Since the COVID-19 pandemic began, organizations continue to see rapid change in employee spend behaviors.
At Oversight, we endeavor to study and understand these shifting trends through customer interviews, market observations and data-driven analysis – all culminating in our Spend Insights Report to provide organizations with an overview of the changing dynamics of employee spend and risk.
As we’ve compiled these reports, one thing remains true – how businesses spend money is changing, almost entirely. And, these changes are sweeping and immediate, especially when the pandemic first began.
For nearly every finance team in America, the world of “business as usual” was turned on its ear. What have we learned from this massive shift? Oversight’s VP of Product Management, Jon Lawrence, shared the five following insights with PaymentsJournal.
- Down is up, up is down. When the pandemic began, travel expenses declined rapidly. This was followed by a rapid succession of other spend activity as organizations prioritized business continuity.
These changes created an “Alice in Wonderland” effect where the traditional traveling employees who often spent the most were suddenly grounded while new spenders came online. With this, spend that is typically deemed “unusual,” like large out-of-pocket expenditures, ramped up, while “usual” spend, like that attributed to marketing event and sales visits, ceased.
- Understand the pattern change. With these new spend patterns come new responsibilities for finance teams who are now digging into policies and current business needs to make adjustments where needed. For example, many organizations are adding a COVID-19 expense type to account for the rise in office supply purchases, grocery store expenses, etc. Others are rewriting policies in response to these shifts.
- Dive into “miscellaneous” and new categories of spend. When workforces went virtual, organizations gave employees nearly carte blanche permission to build home offices, buy computer monitors and sign contracts for better internet continuity. All of these upended how and where companies spend money, introducing new categories of spending, like “miscellaneous.”
- New spenders mean new risk. For those organizations that enabled work-from-home for employees, much of the new spending is likely due to new spenders who have never filled out expense reports or been exposed to compliance policies. This is more than likely to result in mistakes, exposing organizations to a new source of risk.
These organizations should focus risk mitigation on high dollar exceptions and plan to take a closer look at activities in the coming months to identify examples of potentially risky behavior.
- Gain better visibility. For those organizations that already had automated continuous monitoring tools place in place before the pandemic, the pivot into new spending patterns has been more seamless. Organizations that lack that visibility are likely struggling to understand the shifting realities of spend and risk in their organization.
For all organizations, the current pandemic made it more critical than ever to keep up in real-time with changing patterns in employee spend. It’s crucial to understand where new spend risk might lie to mitigate the chance of fraud, waste and misuse.
Ready to learn more about the impact of COVID-19 on employee spend? Check out Lawrence’s full article in PaymentsJournal. For more information about how Oversight helps identify spend risk, request a Spend Risk Analysis.