We are entering an era where it is no longer appropriate for businesses to compare or analyse historical data to determine their current business performance. Case in point: Businesses are spending again as the average expense report value is now higher—up 17% compared to 2019— pre-pandemic. What does this mean for your business?
Taken from the SAP Concur Customer Summit in October, we analysed the aggregated transactional spend data of our ANZ customer base to find out more. Key highlights of the findings include:
Travel related expenses are on the way up: Airfare and accommodation as a percentage of spend is close to where it was in 2019 (at around 22% and 14% respectively). Meals, entertainment, and mileage stayed consistent across 2019 to 2022. Office and telecom expenditure more than doubled in 2020 and 2021 – as home offices and the claiming of related expenses became the norm. The ‘Other’ category – all other expense types aside from those mentioned above made up a whopping 40% of all expenditure in 2020 & 2021 – a huge increase from 19% in pre-pandemic times.
Average amount per supplier invoice is rising: The number of line items per invoice has increased, driving the average invoice value up to $11,259 in 2022, a 68% increase on 2019 values. The Payment Times Reporting scheme was introduced and took effect from 1 January 2021 which could see small business suppliers issuing more consolidated invoices on the basis that they have more confidence and visibility over the payment times of their customers. Duplicate invoices flagged has remained constant at 7-8% for the five years to 2022. Invoice values have almost doubled so this poses a more significant risk in 2022 than in previous years.
Recommendation for action
1) Review end-to-end processes, policies and procedures to ensure relevancy for the current and future business landscape.
“We are shifting away from credit card use and more towards cash reimbursement, so having that cycle time reduced so [employees] can get paid as quickly as possible is critical,” said Chris Lancefield, Group Procurement Senior Manager at Ventia.
2) Pro-actively monitoring data (bursting and push notifications) in real time with reporting and analytics is as important as ever. Invest in the tools and processes to re-evaluate the metrics that are being measured and don’t fall victim to data overload.
“Getting that information to make strategic decisions and bringing the insights back to the people rather than just the operational team and help them understand spend trends and patterns is critical,” said Alex Filip, Business Operations Senior Lead at Telstra. Alex highlighted the value of using his company data being captured by SAP Concur solutions.
3) It’s also important to have a strategy around risk mitigation, remove mundane processes and keep the employee experience top of mind. Jenny Vanderhoek, Finance Services Director at Lion, encourages her team to be critical thinkers.
“Looking at your end-to-end process, eliminate the work that you really shouldn’t need to do anymore, and then what’s remaining is really what you should be able to get a system to support you in,” said Vanderhoek. “We’re now able to audit 100% of our expenses, which is very minimal work for our team because the system actually does a lot of that automation itself.”
4) Now is the time to address critical gaps in employee onboarding and training. Only 40% of Australian employees say their organisations provide them the necessary training to keep up with changing regulations – a major oversight as compliance requirements continue to shift. Don’t forget your remote employees – how do they interact with your culture and processes and stay engaged.
Transaction values are rising, and with rising transaction values comes a potential increase in operational, financial and fraud risk. If these areas are a concern for your business and you would like to learn more, visit SAP Concur.