by Staff Reporter

According to respondents of the ‘American Express Spend Psychologies’ study¹, the UK average monthly expense claim now stands at £119, or £1428 a year, however there are substantial differences in expense claims throughout the regions. Employees in London say they claim less than anyone else in the UK (£95), whilst the North East has some of the highest claims in the country, averaging at £140 per person.

Top line findings from the research, conducted by independent research company Loudhouse who questioned 500 SME individuals in the UK who claim expenses in their job, include: almost half (48%) believe they are claiming more expenses now than a year ago (particularly in the manufacturing sector); and only half of companies (51%) have a formal expense policy in place

• 60% of people are able to claim expenses without receipts at least some of the time; 
• Only 14% of workers admit to having exaggerated an expense claim;
• Nearly a fifth (18%) think it is acceptable to exaggerate expense claims;
• 61% think that people get more lax with expenses the longer they have been with a company.

Escalating Expenses
Almost half (48%) of employees believe that they are claiming more expenses than they were a year ago. This varies significantly across business sectors, with the financial services industry leading the way in cost reduction. In comparison, manufacturing companies have some catching up to do as nearly three quarters (74%) of employees are claiming more expenses now, than they were a year ago.

Expense Mismanagement

As expense claims rise, only half of companies say they have a formal expense policy in place. This differs widely depending on the size of the company, 68 per cent of larger organisations with more than 500 employees have a formal policy for claiming expenses, falling to only 25 per cent amongst companies that employ less than 20 people.

The report also revealed that the majority (60%) of workers are able to claim business expenses without a receipt and 62 per cent of workers have never had an expense claim queried.

“It is important that companies understand the value of implementing a formal expense management programme”, says Brendan Walsh, Senior Vice President, American Express Commercial Card. “By monitoring and analysing employee spending, businesses can piece together a complete picture of company expenditure and therefore begin to negotiate better deals with suppliers, as well as stamp out any unauthorised spending.”

Out of Pocket, Out of Favour
Over a third of people believe that their company’s expense claim process has left them out of pocket, a trend more prevalent amongst higher value claims. It’s not surprising then that nearly three quarters (74%) resent having to personally pay for business expenses before claiming the money back.

Walsh comments, “Companies with a fully implemented Corporate Card program not only benefit from control and savings but also don’t leave employees feeling out of pocket.”

Spend Personalities
Despite the majority of UK workers claiming that they would treat company money the same way, or even more carefully than their own, 79 per cent contradicted themselves when putting their attitude towards company spending into practice.

The ‘American Express Spend Psychologies’ report identifies three very different spend personalities amongst UK employees when spending company cash.

• The majority of employees (60%) would put themselves in the ‘sensibles’ category believing that their attitude towards spending is exactly the same, whether they are spending their own money or that of their company.
• Only 15 per cent admit to being work ‘spenders’, spending more than they normally would if the company is paying.
• A quarter of workers claim to be ‘savers’ and are more careful when spending on behalf of their company, declaring that they would actually spend less of the company’s than they would their own.

Brendan Walsh, comments further on the findings: “This attitude of employees towards spending company money clearly demonstrates the need for businesses to take tighter control over their expense management policies. It is understandable that employees will sometimes have differing attitudes to spending the company’s money, however employers need to encourage policy compliance amongst employees to make savings.”

Interestingly, when asked about specific behaviour, 63 per cent of respondents who described themselves as ‘sensibles’ when spending company cash displayed ‘spender’ tendencies. For example, they admitted that they would be more likely to spend on a £40 taxi journey if the company was paying. This is particularly evident in the 25-34 years age group (85%) compared to over half the 55+ group (56%) who would pay £40 for a taxi journey on company money. More surprisingly, 69 per cent of the identified ‘savers’ would also behave in this way.

Although the majority of respondents display a ‘spender’ attitude towards spending £40 on a taxi journey, 82 per cent of employees believe that falsifying expense claims is unacceptable and only 14 per cent admitted to having exaggerated an expense claim in the past.