Paul Holland, Managing Director for UK Fleet at FLEETCOR, writes for PaymentExpert on how to help employees hit by cost-of-living struggles to manage expenses in the best possible way.
As employees meet with increased financial pressures, with the cost-of-living spiralling across the UK, expense policies can ensure that the expense claims staff make are accurate and within expectations.
Since inflation was up around 9.2% by the end of last year, many employees may find it difficult to keep track of the price of their purchases, while some might be tempted to use the increases to try and stretch expenses claims for purchases that should not be included.
However, financial losses can be avoided for businesses if a framework is put in place with expense rules implemented. This will ensure purchases are minimised, nothing is claimed that shouldn’t be, and the business remains cost efficient. Overall, everyone will know where they stand.
Using a card to pay for fuel and business travel costs is a great way to ensure expenses are controlled. It takes the pressure off an employee because they haven’t got to use their own money to pay for work expenses, and then claim it back. So, it removes that cash flow issue, and any awkward conversations down the line about purchases that should, or shouldn’t, have been made.
How to control employee spending
Some may argue that letting employees pay for business expenses such as accommodation and subsistence out of their own pocket and having them reclaim it later is simply the easier solution. However, many difficulties arise as this process often leads to more confusion and mismanagement. Submitting a variety of receipts and claims at a later date makes it harder to understand exactly what was bought, when and for what purpose.
Expense cards can solve many of these difficulties as they allow companies to control what can be purchased in categories such as travel, subsistence and vehicle accessories, and even set daily allowances – all of which can be reported via online dashboards.
Accidental or not, it is critical to prevent employees wrongly purchasing items and expecting their employer to pay for it. That’s why such cards have secure payment methods aimed to limit how and what can be bought. Moreover, online dashboards enable comprehensive reporting that shows both historic and current purchasing trends, as well as every purchase and receipt available for analysis.
Managing electric expenses
Electric vehicle (EV) charging payments is a new area many businesses must deal with when managing expenses. However, it can be difficult to control and also understand, because of the varied nature of charging costs and tariffs, both at home and on the public charging network.
That’s why it’s important to take note of the innovative home charging solutions on the market – it takes the stress of payments for business mileage away from the driver by paying their electricity supplier directly and recording all home charging and payment history through the associated portal and app.
However, driving an EV and charging at home is just one part of the equation. Some drivers might need to recharge on the go. Therefore, when on the road, it’s important to think about adopting a card with a large charging provider network. This will simplify charging payments and supply employers with one consolidated invoice. The result – fleet managers have full visibility of tariffs, payments, energy consumption and home charging sessions for every vehicle. It also means that drivers can focus on their jobs and not on the administrative side of driving their company vehicles.
A win-win for all
The cost-of-living crisis is putting financial pressure on everyone. By giving employees the means to purchase fuel, EV charging and business expenses through cards, you take away the problem of unnecessary purchases going through expenses, as everything is so clearly defined and controlled centrally.
For employees worried about the cost-of-living, there’s the relief that they aren’t saddled with paying for expenses up front, when they can least afford them. Arguably, this means they will be happier with their employers and probably more productive too.
It’s a win-win for everyone: better control over costs, lower risk of mistakes and less stressed employees.