Up to £102.6bn of company spending left unreconciled by a fifth of UK businesses each year

The results of a wide reaching independent survey of 4,000 UK SMEs, analysed in the Soldo Spend Management Whitepaper, reveal costly inefficiencies in cash flow cycles and up to a staggering £102.6bn of company spending collectively left unreconciled every year by 18 per cent of businesses.

Heavy administrative burdens, multiple spending channels creating complex accounting methods and a lack of spending autonomy for employees are contributing to significantly reduced productivity and ultimately costing businesses dearly when it comes to tax returns and reconciliation of spend.

The report also highlighted an opportunity for UK SMEs to utilise new technology and shred the hours that are currently reserved for managing spend, while  simultaneously increasing control over company money.

The survey data, obtained independently via YouGov, reveals wasted administration hours, pointing to a loss in growth potential and highlights overall procedural inefficiencies which, if addressed correctly, could instantly increase productivity.

Key findings from Soldo’s survey data and subsequent whitepaper show:

• 20 per cent of UK SMEs spend a whopping 2 to 4 hours on each purchase decision — time that could be allocated to other billable tasks if more streamlined processes were in place
• More than a third of UK SMEs (36 per cent) complain of cumbersome financial ‘detective’ work at the end of each month to track and categorise business expenditures made by employees on behalf of the business
• 30 per cent of UK SMEs are willing to leave a percentage of company money spent as unreconciled at the end of each month due to the difficulties in tracking and categorising spending
• As a company scales, its spending process becomes more complex: over 12 per cent of companies with 50-200 employees reported spending more than 8 hours on one purchase decision
• Half of all finance decision makers surveyed believe that entrusting employees with prepaid company spending cards would increase efficiency, trust and transparency in the overall internal company financial process

In surveying both employees and financial decision makers, a major pain point revealed in the cash flow process is how employees make purchases on behalf of the company.

49 per cent of UK SMEs expect employees to pay for company expenditures from their own pocket then claim that expense back at a later date. Yet, nearly a quarter (22 per cent) of business owners say they spend between two and four hours of unnecessary ‘detective’ work at the end of each month to reconcile this spending.

From overspending and missing receipts to remnants of travel budgets not being returned and the writing off of unfathomable purchases, the report highlights a significant opportunity for businesses to empower employees with the autonomy to undertake spending independently, while cutting down on the widely reported grievances of employees who are not reimbursed in a timely manner.

An interesting finding considering that employees across the board said that paying for company expenses out of their own pocket and then claiming it back is a major bugbear. One in 10 UK employees said they had to wait more than one week to be reimbursed for expenditures made on behalf of the company. Only 9 per cent of UK SMEs give employees cash ahead of an expenditure.

Carlo Gualandri, Founder & CEO of Soldo, comments: “From these survey findings, it is clear that businesses across the UK are in need of a better spend management solution. The time spent on deciding, entrusting and reconciling company expenditure directly leads to lost revenues and reduced productivity. Inefficient spend management processes are a huge burden for business owners and employees alike, especially as the business begins to scale. By employing the right technology to streamline and fully control company cash flow, UK SMEs stand to increase efficiency, save time and money, and increase positive transparency amongst staff.”