Has COVID-19 effected your expense management?
Shift to an automated cloud-based system today to create an expense policy suited to the post-COVID working environment
The financial impact of the COVID-19 pandemic on businesses has been huge.
According to the Bank of England sales in the UK dropped by 30% during the second quarter of 2020, while, at the same time, employment dropped by 5% and investment by 33%. These figures represent the first lockdown period, from 23rd March. There was some hope that the easing of restrictions from July 4th onward – coupled with government schemes such as Eat Out to Help Out – would ease the situation somewhat.
To a degree this optimism was vindicated by the news that the UK economy as a whole grew by a record amount of more than 15% in September, albeit against the backdrop of an economy which had contracted by 20% since the beginning of the year. This recovery hit the buffers in November, however, when rising cases of COVID-19 prompted the imposition of a second lockdown. It is against this backdrop that businesses are having to consider the longer-term impacts of COVID on the way they operate.
Impact on Business
A survey carried out in September by business insurance specialists, Simply Business, found that the pandemic, was set to cost the owners of small businesses an average of £11,799, with 35% admitting that they’d had to borrow money from relatives.
To a degree, the negative impact of COVID-19 on businesses represents the easily predictable impact of the crisis, but what is more nebulous is the extent to which, post COVID, business practices will be seen to have changed on a permanent basis. The Simply Business survey carried a hint of this change, with the finding that 42% of the businesses responding had become more reliant on technology following the onset of the pandemic. To date these changes have mainly embraced messaging apps (47%), social media (33%), contactless or online payment systems (36%) and online delivery services (25%).
Changes in the Business Expense Landscape
Here at Equisys, with our Zetadocs software, we can see that the changes imposed on businesses by the pandemic don’t begin and end with customer interaction, as outlined above. Instead, they cover working practices, and in particular, the shift to home and remote working which has been triggered by restrictions on face to face interaction. This will have a clear and marked impact on the kind of expense claims which employees are making as well as the overall cost of those claims.
Travel expenses, clearly, will have fallen substantially, whilst expenses linked to working from home – which may have never featured in expense claims in the past – are now likely to play a role in the expense policy of thousands of businesses across the UK.
These expenses might include the cost of equipment needed to work from home – from laptops and ergonomic office chairs through to broadband able to cope with the demand being placed on it – all of which will have to be worked into any existing formal expenses policy.
One of the advantages of taking this chance to revamp the expense policy of your business is that the temporary drop in the number of claims being processed, and the amount of expenses being paid out, offers the perfect opportunity to take a step back and think about the challenges any policy will have to deal with in the post-COVID long term.
One of these challenges will be the changes which are bound to emerge around business travel. Although Zoom meetings and conference calls may have replaced face to face meetings and site visits for the present time, the hope (and expectation) is that travel will play a part in the expenses landscape again, even if it is post pandemic and still delivered in a restricted manner for a while. The crisis facing many parts of the travel industry during the pandemic is likely to lead to consolidation of supply which, in turn, will push prices higher. In addition to this, travel may well, for a currently indefinable period, still necessitate a wide range of safety measures, the cost of which will ultimately be passed on to the end user.
Against this backdrop, travel expenses will probably change in two ways. The first of these is that if travel becomes more expensive, the parameters for actually opting to travel will become much stricter, with the focus being placed on travel which is utterly essential or can be shown to generate income.
Additional Health and Safety
The second change is that the health and safety aspects of travel are likely to incur a host of new expenses which will have to be detailed and itemized if accurate reporting of expenses is going to be possible. We’ve written before about the importance of accurate reporting to effective expense management, and the changes which are currently taking place underline that importance more than ever. An automated system such as Zetadocs Expenses offers the flexibility to either take these changes on board – if systems are already in place – or have them built into the expense reporting from the outset.
As with all other considerations of travel expense systems, these changes have to be understood against a backdrop of businesses having to work with restricted budgets as they emerge from the financial wreckage of 2020, and therefore having to be more certain than ever of the efficiency of the systems they are using.
One of the key drivers for switching to new technologies – as revealed in the Simply Business survey mentioned above – is the fact that existing technologies were found to be inadequate in a time of crisis.
Many businesses, for example, may have found that expense systems based around employees submitting written claims and invoices to a finance department were simply not up to the task when everyone was working remotely.
Alternatively, an existing online system may not have been inadequate when it became the default for reporting and approving expenses rather than simply one alternative. The period between the end of lockdown and the gradual return to office-based work marks the ideal time to introduce systems with the flexibility to cope with the unpredictability of current working conditions.
An Opportune Moment
The switch from a manual to an automated cloud-based system will create an expense policy which is ideally suited to the flexibility of the post-COVID working environment. As things such as travel for business are gradually reintroduced only perhaps to be reined in again dependent upon progress in combatting the pandemic, the expense system of the future will need the flexibility to cope and the robustness to continue delivering throughout.
That’s what Zetadocs Expenses Express offers, and the calm before the storm of a return to the office could be the perfect time to download the free version of the software and find out exactly what it could do for your business and your employees.
To give Zetadocs Expenses Express a free trial, simply complete the contact fields on our page here.