Lost in Expenses: UAE Companies Unraveling as Complicated Systems Siphon AED 13,206 per Employee

A report by Pemo, sheds light on the challenges faced by employees and entrepreneurs in the region regarding the submission of expenses. The survey, conducted among over 1,400 UAE-based professionals, exposes a significant issue: more than one in five (21 percent) individuals are not submitting their expenses regularly due to the perceived complexity of the filing system at work.

Among the key findings, the report highlights that 24 percent of respondents attribute their irregular expense submissions to a lack of time, while another 21 percent cite the absence of administrative support. The cumulative impact of an inefficient corporate expense management system is revealed to be an average loss of 13,206 AED per year for at least 35 percent of the workforce, a cost often overlooked by both companies and their employees.

Employers, particularly in the SME market, are grappling with challenges arising from incorrectly filed expenses. Lost receipts, inputting errors, and inaccurate submissions are diverting precious resources and time away from business growth. This, in turn, is affecting the overall productivity of businesses and impeding their ability to thrive.

The report highlights that a significant portion of the frustration with expense management stems from the time-consuming nature of the process. Approximately 26 percent of respondents spend an hour monthly on their expenses, while 7 percent dedicate more than three hours. Receipt-related challenges (26 percent), manual expense reports (25 percent), and expense approvals (22 percent) are identified as major hurdles.

Despite the hurdles, corporate spending in the UAE remains consistent, with typical expenses occurring in transportation and taxis (15 percent), hotels and accommodation (13 percent), and flights (12 percent). Many individuals use personal funds for reimbursement (29 percent), while 25 percent rely on company petty cash and another 25 percent use their own company credit card.

The survey indicates that while 51 percent of respondents claim to submit expenses frequently, the process often feels complex. On average, two approvals are required for spend verification, involving departments such as Finance and Accounting, Office Managers, and Human Resources.

Individual autonomy in spending is acknowledged, with 27 percent allowed to spend up to 500 AED before seeking further approval, and 20 percent permitted to spend up to 5,000 AED without prior consent.

The report concludes with a call for more streamlined expense management systems. Respondents express a desire for user-friendly apps capturing expenses instantly (39 percent), easy ways of uploading expenses (32 percent), and tools linked to cards or bank accounts for automatic receipt accounting (16 percent).

Co-Founder of Pemo, Ayham Gorani, emphasises that simple changes to expense management systems, such as providing corporate cards, can lead to a positive shift in the mindset and ensure timely reimbursement for out-of-pocket spend. The report also reveals optimism among employees, with 51 percent believing that an automated spend management system could save them between 1-3 hours per month, and 16 percent estimating potential savings between 3-5 hours per month.

In conclusion, the report suggests that digitalising spend management systems, automating approval flows, and offering real-time cash-flow monitoring can be effective solutions to alleviate the burden of expenses, benefitting both businesses and employees.