Remember the first time mom gave you money to run down to the store and grab some milk? And you thought, “Heck, milk is cheap. I’ll have plenty left over for a bag of candy – and she’ll never know!”
Yeah, well, she knew.
The story isn’t much different in the big, grown-up world of business, except it’s billions and billions of dollars, and people aren’t trying to sneak a cheap snack, they’re buying home office equipment, ordering in expensive meals (For clients? For themselves? For fun?), and trying to put goodness knows what else on their expense reports (more on that in a moment).
Obviously, the bulk of their spending is legitimate. But with the stratospheric rise in remote and hybrid workers, it’s getting harder and harder to tell how much of their spending crosses the line.
Pandemics tend to ruin everything.
It’s been a rough couple of years, to say the least. And while your team’s newfound freedom has its perks (working from the couch can be comfy), it is much, much harder for you to see how they’re spending your money. So when you get a $1,500 receipt from Amazon, you don’t know if it’s milk, candy, or a home-theater system, which they definitely don’t need for work.
According to a recent SAP Concur Spend Insight Report sponsored by Oversight, corporations’ spend risk has nearly tripled since the beginning of the pandemic, and remote work has become an open invitation to high-risk and highly questionable spending. One customer, for example, had an employee try to pass off a rifle silencer as a work-from-home expense. A rifle silencer.
Anomalies like this might be easy to catch (though that’s not always the case), but how do you know if the $100 gift card you’re paying for is for a customer or for an employee’s personal use? How do you tell if a DoorDash dinner was gifted to a client or devoured by one of your sales people?
This is just plain wrong.
Spend violations are inching up, too. Or skyrocketing, as the case may be. According to the report, T&E spend infractions shot up 292% between 2019 and 2020. And in the confusion and relative chaos that ensued with the rapid shift to remote work, out-of-pocket and fraud violations climbed by 32% and 12% , respectively.
It isn’t all intentional, of course. We don’t all want to squander mom’s milk money. But as more and more employees become corporate spenders – without corporate cards – more and more mistakes are going to happen.
And yes, it matters if it’s accidental or intentional. But at the end of the day, your company’s money is going out the door, and it’s not coming back.
What can you do?
The massive, overnight change we all went through in 2020 demands a commitment to continuous improvement. It requires us as finance leaders to re-examine how we manage spending to make sure the policies and processes we used to count on can keep up with today’s changes and challenges. It means we must find new ways of monitoring employee spend to maintain compliance even when those employees aren’t in the office. It necessitates stronger cost controls and more fluid processes, so that we can adapt the rules to our current reality while making them harder to break.
The SAP Concur/Oversight report weighs in on this topic, too, offering a hefty list of suggested actions you can take to take on spending and its inherent risks – everything from monitoring spend in high-risk categories to expanding corporate card programs to beefing up your audits.
So run on down to the store, grab yourself a treat, and take a look. Then speak with your SAP Concur representative, or contact us, for more.