For enterprises of all sizes, the current global pandemic is resulting in new spend behaviors. In fact, Oversight’s recent Spend Insights Report uncovered some key changes, including that out-of-pocket spend increased 17% from April to May as employees without a corporate card filed COVID-related expenses.
Spend changes such as these are leading organizations to rethink their business practices and policies. In fact, the shift to remote work has been a key driver of employers pivoting from their normal allowances to accommodate home office setups and supplies.
But this comes with inherent risk. For example, Oversight customers have seen everything from big-screen TVs to soundbars expensed as work from home necessities. One employee even expensed $7,000 for a home office setup.
Oversight’s VP of Product Management, Jon Lawrence, recently shared five key lessons for those organizations evaluating new arenas for spend risk as a result of COVID-19:
- Good and Bad Spending Role Reversal: As airline and transportation activity decreased rapidly in March and April, it was replaced by increased purchasing activity in the high-risk categories of mail/phone orders and miscellaneous stores, which have historically contributed to misuse and wasteful spend.
- Collaboration to Address Risk: As purchasing behaviors change, finance operations teams must collaborate more than ever to navigate the nuances and identify best practices moving forward to make mitigating spend risk easier.
- Rising Spend on Payment Platforms: As reported by Oversight, third-party payments increased by 40% YOY in April as online shopping activity increased due to the pandemic. As employees spend more on platforms like PayPal and Stripe, organizations are exposed to greater risk due to limited visibility into transaction and vendor data.
- New People Spending, New Risk: One thing is always true – risk is a function of people. According to Oversight data, 70% of employees are good stewards of corporate funds; 25% may make errors; the remaining 5% is the segment that may use opportunities like COVID-19 to act outside of corporate compliance guidelines. Organizations should ensure they have visibility into the 5% while continuing to educate the 25% on policy to mitigate risk.
- Align Teams and Tools for Visibility into Spend: With an understanding of how employees are spending, leaders are better equipped to manage and mitigate risk. The right tools provide the visibility needed to help understand and analyze spend – before, during and after the pandemic.
To read more about the impact of the pandemic on employee spend behaviors, read the full article at Risk Management, and for more information about how Oversight helps identify spend risk, request a Spend Risk Analysis.
