee inaction and feelings of stress, according to new data from the spend management provider, Soldo. 

Employee confusion - the overlooked blind spot

The report revealed that whilst finance leaders are confident employees understand expense policies, employees are largely hesitant and unsure of the details, leading to many not submitting expenses and avoiding claiming back personal funds. Key findings include:

• 41% of employees purchase something for work but never claim the cash back.
• 38% of employees avoid spending altogether, even if it could help fuel business growth.
• When submitting a work-related purchase claim, around one in five (18%) employees claim it was rejected

Leaders believe the rules are clear, but employees experience feelings of doubt, hassle and fear of rejection. This blurred line between perception and reality isn’t just a minor example of miscommunication. It results in missed growth opportunities, inaccurate company spending data and employees becoming disgruntled when being out of pocket.

Blurred lines: Different frustrations but shared challenges

From the perspective of UK finance leaders, the biggest frustration relating to employees submitting expenses is the assumption that everything will be reimbursed (39%), closely followed by employees submitting expenses that shouldn’t be covered by the organisation, in their opinion (37%) and submissions being late (34%).

Meanwhile, 23% of employees say that challenging a rejected expense claim is the second most stressful thing they do at work, just behind asking for a pay rise. Interestingly, almost half of employees (46%) would turn to their line manager, instead of the finance department for clarity on what can be expensed. Therefore, policies may look clear on paper but in practice they’re filtered through line managers, which fragments control and oversight.

Sacha Hermann, Chief Financial Officer at Soldo, says: “The results of the report point to UK businesses needing to prioritise clarity in policies, swapping outdated and complex systems with more robust and user friendly spend management policies that give employees the confidence to spend at work, and provide finance teams with a more accurate view of company spending.”

The rising issue of AI powered expense fraud

Fraud has long worried finance, compliance and IT teams, but AI has created a new level of sophistication. Tools like ChatGPT and Midjourney can be used to create fake receipts in minutes and some of those fakes are making their way into real claims. In fact, 74% of finance leaders are worried about employees using AI to manipulate expenses.

Sacha Hermann, Chief Financial Officer at Soldo, says, “Much like other finance leaders I’ve spoken to, I was shocked to discover how simple it is to create a fake receipt. The only way to prevent this issue is to tie every digital payment to the expense report, ensuring it is auto-tagged, traceable and visible, empowering finance teams with confidence and control.”

AI is evolving at a rapid pace, with many outdated expense systems simply not fit to identify AI generated fraud. The only way to tackle the threat of AI, is for finance teams to harness the technology, implementing the correct tools to identify fraudulent activity in real- time.”