Matt Clementson, Head of Enterprise UK&I, SAP Concur
As inflation rates are soaring across the world, with it ranging from around 7.9% in the United Kingdom and averaging around 7% across Europe currently, businesses are facing a number of concerns.
According to recent research from SAP Concur, 39% of businesses are struggling financially with the potential impact inflation will have on the future of the business. Following this, 36% of organisations recognise that their business lacks real-time visibility into what is being spent. In the current times of economic turbulence it increases worries about experiencing an unpleasant surprise, like being over budget, once all expenses have been claimed.
What do soaring inflation rates mean for your business
When looking at the future, research reveals that CFOs and finance leaders are placing great attention to budget accuracy as well as cost management and risk mitigation. A comparably easy to control and monitor spend category in this current environment are travel costs and operational expenses. These classifications may not comprise a giant percentage of the business’s capital expenditures, but they do serve as financial levers for managing the business more predictively and intelligently. And this approach can bring CFOs and their finance team closer to the “crystal ball” transparency they want.
However, for many companies, the cost-of-living crisis is showing their expense processes to be inadequate for these challenges. Perhaps one of the most prominent of those challenges has resulted from working from home policies – a relatively new consideration since the pandemic.
A lot of the current expense processes are long-winded, manual, and stressful. It’s these poor user experiences that have prompted a big appetite for automation. Currently, half of employees believe automation would simplify their efforts in claiming expenses. And 51% of finance and HR decision-makers surveyed similarly agree that they’re relying far too much on manual processes which aren’t suited to hybrid working. While it might seem obvious to focus on short-term cost-cutting measures, this article presents three strategic steps that CFOs can take to steer their companies through times of crisis.
Rethink Priorities to get Ahead of Change
When it comes to looking at priorities, its vital to remember that meeting face to face with clients, customers and prospects is still important. However, given the current economic situation companies might need to rethink how they order their priorities and think about the return on investment (ROI) of business travel.
One way to combat this is to ensure the teams are well organised and have everything in place ahead of time. By planning ahead, the finance function can collaborate directly with departments to consider a wider variety of options. For example, business travellers can be given criteria or policies to consider whether an in-person or virtual meeting is most effective or a list of opportunities to interact with additional customers or prospects near the intended location. Rethinking the ROI of business travel will also get companies in a good starting position to tackle other challenges like becoming greener.
Align Actions with Long-Term Goals
Another way to cope with rising inflation rates is to look at aligning actions with the businesses longer term goals. By aligning rapid-fire actions with future-looking strategies, CFOs can help the overall business navigate – and even take advantage – of periods of instability and growth. Something that is particular important in the current climate.
Decisions around travel and expense management are perfect examples of what can be achieved with this level of alignment. While companies shouldn’t cut all travel and expenses, they can guide employees in the right direction with clear policies, real-time insight, and company-wide visibility. This can be done by implementing professional booking tools that support bookings within policy and allowing access to personalised, real-time and interactive dashboards and customisable reports. Ensuring that organisations can manage spending proactively. Having visibility over all of the data also allows for making easy forward looking decisions like negotiating competitive rates with frequently used vendors like hotels.
Invest in People When Transforming Digitally
For years, organisations have increased their capacity to control costs, ensure compliance, and deliver accurate reports faster by adopting a spectrum of technology. Yet, most of these investments are centred around streamlining, improving, and scaling processes, not the employee experience.
Implementing digital investments focused on user and people experience sets the foundation for tool adoption and therefore scalable business growth that is easy for everyone to use. A critical step toward reaching this level of digital maturity is capturing hard data on employee sentiment. Doing so provides insights that can help bridge the gap between what employees expect from a travel and expense program and their real-world experiences. As the employee experience becomes more positive, businesses realise higher productivity, increased revenue per employee, and considerably lower employee turnover.
