Employee Expense Volumes Surge as Pandemic Eased, Leaving Businesses Struggling to Keep up, Reveals Emburse Report

LOS ANGELES AND PORTLAND, MAINE — January 10, 2023 — Emburse, the global leader in spend optimization, announced the findings of its 10th annual Spend Management Trends report today.

The report showed that the number of companies processing high volumes of expenses (500-5000 per month) has doubled since last year, while the percentage of in-policy claims has dropped (only 43% of companies report high levels of policy compliance, compared to 57% in 2021).

The likely reason for the surge in out-of-policy expenses is unmanaged or long-tail spend: 50% of companies said that high-volume/low-cost spend caused them the most frustration out of all spend management processes. The problem was even greater for larger enterprises: 58% put unmanaged spend at the top of their list of problems.

Unmanaged spend includes cloud software subscriptions, programmatic ads, and other recurring expenditures. These costs are below most expense policy thresholds but mount up over time, creating a management nightmare for finance departments. In fact, “managing employee expenses” was cited as the aspect of spend management most needing improvement, ahead of automating AP and purchasing, streamlining data analytics, or minimizing fraud.

“This is our first Spend Management Trends report with a full year of data since vaccinations were rolled out and lockdown protocols lifted and it suggests that the spending trends initiated during the pandemic are here to stay. The demands of remote and hybrid workplaces have pushed spending to the edges of the enterprise, resulting in a rising tide of low-cost employee expenses which threaten to overwhelm finance teams,” said Eric Friedrichsen, CEO at Emburse.

According to the study, companies using manual expense reporting methods have higher instances of out-of-policy claims than those using software-automated systems. Not only did the latter group report improved compliance with T&E policies (38% of those using automation saw this outcome vs 26% of those using manual methods), but it was also more likely to see reduced expense processing costs (51% vs 46%), better working capital management (30% vs 27%), and spend optimization abilities (49% vs 42%). Automation adoptees also use expense systems to inform forecasting (50% vs 31%), making them better equipped to weather economic ups and downs.

Another way organizations cope with the growing burden of decentralized spend is with digital payments. With the pandemic rendering paper check runs impossible for most companies, electronic payments were voted by 70% of respondents as a most-valued feature of spend management. Mobile receipt capture was the second most valuable feature (35%), again reflecting a shift away from paper-based processes - and no wonder since employees losing receipts was the top pain point within expense management, with 49% listing it as a top three problem.

Given the shifts in spending, Emburse identifies three key trends to watch for in 2023:

• Spend visibility at the forefront: To counter the implications of decentralized employee spending, organizations will take steps to increase visibility into all payments made from corporate accounts.
• Policy enforcement problems: With high inflation driving up costs and interest rate hikes increasing the cost of debt, companies will need to invest in ways to manage and enforce spend policies.
• Digital payments takeover: Organizations will continue to push digital payments as a way to reduce costs, increase productivity, and improve the employee experience.

To review the full report, including charts, analysis, and best practices, click here.

About Emburse

Emburse is the global leader in spend optimization. Our expense, travel management, purchasing and accounts payable, and payments solutions are trusted by more than 12 million business professionals, including CFOs, finance teams, and travelers. More than 18,000 organizations in 120 countries, including FORTUNE 100 corporations, high-growth startups, public sector agencies, and nonprofits, count on our intelligent automation, sophisticated analytics, and unmatched spend control to streamline processes, increase spend visibility, enhance compliance, and deliver positive financial outcomes.

Our mission is to humanize work by eliminating manual, time-consuming tasks, so our customers and their teams can focus on what matters most in their personal and professional lives.

For more information on Emburse, visit emburse.com, or follow our social channels at @Emburse.

Methodology

The Emburse Spend Management Trends survey was conducted In August 2022. It surveyed over 500 finance professionals outside the Emburse customer base with a focus on understanding how companies use spend management techniques in light of rumors about an impending recession.