A recent article in The Times in response to the current buzz around the critically acclaimed film The Favourite provides historical context to the film and considers the life of the eccentric queen and her extravagant tastes — the modern equivalent of £11,000 spent on hot chocolate and her donation of £2,250 to a ‘mad Spaniard’ are just a couple of examples of her reckless expenditure.

But amid the flurry of rabbits, absurd dancing and regal tantrums, we might find some interesting behaviours that still resonate today.

Historical documents have revealed that Sarah Churchill, Duchess of Marlborough [portrayed by Rachel Weisz], made it her mission to regulate the Queen’s exorbitant spending habits by meticulously recording each expense and in many cases insisting on the royal sign-off – a trailblazer for modern financial bookkeeping.

Fast forward to 2019 and it’s clear that, unfortunately, excessive expense claims haven’t been erased by time.

The latest MP expense scandal is a timely example of this – Labour’s £180 ‘Jeremy Corbyn MP Calendar’ last March is a modern example of dubious spending. Not quite the hot chocolate trust fund of Queen Anne, but still an arguable amount to draw from the privy purse of today. Equally, claiming for first class travel – something out of parliamentary policy – is again proof that loopholes will always be found when it comes to expense claims.

Regal spending – costly consequences for businesses

However, it’s not just individuals in a position of power that can push the boundaries when it comes to spending.

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By GlobalData

‘Just put it on the company card’ are words that would worry even the most hardened of financial teams, particularly when this expenditure can creep up on them unannounced. Upgraded travel, boozy client lunches and overall opulent spending may not be as prevalent as they once were, but they are still a persistent issue for some businesses. SMEs in particular are vulnerable to this upsetting the balance of incomings and outgoings, something that could ultimately make or break their profit margin.

What’s also at stake is the relationship the company has with its staff. Allowing certain expenses to slip through the grid unquestioned can sometimes be down to goodwill, but often this kindness can be taken advantage of and perceived as weakness. That’s not to say that all employees are out for financial advantage, but there are certainly a few characters who will do their best to benefit from their company’s generosity and trust. It’s difficult with an environment like this to retain a fair and equal relationship with all employees and how they are using their expenses.

A recent survey highlighted the sort of ridiculous expense claims employees have attempted to submit. These included haircuts, home improvements, personal parking fines, alcohol for personal use, and even hotel breaks with the family. However, more often than not extravagant claims like these may be disguised and it’s easy especially for mid-sized companies to let some questionable claims slip through the grid.

The Duchess of Marlborough was right in thinking that the only real way to plug these financial leaks, such as inappropriate expenses, is to monitor and record them in detail so they can be evaluated later down the line before being approved. In 2019, the same tactic still stands, just with a better suite of tools to arm the finance department with.

Digitally transforming finance functions

According to Tatler, Blenheim Palace’s records show that Queen Anne’s outgoings between 1708 and 1711 totalled more than £12m in today’s money. Not too shabby for 3 years’ work.

We’re in a slightly later time period though, and as time passes it’s becoming clearer that automating finance functions will eventually be normative business practice.

It comes as no surprise that the focus of digital transformation projects has previously been the client-facing operations like sales, customer experience and marketing. But aptly applied digital tools for back office functions like expensing and invoicing are beginning to trend among CFOs globally — and rightly so, as automating these elements reduces the likelihood of suspicious expense claims passing undetected and takes the burden off over-stressed finance staff.

According to Deloitte’s Finance Digital Transformations Predictions, activities ranging from budget queries to report production will continue to be automated, data in spreadsheets will be replaced by visually rich information that’s accessible and user-friendly, and the growing expectations for responsiveness and quality from finance teams will increase – piling on the pressure. This is why it’s crucial not to overlook finance technology from annual budget spend.

Increasingly, too, regulatory compliance demands similar to Sarbanes Oxley will continue to require organisations to exercise tighter reporting controls and evidence business-critical processes.

21st century thinking: planning for the long term

Controlling and monitoring financial outgoings still remains a challenge today. Firms need to keep an eye on employees channelling their inner Monarch by splashing out on boozy lunches and upgraded accommodation — both modern expense examples that need ‘reigning’ in.

Ultimately, it’s up to businesses to invest in the modern financial technologies available to spot suspicious spending.

Tools exist that use machine learning, allowing finance teams to monitor and analyse expenses, observe out-of-policy activities and set budgetary expectations on a larger scale. Visibility of all business outgoings can make or break a company, especially in today’s uncertain economic climate, and this would provide some well-deserved assurance and peace of mind for CFOs.

Since Queen Anne walked the earth in 18th century England, the world has undergone several paradigm shifts. The industrial revolution transformed how we work, live and travel, allowing for mass production and mass communication. Similarly, the current digital revolution we’re witnessing now is empowering us to work faster, smarter and more efficiently. However, this can only be realised if our finance functions are fortified and upgraded at the same pace.