Inappropriate spending: how to avoid ridiculous expense claims
Have you ever received expense claims for spending that’s clearly out of budget? Do you feel like your employees are taking advantage of company credit cards? Clear expense policies are key to fostering a trusting relationship between employee and employer. To avoid arguing with people about inappropriate expense claims, control the spending before it happens. Through the use of virtual business cards you can restrict how much, by who, where and on what the money can be spent.
This was just one of the areas that superstar panellists Daniel Kniaz (DiviPay CEO), Jacqueline Purcell (CFO, Deputy), Ashley Davies (CFO, Slyp) and Ben Watiwat (VP Finance and Operations at InDebted), explored in the CFO Series webinar: How CFOs can Harness Fintech to Drive Digital Transformation and Growth.
Host James Solomons (CFO at Xref) also led them through complex areas, including how finance teams can work remotely and asynchronously, the great rebundling of financial products, the ideal CFO tech stack, the Australia talent shortage and employee wellness. They had an interesting discussion about the future of fintech, including using digital solutions to eliminate bad spending.
The webinar speakers shared anecdotes about expense claims they’ve seen throughout their careers that were clearly out of budget!
- Jacqueline recalled employees who expensed back exorbitant premium airport parking, as well as dinners at some of New York’s finest restaurants.
- Ashley remembered staff who chose to take very pricey taxi rides into Tokyo – where employees were expected to get public transport because the taxi ride could cost up to $500!
- And Ben shared his experience of receiving an entertainment expense that was clearly not for work-related entertainment!
Survey findings on ‘bizarre’ expenses
Earlier this year, DiviPay conducted a survey and asked: ‘What is the craziest or most bizarre purchase an employee has ever made on your company card?’ Some of the answers were so inappropriate they can’t be repeated, but it’s a good indication of the type of bad spending behaviour the speakers were referencing in the webinar.
Responses included ...
Stop bad spending before it happens
CFOs and finance managers need to turn expense management around so employees simply can’t spend money outside of budget controls. The way to implement this type of strict – and far more efficient and cost-saving – expense management, is to use virtual business cards.
With a virtual business card like DiviPay:
- Finance and business leaders agree on budgets, and these budgets are clearly conveyed to all staff members. Ideally, this sort of important information will be communicated across a few different channels and stored somewhere that is easy to access – that way, no one can say they aren’t aware of the organisation’s spending rules.
- Finance controls the purse strings. By loading the budget onto virtual business cards, and allocating the spend to set budgets, finance is the team deciding when to disburse the funds, rather than having to react to spending (and the subsequent reimbursement request) after it’s already happened.
- Exceptional spending is at finance’s discretion, and it becomes a case of asking for permission rather than forgiveness. This helps finance and employees avoid many awkward conversations about inappropriate purchases, because people are far less likely to ask for that expensive taxi ride ahead of time (knowing the answer will be no), than they are to go ahead and pay for the fare and then ask for a reimbursement.