The ‘Pay and Reclaim’ expense method is putting financial strain on employees.
Employees are missing out on entitled expenses because of the stressful ‘pay and reclaim’ process whilst employers are suffering because employees cancel meetings to avoid the upfront expense pay-out.
According to the new report: Out of Pocket Employees, produced by fuel and corporate credit card provider Allstar Business Solutions – one in four employed adults have postponed or cancelled a meeting to avoid the personal expense pay out.
This means that in each small business of just 50 employees, twelve of them are guilty of this, whilst in a medium sized business of 150 employees, almost 40 would admit to cancelling a meeting. In a large business of 250 employees, close to 70 people make it a habit.
Pay and reclaim is the most common expenses method whereby employees pay expenses out of their earnings and then submit a claim later. Almost two-thirds (64%) of people described the process as difficult to understand and frustrating, with the average employee having to wait four weeks before their expenses are paid.
When asked if they set aside money from their monthly earnings in case of business expenses, 60% said they didn’t and one in three have felt financially unstable because of an unexpected business expense and/or delayed pay and reclaim. Employees at smaller companies are more likely to feel this way.
More than one in ten employees interviewed didn’t know they can claim back expenses from their employer at all and two thirds haven’t even read their expenses policy.
Subsequently, one in 10 employees unknowingly pays for their own expenses, despite having an expense policy. In fact, one in three never pay and reclaim and 50% of employees surveyed only claim ‘sometimes’. Interestingly, the highest earners are the most likely to pay and reclaim whilst nearly half of employed over 55s don’t pay and reclaim at all.
More than one third (35.8%) claim they just ‘forget’ but the main reason people don’t claim their expenses is because they consider the amount ‘too little’. One in five admitted this, even though they agree that over the course of a month or year these figures do tally up.
Adding to this, 57% of respondents admitted they don’t pay and reclaim if the amount totals less than £5.
The second most common reason is that they can’t be bothered with the admin and one in ten even admitted to feeling embarrassed about claiming.
The Allstar Plus Visa Card gives businesses back the control of their expenses process, saves money with spending caps and reduces administration so staff can focus on more important tasks. Read the full report here to find out more: https://www.allstarcard.co.uk/out-of-pocket/