Governments all over the world have implemented strict lockdown measures to contain the spread of COVID-19, but as a consequence, most organizations have to face disruptions in the form of a new set of operational and financial challenges.
A major challenge that organizations have to face is a transition of the workforce to primarily work from home. As lockdowns are getting lifted slowly, it is increasingly becoming clear many of us would still be working from home. Few large technology companies have already given the option to work from home till 2021. Others are planning to send employees back to the office in batches, with the ones itching to get back going in first. In any case, most employees will likely be allowed to work from home, at least through the end of 2020.
Employees working from home would create new risk profiles. Given this new terrain, many operating guidelines are now obsolete and would need to be revised. This is also applicable to the practice of employee spend management. Here are five ways in which spend management will be impacted:
New segments of employees spending: As the workforce shifts to a "work from home" model, large pools of employees would start using the expense management system to reimburse purchases needed to set up a remote workspace. These employees may be unfamiliar with the reimbursement process and may not have corporate cards. Finance teams need to formulate strategies - from providing training to automating monitoring - to control spend and mitigate risk arising from large pool of employees making purchasing decisions. Some companies have resorted to creating new spend categories specially catering to COVID-19 expenses to assess the budgetary impact and control costs.
The blurring of procurement and T&E expenses: Monitoring of expenses might become tougher in this environment as employees might use T&E cards to make non-traditional T&E purchases. In this environment, purchasing behaviors are less likely to be scrutinized. This blending of spending programs would create a nightmare while monitoring transactions will lead to wasteful expenditure and fraud. The review process could become much more tedious. And, the likelihood of risk going undetected could increase as the line between legitimate and off-policy purchases becomes fuzzy. Many organizations might choose to automate the monitoring process or choose a "one-card" policy to adapt to shifting trends.
Expansion of e-procurement: Organizations might choose to introduce or expand their existing e-procurement programs. These programs will have companies get better visibility into spend. Employees would be directed to buy directly from the preferred vendors through the catalog v/s making payments through T&E cards. This would be a viable option for organizations that prefer not to widely issue corporate cards or manage large volumes of cash expense reimbursements.
Policy revisions: As companies adapt to the changing business environments, organizations would need to regroup and change or update their policies based on employees purchasing needs while also balance it with organizations' business risk.
Rise of misconduct: Most experts believe that there is a direct co-relation between periods of economic uncertainty and the rise of frauds. Employees working from home create a new risk profile in at least three distinct but simultaneous ways — personal conflicts of interest, data protection, and compliance training regimes. The situation with the pandemic and a sudden shift to WFH has a tremendous effect on behavior – with normal ways of working and daily routines gone, as well as the accompanying sense of security.
Robana is a T&E Audit Automation product that audits 100% of a company's expenses, in real-time, reducing time & effort in management approvals and Finance team verification prior to reimbursements.
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