Companies grapple with what to allow when it comes to employee expenses
With employees expensing everything from masks to ergonomic chairs and monitors, the new work-at-home workplace is causing major companies to rethink their expense policies and decide what kind of costs should be considered reasonable.
“You never know what an employee will ask for,” says Anant Kale, CEO of AppZen, an AI finance platform that helps manage employee spending. “Right now it can be anything from snacks to a desk — it's all over the place. You have to define the rules.”
AppZen, which serves more than 1,700 companies, including Amazon and Chase Bank, has seen an increased need among its clients for transparency and visibility into employees’ spending. The platform tracks expenses by integrating with companies’ finance systems to audit their expenses, invoices, and contracts right after they’re submitted.
Kale shared insight into how companies should be shifting their expense policies to adapt to the new climate, and how AI can help manage employee spending.
How is the new work-from-home workplace affecting workplace purchases?
[The situation] is still new, so what I'm seeing right now is that companies are still reacting and adjusting to what employees are asking for. While travel related expenses are down substantially, work-from-home expenses have obviously increased. But it's hard to classify what should be considered work-from-home expenses, because in some cases employees are even buying masks or cleaning supplies, which normally would not be associated as a work-from-home [expense]. But then in many other cases employees are buying everything from desks, chairs and other things for ergonomic support, and monitors and cables to connect everything.
[Many employers] are still waiting for more data to come in to figure out what kinds of guidance and tools they have to provide. Some employees are asking for internet fees to be reimbursed, when most companies normally state that as a utility. So I think policies are yet to be drawn and absolute rules are yet to be made, because we haven't seen new rules or new policies that companies have put in related to work from home.
AppZen is streamlining expense processes that have historically required deep domain knowledge and human decision-making. How can AI help manage employee spending?
Traditionally, the employee submits expense reports — and they largely cover things like travel, entertainment in a meeting that they had, or any kind of charges that they want to get reimbursed for — which are typically forwarded to a manager who's supposed to look at them and make sure that they're all correct. And then a finance or accounting team looks at it, making sure that they're all right before they get paid out. But we found that in reality, only about 10% of those expenses were really getting looked at, because nobody has time to look through every receipt and they generally just do a sampling.
At AppZen, we used our AI engine to really understand expenses, by training it to look through an expense report to figure out that an employee did spend a lot of money on alcohol, for example. Or maybe they saw some in-room movies in their hotel, or went and upgraded to business class, or they bought a gift card when they went to Starbucks. These are largely the things that were missed by humans when they were looking at expenses, because it just takes too much time and effort to do that. Our AI engine is able to find any spend leakages or misuse, duplicate charges or compliance issues within a couple of minutes, much better than any human can. That allows companies to save a lot of money that they would have otherwise reimbursed or spent. It also reduces the need to manually look through all the expenses, automation makes this process much more efficient.
What should employers be mindful of when rethinking their expense policies due to COVID-19?
Employees need to make sure that their employees are taken care of and that employees are safe. We’ve seen that if employees ordered cleaning supplies, employers are reimbursing them. The employer has to decide if something is a reasonable expense or not, and be consistent about it. Every company has always had some sort of a remote workforce in place, but what has changed is that your entire company is becoming remote. So there cannot be rules which are different for employees who are always remote versus employees who are now remote because of the global situation. At the same time, they have to think about the extraordinary circumstances that have come because of COVID-19. These are related to having a quiet workspace, having flexible hours, or employees have their kids at home. There are so many questions and so many new scenarios that companies have to deal with, and they have to essentially do what is right for the employee and for the company. Companies have to be mindful that what they considered to be fair earlier has to be fair now.