In today's economy, many companies are looking for ways to cut costs and be more efficient. This often means having fewer employees or increasing remote work opportunities. The rise of teams working from home, in particular, has helped companies grow, keep people employed and reduce overhead.
However, with these benefits come added financial risks. Employees may be using company funds inappropriately while remotely working or traveling for business purposes by purchasing items not related to their job.
COVID-19 has forced many companies to have their employees perform work remotely. In fact, only 4% of people worked from home before the pandemic. Now? That number is closer to 40–55%.
Why is this important for enterprises? The change to remote working arrangements and restricted travel has increased T&E spend violation rates despite travel and expense spend being down 55% pre-pandemic.
Purchase activity for things like miscellaneous stores (i.e., Amazon) has increased significantly, leaving high-risk categories accounting for a greater portion of overall spend.
This situation has invited more high-risk spend, non-compliance, misuse and fraud. However, there’s no need to panic. There are ways enterprises can gain optimize employee purchasing behaviors and reduce out-of-policy spending in a post-COVID world. Here’s what you need to know about spend risk in a post-COVID world.
Don’t Underestimate the New Normal of Remote Working
Remote working isn’t anything new. However, more enterprises are beginning to deploy remote working because of the pandemic. 47% of employers plan to continue their work-at-home arrangements on a permanent basis. Unfortunately, many businesses are underestimating the potential impacts this can have on spend risk across various channels.
Remote work requires electronics, internet, phones, computers, and other company devices that can be a non-compliance risk. Inappropriate items can be expensed on your company’s dollar for work from home setups when they are completely unnecessary. Merchants sell a variety of items, making it difficult to identify allowable purchases from non-compliant ones.
Your business must monitor spend in high-risk categories as remote work becomes the norm. Remind employees on a regular basis about policies and procedures or have them revised for remote work arrangements.
Remote Working Has a Clear Impact on T&E Spend Behavior
Enterprises are greatly underestimating the risk that remote working creates on travel and expense violations. According to our 2021 Spend Report, there has been a 292% increase in T&E spend violation rates versus before the pandemic.
Airline spend is also 12 times lower than what it was pre-COVID while there has been a 55% decrease in T&E spend across the board. Despite this, the risk continues to rise because of remote working and not being able to accurately track what employees are doing with company finances. In fact, spend for supporting remote work with miscellaneous retailers like Amazon has increased by 7x.
Enterprises Can Take Advantage of Modern Solutions to Address the Risks
Enterprises are greatly underestimating the power they have to address these risks, reduce audit effort, identify misuse and fraud, save capital, and not have to spend excess resources when violations are discovered.
It begins with adopting the right spend management solution. Most popular products on the market only focus on the completeness of an expense report, are single-threaded, and don’t adapt to the needs of each individual company. Analytics and reporting are often limited as well. Many applications only identify past errors, individual incidents, and create multiple false positives.
You do not have to accept the status quo. Software like Oversight provides much more efficient ways to mitigate fraud and misuse, monitor employee behavior, and optimize spend. We are trusted by the world’s most advanced companies including Facebook, Allstate, and McKinsey.
With continuous monitoring and analysis of your spend data, our AI solutions detect patterns of risk and identify habitual offenders so you can take action. You’ll also know when to intervene with the 25% of employees who only need occasional policy reminders. Armed with complete visibility into your T&E spend, you’ll know exactly where to focus to mitigate risk, improve compliance, and prevent financial loss.
Using AI, Oversight analyzes T&E spend patterns over time to reveal repeat offenders who consistently make mistakes, have lavish expenses and conceal personal purchases as business transactions. Leveraging Oversight’s workflow tools, your time can be utilized to focus on more strategic initiatives rather than sorting through data.
Reform your policies based on true issues found within your data. Find opportunities to remove the “grey” in your policies and create a culture of compliance by taking the manual effort required in traditional auditing and replacing it with exception-based continuous monitoring. Using AI and Machine Learning, Oversight makes it easier to spot the patterns you can’t see with the human eye.
In 2020 alone, we prevented $13 Billion in total cash leakages for our customers.
Want to see how Oversight’s AI-driven platform can reduce your company’s spend risk and transform business outcomes? Because you can’t catch what you can’t see. Learn how Oversight can help you streamline your spend risk management and auditing procedures. Schedule a demo today.