How to manage hybrid working spend

The 2023 hybrid working trends and what they mean for your company

Hybrid working is a term we've all become familiar with since the pandemic in 2020. This trend rose in popularity in January 2021 after many of us became used to working from home, and we'd started trickling back into the office.

Data from a recent TravelPerk report reveals a 47% drop in companies expecting employees to work entirely on-site. And suggests that 40% of employees now embrace a hybrid work model.

But despite its many benefits, hybrid working also comes with some pitfalls. For instance, how do you manage corporate expenses efficiently when people aren't working from the same place?

The challenges of hybrid working

According to the TravelPerk report, employees enjoy the following aspects of a hybrid working model:

• 46% say they enjoy not commuting as regularly
• 27% say it's positively affecting their physical and mental health
• 43% say they have a better work-life balance

And what are some of the hybrid working complaints?

• 23% of employees felt disconnected from their team
• 21% say they need more face-to-face interaction
• 17% say team communication has decreased

It seems companies are faced with balancing the good with the bad — employees enjoy the flexibility it gives them. Still, many struggle with feelings of isolation, disconnect, and a lack of communication.

Effective stakeholder communication is vital to sustainable business growth. Poor communication has a domino effect throughout organizations. When it comes to managing spend, it can lead to problems like limited visibility over spend and a high cash burn rate, which could lead to significant cash flow problems.

To manage enterprise expenses effectively, you need to maintain accurate financial records, streamline expense and spend procedures (no matter where your employees are spending), and forecast and budget to keep pushing for that competitive advantage. And this all stems from improved communication strategies.

How expense management can support hybrid working

Hybrid working means that workers are often in and out of the office. And the TravelPerk survey found that 22% of employees were required to go to the office at least three times a week.

That’s a lot of coming and going to deal with, so you want to make sure that you have the right expense tracking processes in place. With strong hybrid working policies and supporting tools, you won’t have to rely on managers being present to sign off expenses or fund requests. Instead, you could do it through a flexible, cloud-based solution that can be adapted to suit your new working environment.

Don’t leave it too late to question how your expense management processes will fit into hybrid working.

Here are three ways, in which hybrid working has impacted expense management:

1. Custom expense categories — Hybrid working means employees are often purchase home office equipment. Custom expense categories built for this help ensure all corporate expenses are correctly accounted for.

2. A chance to cut costs — Many businesses use the hybrid working model to cut expenses like utilities and office rent. Data shared by Fortune says 82% of CFOs think hybrid work is a more affordable business model.

3. A new way of managing expenses — With teams working from both home and office, companies need to review policies and procedures to ensure compliance and prevent fraud. Companies will therefore benefit from automating rule-based tasks to minimise human intervention, including Accounts Payable, OCR receipt capture, and expense data reconciliation.

3 Steps to effective finance management in a hybrid working environment

With hybrid working, you can’t rely on employees submitting expense data from the office. Waiting around until they clock in only causes delays in reimbursements, and disjointed processes equals lower financial visibility.

Step #1: Communicate financial policies effectively

Communication is crucial, particularly in a hybrid working environment. You must adapt to new communication methods, whether through project management software, email, video calls, or a mixture of all three. Finding a process that works for your organisation is vital.

When you’ve found communication channels that work, update employees on your expense policies.

Clearly communicating your financial policies and the expectations you have of them means everyone is on the same page. From understanding how allocated budgets work to capturing and uploading expense receipts.

Step #2: Foster a cost-conscious culture

Cutting costs is difficult when you don’t know what’s important to each department. That’s why embracing a cost-conscious approach is key to company-wide cost-cutting initiatives.

Encourage employees to negotiate with suppliers and share their ideas for optimising spend across the company. Consider incentivising this new strategy to help engage employees from the start.

Step #3: Establish a solid hybrid work policy using expense management software

Payhawk supports your hybrid working structure by removing manual processes, which will only get more complex as you fully embrace hybrid working. All your processes must work efficiently to support and enable sustainable business growth.

Here are five ways Payhawk can support you as your business adjusts to a hybrid environment:

1. Centralised expense management

Bring corporate cards, accounts payable, invoice reconciliation, and more under one roof with an intelligent spend management platform.

Using a platform like Payhawk with an integration to TravelPerk means you can streamline your travel expense management process so employees aren’t left hanging around for spend approval. Instead, managers can approve expenses out-of-office, and employees can upload receipts from the mobile app, keeping the entire process frictionless.

2. Real-time visibility into finance data

Our expense management software provides real-time visibility into your company’s spend. This means finance teams can easily monitor spend as it happens, giving you ultimate transparency regarding cash flow. So even if employees make purchases from their home office or on-site, you see it in real time.

3. Integrate spend management with ERP and accounting systems

Payhawk’s direct integrations with accounting and ERP systems help streamline financial reporting and encourage seamless collaboration across departments, which is particularly useful with a hybrid working approach. With all spend data accurately synced, all departments access the same reliable data, enjoying fewer human errors and a more agile way of working.

4. Issue virtual cards in one click

Virtual cards for business are quicker to set up for employees and reduce the risk of payment fraud, card loss, or theft. Issuing virtual cards is helpful when employees are in different locations. By creating spend policies for each card, you can keep tabs on your budget, making forecasting business spend easier.

5. Set spending limits wherever you are

Give team leaders the ability to set spend limits, block ATM withdrawals, and even auto-block cards to avoid overspending. Create approval workflows for different expenses to give teams the autonomy to spend while promoting accountability. This means business spend is easy to track and analyse whether employees work remotely or in a hybrid capacity.

Final thoughts

It’s clear that hybrid working gives employees the flexibility they need to achieve a more sustainable work-life balance. But this way of working also allows organisations to make cost savings and streamline their spend management processes to empower employees, break down departmental silos, and scale up relatively easily.

Wondering how Payhawk can help you streamlining your hybrid working structure? Book a demo to find out more.