Watch for These Two Business Trends Driving Change in Spend
By now, you’re accustomed to the pains of an ever-increasing list of priorities, and an ever-decreasing budget with which to get them done. In some areas you may be able to get by, but in others, sticking with the status quo can cost you more than it’s worth.
Travel and spend management is one area in which your organisation may be missing out by making do. Whether deciding to automate just part of your expense process, building your own solution, or settling for technology that’s “good enough,” an inefficient, antiquated approach can hold you back – limiting your ability to capture spend and identify trends, causing you to leave money on the table, and opening up your organisation to legal and financial risks.
Now, more than ever, it’s time to rethink your approach. Two key trends are disrupting the business landscape, presenting enormous challenges and leaving your organisation vulnerable to hidden costs like never before:
Purchasing power is in employee hands
Spending that was once under the control of your organisation has now shifted to the employee. Employees are increasingly booking their own trips with airlines and others directly, choosing their own places to stay, and making purchases conveniently right from their mobile phones. In fact, the number of SAP Concur clients using the Airbnb increased 42% from 2016 to 2017, including 63% of Fortune 500 customers. And the reality is, your technology likely isn’t set up to address this change.
When you can’t see all that’s being spent, you can’t control that spending. And unfortunately, you may have more invisible spend than you think. According to an August 2018 study by GBTA, 37% of hotels and 15% of flights are booked outside of corporate channels, while just 20% of companies use technology to capture outside bookings. When you have limited visibility into what vendors are being used, you miss out on the opportunity to negotiate rates and leave money behind. Moreover, as the amount of employees that purchase directly with suppliers continues to rise, so will the amount of cash you’re missing.
Rising tax and compliance regulations
Employees aren’t the only ones changing the way they do things. Governments are, too. Looking for new revenue opportunities, they continue to impose new taxes, make changes to regulations, and are increasing their investigations to crack down on violators.
“Good enough” isn’t going to cut it when it comes to meeting regulations. With more ways and more channels for employees to spend, you have to stay on top of every penny and every supplier. When your organisation is audited, investigators will expect comprehensive, accurate reporting on all transactions. But if you’re still relying on an outdated, reactive approach, your chances of being successful are slim to none – resulting in executive involvement, additional costs, and a hard hit to your organisation’s reputation.
As these two business trends bring change to your organisation, how you approach your travel and spend should change, too. Embrace modern technology that integrates data across all sources, connects you to all your employee spending, captures every transaction, detects fraud immediately and gives the data you need to prove compliance.
To learn more about how to capture and manage ALL your employee spend and mitigate regulatory risks, contact us today.