UK Business Loosens Its Belt, Spending Over £1billion Extra on Expenses, says Concur

  UK Business Loosens Its Belt, Spending Over £1billion Extra on Expenses,
  says Concur

‘Little and Often’ Replaces the Long, Expensive Lunch but £350million is Still
            Leaking Out of UK Business Due to Exaggerated Expenses

Business Wire

LONDON -- May 21, 2013

A report by Concur, the leading provider of integrated travel and expense
management solutions, has analysed expense claims made by more than 200,000
employees and reveals that – despite a tough economic climate – UK business
spent an additional £1.2 billion on expenses in 2012 compared with 2011. The
statistics are a surprise considering the on-going concern about the impact of
austerity in the country and in Europe more broadly.

However, UK employees are being much more diligent in claiming for smaller
expenses, such as food and beverage, in today’s austere environment and are
taking a ‘little and often’ approach to spending. On average, expense-claiming
employees received 10 per cent less in expenses (in real terms) than they did
in 2010 despite making 7.5 per cent more claims. The report estimates that on
average employees made 36 claims and received just over £2,054 each in
expenses during 2012.

Perhaps unsurprisingly considering the instability of consumer spending, UK
retailers have demonstrated the biggest commitment to recognising cost savings
by reducing the amount of cash spent on expenses. Between 2010 and 2012,
retail companies reduced their average expense claim by approximately 30 per
cent (adjusted for inflation).

David Vine, Managing Director, UK SMB at Concur comments: “In a tough economic
environment we see a culture shift in spending on expenses. For example, the
average bill for client entertainment dropped by 20 per cent^1, in real terms
over the last two years, implying that employees are aware that they may be
frowned upon if they act extravagantly. However, a recent study by Concur^2
revealed that the good old fashioned breakfast, lunch or dinner, has the
biggest impact on landing a sale, so organisations must balance spend against
potential sales to grow their business. While we’re not sounding the death
knell for the decadent business lunch, there’s clearly been a trend towards
smaller but more frequent expense claim submissions in the last couple of
years.”

However, there is still much work to be done as managers do not provide a
robust enough challenge towards “out-of-policy” expense claims. A negligible
amount of expense claims are rejected by managers as the report reveals that
over 99 per cent of all employee expense claims are approved, regardless of
whether they meet the business’s expenses policy or not. Indeed, managers
query less than one per cent of all expense claims – hence 94 per cent of
claims are approved regardless of expenses policy compliance.

There is certainly a disconnect between manager and employee behaviour, as the
findings show that almost £350 million in exaggerated expense claims were made
in the UK, in 2012. According to a recent survey conducted by YouGov,^3 over
one in ten employees (11 per cent) admitted to exaggerating expenses claims in
2012 – a 3 per cent increase compared to 2011. Additionally, 20 per cent of
workers surveyed judged it acceptable to exaggerate expenses (again a 3 per
cent increase compared to 2011), and this rose to 28 per cent in the private
sector.

Vine continues: “There is a big black hole in financial visibility that is
costing UK business dear, especially in a business environment where every
penny counts. It’s hardly a surprising situation though when a recent survey
by ^4Amadeus revealed that 51 per cent say they don’t understand their
company’s travel policy fully. Much is still to be done by businesses to
enforce their travel policies and educate their employees about expenses.”

For more information view the:

  *Full Report
  *UK Blog

                                     ENDS

About Concur

Concur is a leading provider of integrated travel and expense management
solutions. Through Concur’s open platform, the entire travel and expense
ecosystem of customers, suppliers, and developers can access and extend
Concur’s T&E cloud. Concur’s systems adapt to individual employee preferences
and scale to meet the needs of companies from small to large. Learn more at
www.concur.co.uk or the Concur blog.

                                    # # #

NOTES TO EDITORS

Concur Benchmark Report - Survey statistics:

ABOUT THE METHODOLOGY

Now in its seventh year, the Concur Employee Expenses Benchmark Report is the
definitive analysis of employee expenses in the UK. Our 2013 report analyses
£725 million of expenses paid by UK - based organisations over the past 3
years.

This huge sum comprises over 12 million individual expense claims, made by
around 200,000 UK-based employees, from a very wide range of organisations in
the private and public sectors.

Our analysis is based on actual claims made by employees between November 2009
and October 2012 that were subsequently approved (or rejected) and paid by
employers using Concur’s expense management system.

This data was collated in association with ASQ Analytics and independently
analysed by Kelso Consulting to give a definitive overview of employee expense
behaviour in the UK. It also provides an accurate picture of how much was
actually paid out in expenses to employees by their employers.

In the report we use the term “claim” to refer to an individual line item on
an expense report. For example, a meal for five people with drinks will count
as one “claim” if listed on one receipt. We also refer to the effect of
inflation in the text and, where we have adjusted for inflation’s impact, we
have used the CPI (Consumer Prices Index).

Numbers in the reports have been rounded. Due to this, sometimes rows will not
quite sum to 100% in some cases.

Average value of expense claims and number of claims approved

           Average            Average number of             Average
           approved           approved claims (by           amount
Year    expense         expense-claimers, per      received in    
           claim value        year)                         expenses (per
                                                            year)
2012    £56.30          36.49                      £2,054.34
2011    £62.19          32.76                      £2,037.31
2010    £62.01          33.93                      £2,104.15

Average number and value of expense claims per employee by sector

                                                Average         Total
                     Average       %            number of       amount
                     value         change       claims          received
                 of an      2010      per          in         
                     expense       to           (expense        expenses
                     claim         2012         claiming)       by
                                                employee        average
                                                                employee
2012                                             
Financial         £78.97     -6.6%     41.9         £3,310.39
services
IT & telecoms     £60.57     13.0%     59.3         £3,593.75
Legal             £55.60     -7.9%     39.1         £2,172.69
Manufacturing     £54.81     2.1%      57.4         £3,145.31
Media,
creative &        £56.49     9.6%      45.4         £2,564.97
publishing
Motor industry    £51.41     -1.8%     21.7         £1,117.14
Retail & FMCG     £48.29     -22.8%    25           £1,205.91
Average           £56.30     -9.2%     36.49        £
                                                                2,054.34

Average value of expense claims and number of claims approved by expense type

                                                          Average                     Average
                              What the                    number                      amount
                              average                     of                          received
                              employee       %            claims         %            in              %
                              spends         change       (from          change       expenses        change
Expense Type    Year    -average    2010      people      2010      (from        2010    
                              approved       to           claiming       to           people          to
                              claim          2012         this           2012         claiming        2012
                              value                       expense                     this
                                                          type)                       expense
                                                                                      type)
Entertaining    2012    £85.61      -8.5%     10.05       -8.1%     £860.82      -15.9%
Entertaining    2011    £91.18               10.45                £952.90      
Entertaining    2010    £93.55               10.95                £1,024.00    

Expense claims (by value) and whether they receive approval or are rejected

           Approved                                                   Rejected,
Year    and         Approved, but      Rejected and       but        
           within         “out-of-policy”       “out-of-policy”       within
           policy                                                     policy
2010    85.8%       13.2%              0.4%               0.6%
2011    86.9%       12.3%              0.3%               0.5%
2012    87.6%       11.6%              0.4%               0.4%

Calculations:

Amount of expenses paid out by companies

*£8.2 billion (2012) - £7billion (2011) = £1.2 billion

Note: £8.2 billion is an approximation based on the survey sample.

^1 Spend on client entertainment from 2010 to 2012 dropped by 15.9 per cent in
monetary terms, and 20 per cent in real terms when adjusted for inflation.

^2 Based on research conducted by Vanson Bourne, March 2013

^3 Based on research conducted by YouGov Plc., December 2012

^4 Based on research conducted by Amadeus, January 2013

Contact:

Weber Shandwick for Concur
Alexia Da Silva
+44 (0)207 067 0639
ConcurUKPR@webershandwick.com
 
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