Optimizing Spend Management With a Remote Workforce
Having a remote workforce or providing more workplace flexibility can help companies reduce costs long-term, such as on office space and utilities. However, without careful planning, remote work can create additional expenses and opportunity costs, particularly for those new to this setup.
These expenses can range from clear costs, such as for purchasing work-from-home technology to the somewhat hidden costs, such as operational inefficiencies if companies do not have the right tools and training in place to enable employees to complete all their responsibilities from home.
But with a little bit more visibility into spend and by investing in technology that ultimately saves or helps generate more money than its upfront cost, companies can more readily enjoy the advantages of remote work. In particular, some of the ways to optimize spend management with a remote workforce include:
Gaining Real-Time Visibility Into Tail Spend
When employees work remotely, they may be more inclined to make maverick purchases or tail spend purchases to help them perform their duties. For example, employees might start charging microphones, monitors, project management software and other remote work tools to their corporate credit cards, or they might submit these expenses for reimbursement long after purchasing. All the while, employees may not know whether these purchases come from approved vendors or whether they align with other corporate purchasing policies.
Even if these expenses are valid, your procurement and finance teams should aim for real-time visibility into this tail spend, which can add up over time to make a significant impact on your budget. By knowing what employees want to purchase, you may be able to find efficiencies, such as bulk ordering work-from-home office supplies or having employees come to a consensus on certain software tools so you can minimize the number of vendors you have to manage and obtain pricing at scale.
Using e-procurement software can enable this real-time visibility, as employees can still easily find items and submit purchase requests through this system remotely, and finance and procurement teams then have the visibility to approve purchases and easily track spend. Outsourcing purchasing activities or bringing on procurement contractors can also help to find more purchasing efficiencies from the get-go.
Overcoming Non-PO Invoice Management
Another frustrating aspect of maverick spending or tail spend purchasing can be when your finance and AP teams start receiving invoices for which there’s no matching purchase order. If an employee makes a purchase outside of existing procurement protocols, AP teams may not know about this purchase until they receive an invoice.
And this situation can potentially occur more with a remote workforce, particularly in this current economic environment, such as if companies start bringing on more contractors rather than trying to onboard new full-time employees. As such, contractors might start sending in invoices for which not only is there no matching PO, but the services could exceed what finance teams planned to spend in that area.
That’s why companies need to:
- Give employees the tools they need to easily purchase products and services in a finance-approved way. For example, purchases made through GoProcure automatically generate a PO, which can then be easily reconciled with invoices, as everything can be tracked through this procure-to-pay platform.
- Educate employees on the importance of following purchasing protocols so that non-PO purchases don’t become the norm. Employees may be unaware of the headaches they can cause AP teams by making rogue purchases. If need be, you could consider implementing incentives, such as providing gift cards or time off to employees if they, for instance, go a whole month without making any non-PO purchases.
Adapting to Changes in Usage Patterns
In addition to these process changes that can help improve visibility to reduce unexpected costs and risks, companies with a remote workforce can optimize spend management by adapting to changes in usage patterns that result from employees being in the office less.
For example, you may have high monthly telecom bills, both for in-office systems as well as for wireless plans for employees. Yet because employees are working from home more, those in-office systems may be going underused, while their cell phone usage may be skyrocketing, as they use their mobile work phones more at home. As such, you could be overpaying in some areas for underused and incurring excess fees for going over your allotments for wireless plans.
In other cases, you may be able to reduce mobile phone costs if you have wireless plans primarily for employees who travel, yet now their trips appear likely to be limited for the foreseeable future. By limiting features such as international roaming plans, you could save money. GoProcure’s Mobile Management Program can help you analyze your wireless costs and save around 20-40%.
Beyond telecom bills, changes in usage patterns can also apply to other ongoing costs, ranging from office space rent to cleaning services. You may need to up your budget for cleaning services as offices re-open, but you may be able to more than offset that cost by moving into a smaller office space when it comes time to renew your lease. Having a clear way to track all your spending can help you analyze opportunities to reduce costs based on your new usage patterns.
See How You Can Optimize Your Spend Management
With the right spend management tools and protocols in place, working remotely can save companies money while enabling employees to be productive. Using e-procurement/spend management software can give your procurement and finance teams the visibility needed to stay on budget, while also making it easy to manage approval workflows and invoice management from anywhere.
Plus, as your organization adapts to new usage patterns while working from home, you can find opportunities to save money. Having strong talent and processes to source products and services, along with adapting purchasing to fit usage patterns in this new remote environment, can also help you optimize your spend management.
Request a free consultation with our product experts today to learn more about how leveraging e-procurement/spend management technology can help save money, reduce risk and make remote work productive long-term.