One year into pandemic, Oversight releases March 2021 Spend Insights Report highlighting massive shifts in spend and risk
ATLANTA – March 16, 2021 – Oversight, the global leader in spend management and risk mitigation technology, released its March 2021 Spend Insights Report capturing the finance industry’s first full year-over-year analysis of how enterprise spend and risk were impacted during by the COVID-19 pandemic. The report is based on Oversight’s proprietary spend data and reveals how new behaviors and patterns introduced by changed work arrangements have played a significant role in the rise of fraud, waste, and misuse despite an overall reduction in purchase activity.
Key findings in the March report include:
Risk Has Increased Nearly Threefold
A year-over-year comparison of 2019 to 2020 shows that despite a 55% decrease in T&E spend, the spend violation rate increased 292%.
Risky Out-of-Pocket Expenses Have Soared
Out-of-pocket expenses began to escalate in March 2020, increasing as high as 120% of pre-pandemic levels. This spike is likely attributed to an influx of new corporate spenders who paid out-of-pocket for office set-ups and needed to be reimbursed. Because organizations have historically had limited visibility into out-of-pocket transaction data, this type of spend is inherently more risky than company card spend.
Spend Is Shifting to Risky Categories
Spend in two high-risk categories, miscellaneous (non-classified) stores and mail/phone orders accounted for a greater portion of overall spend in 2020 as airfare purchases were down 12X from pre-pandemic levels. The bulk of work-from-home purchases fell into these two high risk categories, which include merchants that sell various wares, including electronics and computer software. Unfortunately, significant quantities of non-compliant purchases were made from these merchants as well. This shift in spend concentration likely explains why risk became elevated almost immediately after the start of the pandemic and continues into 2021.
“It’s been a full calendar year since the pandemic rearranged how businesses operate. Our March Spend Insights Report is a unique snapshot of enterprise spend and risk one year removed from that change,” said Terrence McCrossan, CEO of Oversight. “With this newly-complete data set, Oversight is in a great position to help global organizations plan for and adapt to the spend risk profiles they are likely to see in 2021 and beyond. Businesses can act now to implement the automated auditing, controls and engagement processes needed to reduce spend risk and protect cash flows, regardless of whether that spend occurs in the office, at home or on the road.”
For the full March 2021 Spend Insights Report and other best practices for addressing the changing dynamics of spend risk, visit explore.oversight.com/insight-report-march.
The world’s largest companies and government agencies trust Oversight to find and manage enterprise spend risk no matter where it resides. Oversight’s AI-powered spend management platform monitors and analyzes 100% of spend transactions, reducing audit effort and eliminating data silos. With full visibility into spend, Oversight customers find and prioritize spend risk that would otherwise go undetected. By identifying fraud, misuse and process breakdowns, Oversight reduces out-of-policy spending while maximizing audit efficiency, improving controls and eliminating cash leakage. https://www.oversight.com/