Oversight Report Reveals the Impact of COVID-19 on Employee Spend & Risk
Spend Insights Report Highlights Changes in Employee Spend Behaviors During Global Pandemic
ATLANTA–(BUSINESS WIRE)–Oversight, the global leader in spend management technology, released its May 2020 Spend Insights Report. The second in a series of reports, the findings reveal an uptick in airline spend as well as heightened risk introduced by working and conducting business remotely.
Based on Oversight’s data analysis, airfare spend increased 147% the week of April 6 and continued to climb after hitting a low point the week of March 30. Airline travel is a precursor to travel and expense spending and could translate into an uptick in other spend categories such as auto rentals and lodging.
Additionally, key spend risks identified in the report relate to virtual customer engagement, a second wave of remote work expenses and third-party payment activity – all resulting in continued spend in two high-risk spend categories, mail/phone orders and miscellaneous stores, which includes merchants such as Amazon, Best Buy and Apple.
The report serves as a follow-up to Oversight’s April Spend Insights Report, which revealed how the pandemic swiftly impacted T&E expenditures starting in early March.
“As we continue to monitor for purchasing behavior changes, we’ve noticed a new best practice emerge – different teams within the finance function are collaborating to help steer their organization through this current crisis,” said Terrence McCrossan, CEO of Oversight. “This expedites the identification and resolution of spend risk and helps improve compliance through better policy administration.”
New High-Risk Methods of Customer Engagement
Sales and other client-facing teams are increasing spend on meal delivery services, such as DoorDash, as well as gift cards for wine.com, Grubhub, etc. as a means of engaging while face-to-face meetings remain unfeasible. The average gift card amount is $200, and Starbucks and Uber Eats are the most popular.
This new form of customer relations comes with the challenge of determining if these purchases are legitimate business expenses due to limited visibility into the intended recipient of gift cards or meal deliveries.
Second Wave of Work from Home Expenses
A second wave of work from home purchase activity is evident by the continued spend in mail/phone orders and miscellaneous stores spend categories. In fact, 46% of mail/phone order spend is attributed to electronics, office supplies and equipment. Amazon purchases accounted for 28% of all mail/phone order spend and 11% of all miscellaneous spend.
Many of the online transactions utilize third-party payment platforms, which increase spend risk due to limited visibility into transaction data, including the vendor. Third-party payments increased 43% in April compared to the same period for last year.
Some organizations are restricting payments through third-party payment platforms due to this lack of transparency.
“For any organization looking to mitigate the corporate spend risk in this environment, one of the first critical steps is informing employees of policies of changes regarding approved purchases and spending,” McCrossan said. “With proper education of policies, employees will be able to make more informed purchases within the appropriate channels.”
For the full results and best practices for addressing spend risk, visit https://explore.oversight.com/spend-insights-may-2020.
About Oversight
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 risk 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 by 70% while maximizing audit efficiency and eliminating cash leakage. https://www.oversight.com/
Contacts
Lauren Shankman for Oversight
lshankman@trevelinokeller.com
404-214-0722 ext. 121