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Is Smart Card The Future Of Business Expenses?

Automating your employee’s claims is possibly one of the best things you can do to save needless time and cost for your business.

Picture this: You’re buying an item for a company event or have a business expense that you have covered. With different documents and receipts, the claims process becomes an elaborate back-and-forth dance with your manager and HR. You eventually get reimbursed, a full fourteen working days and seven emails later.

The reason why reimbursements take so long is that the process is inefficient, it is outdated, and a relic of the paper age. Now, imagine that you’re in HR or in the management of a medium-sized company of 500 employees. Manually checking and justifying each business expense of your employees is not only laborious, but it diverts the man-hours that could be allocated elsewhere.

The pitfalls and traps of employee spending

A manual reimbursement workflow, while tried and tested, is inefficient and time-consuming. There are risks and challenges involved, and it is important for business owners to know the pitfalls to avoid them.

Expense fraud

The lack of visibility and control over an employee’s spending is often the loophole that employees take advantage of to commit expense reimbursement fraud. An Association of Certified Fraud Examiners report in 2018 revealed that in cases of expense fraud, 55 per cent of employees created fraudulent physical documents. Only 15 per cent of frauds are caught by internal audits, and 13 per cent are caught by management review. Expense fraud accounts for 14.5 per cent of all total fraud uncovered.

Human error

For companies who are juggling emails or messaging app threads to get their claims approved, mistakes such as typos and incorrect documentation are not rare occurrences. In 2020, Citigroup blamed human error for sending almost USD$1 billion to Revlon Inc’s lenders, and since then, both groups have been embroiled in a lawsuit.


With a lack of clearly defined budgets assigned beforehand, employees will utilise a more laissez-faire attitude towards purchasing, which often leads to overspending. It is important to note that when employees overspend, additional funds need to be allocated from elsewhere, leading to more paperwork and time being wasted. In one case, an employee spent USD$1,250 on branded coffee mugs “to boost team morale” and had their expense reimbursed.


The reimbursement process is often needlessly laborious since it requires multiple layers of processing and approval. In a Zeta Employee Benefits survey conducted by Nielsen, which included 194 companies and 1233 employees, 47 per cent of participants said that invalid and/or illegible receipts were an issue, with a further 19 per cent and 15 per cent, respectively, stating that receipt storage and verification were issues as well.

Out of all the companies surveyed, 94 per cent used hardcopy, paper processes whilst only six per cent adopted a fully digitalised method. Additionally, in the UK, 50 per cent of small and medium-sized business owners claimed they focused more of their time on managing expenditures than on growing their company.

Employee Satisfaction

For larger expenses, the claims require even more time to verify and process. An employee’s account typically receives payment nine days after filing an expense report, and this processing takes longer the larger the firm is. There is a positive correlation between the length of a claims process and employee frustration and dissatisfaction.

In short, too much time is spent in the routine of checking and processing employee expenses, especially if the amounts are immaterial. There should be a direct, streamlined, and effective process that doesn’t consume needless working hours.

Smart cards will be the next pillar of the digital finance evolution

The proposed solution would be the effective allocation of funds and the simplification of business purchases through smart cards. Smart cards are devices that have embedded microprocessor chips in them, providing an extra layer of security for users and enabling them to store and process data.

In the context of business transactions, smart cards are commonly used as credit, debit, and charge cards. Employees utilise the card by paying for business expenses, inserting it into the card reader at the store, wireless transactions via the RFID chip inside, or entering the card’s details online for purchases and transactions.

Firms utilising smart cards can better monitor and control their employees’ spending. This allows employers to trace and see transactions in real-time on a centralised dashboard instead of awaiting a credit card statement at the end of the month.

The smart card is available both digitally and physically to facilitate purchases. Each time an employee uses a smart card to pay for an expense, the transaction can be tracked by the employer or the finance team. With smart cards, businesses can gain not only better visibility but also better control over employees’ spending.

Smart cards protect your business

Expense fraud is not a rare occurrence for any organisation in Singapore. Only in June this year, a former research fellow at the National University of Singapore was convicted of forging expense claims and cheating the institution of US$39,500 between 2010 and 2018. This is only one of the cases that have been made public, many are still hidden and undiscussed.

This is why at Spenmo, we work with our clients to improve employee expense management by improving efficiency and decreasing overspending. We offer a sense of security in case you may overspend or if an account were to get hacked and spend an excessive amount of money.

We will assist with providing a pre-assigned budget for your employees, eliminating the risk of overspending. Additionally, we provide safety features, such as locking a card to a specific merchant and freezing an employee’s card with just one click when detecting a suspicious transaction.

In the digital age, processes are streamlined and paperless, and there shouldn’t be a reason for companies to stick to older payment processing and claiming systems. Manual reimbursement systems are far too clunky, slow, and inefficient. Businesses need to move from the paper age to the digital age by utilising the technology that’s available to them.

Source: e27


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