New world, new corporate spend: Why total spend management is a game-changer for Southeast Asian finance leaders

The introduction of more flexible work arrangements in Southeast Asia’s corporate environment has caused disruption and uncertainty in how enterprises manage their financial reporting. According to a recent survey, 85% of Asian companies now promote hybrid working arrangements, and less than one in 10 Singaporean leaders expect their employees to be on-site all the time.

However, the situation differs in the Philippines and Malaysia, where more than one in five leaders expect full in-office attendance.

While many finance leaders know that a hybrid work model can help their companies save money, it’s also important to consider how it affects overall corporate spend. The new manner of conducting business raises important questions, including: How is your total spend shifting? Do you know how to get your company's bottom line where you want it to be? Do your policies and enterprise applications need to be updated?

Your organization may need to prepare for spend management obstacles and opportunities that a hybrid work paradigm may present.

New challenges in spend management

For many people, business travel is closely linked to career advancement and success. However, during the pandemic, companies had to implement work-from-home arrangements, putting formal travel programs on hold. Eighty-seven per cent of SEA travelers (compared to 80% worldwide) were concerned that the failure to resume travel could hurt them personally.

Companies had to find a balance between travel and technological solutions to foster relationships with new and existing customers and between employees. As such, working from home created new expense categories such as home office equipment, internet connectivity, software licenses, and cyber security tools.

As the rules regarding lockdowns loosened, work-from-home expanded into work-from-anywhere. Many employees started using cafes as offices and conducting business while on vacation.

This shifting concept of the workplace is giving rise to travel and leisure expenses and other employee expenditures that employers may need help managing. As Southeast Asian countries lift their travel restrictions, business travelers can move once again but they may expect their company to offer more flexibility than before.

Based on the SEA Business Traveler Report 2022, 67% of business travelers in Southeast Asia felt their post-pandemic travel frequency fell short of their expectations, with 36% saying they were travelling more than they wanted to while 32% said they were travelling less than they preferred.

As the physical office has become less of a necessity, companies need to reassess how to structure their staffing, allocate their operational and labor costs, and distribute the travel frequency among employees. Finance leaders must ensure their expenditures stay within budget, under their control, and are used in a way that accommodates changing worker needs.

Captaining total spend management in the new world

Post-pandemic leadership will shape companies' fortunes in the coming decade. With the economic impact of the pandemic, Southeast Asian businesses must effectively manage their finances and maximize their budget.

Total spend management must be in tip-top shape, enabling you to:

• Monitor and control all the spending categories of the business
• Optimize the spending policies, processes, and systems
• Ensure that each spend yields the best possible return, and
• Make the most of limited resources to fulfill the company's bigger goals.

Additionally, enterprise accounting could continue to evolve in the coming years. To retain a single source of truth, executives may need to abandon the steady-ship strategy and make difficult decisions to achieve the required organizational transformation. This means watching every expenditure closely and ensuring that the company obtains the best value.

But "preparing for an entry" for enterprise accounting in the new world may not be straightforward. How much and how quickly should you pivot your accounting and finance? While your approach must ultimately consider short-term and long-term goals, you don't need a complete overhaul of your policies and processes for now. Establishing visibility into employee travel and expenses is a good start.

How to optimize total management spend

Recalibrate your spend management strategies with these three steps:

1. Be aware of new risks in employee spending.

Hybrid work environments are making enterprises vulnerable to expense fraud and bogus claims. As employees move between working in offices and remotely, visibility of their expenses could be negatively impacted. Expense fraud has cost ASEAN companies 3.4 times the amount of the lost transaction value. Specifically, there are four key types of expense report fraud to look out for, including inflated expense claims and multiple claims.

Expense fraud is giving rise to new risks that negatively affect the bottom line and reveal gaps in your expense policies and financial reporting. Companies should have a comprehensive approach in place to guard against these types of expense report fraud. As such, business leaders need to reconsider the day-to-day work of employees, refresh visibility over their spend, and prevent further instances of expense fraud.

2. Adopt technological tools to manage spend.

Tracking and reporting expenses can be time-consuming for employees and managers. For instance, in Singapore, it takes employees 2.7 hours per month to file expenses. Managers then spend 5.5 hours per month manually reviewing and approving claims.

To simplify the process, you can adopt technological solutions for expenditure management while keeping an eye out for new business travel trends and mobile apps that can aid in expense processing, reconciliation, and reporting. Finance leaders who want to stay competitive in a fast-changing industry can also think of technology adoption as a tool to prepare for and overcome inflation challenges.

Southeast Asian technology is already meeting the needs of people who work from home in different ways. You can use different technological tools to free up time for more critical and strategic tasks. Many of these solutions are focused on automating manual procedures, allowing employees to work more quickly, efficiently, and transparently.

Despite adopting tools for automation, some leaders still spend too much time on invoice processing, expense processing and reconciliation, and reporting. You can take your technological adoption a step further by investigating ways to employ more precise technologies for invoicing, processing, and reporting. Technology vendors also often offer advice on best practices that can be considered and adopted.

3. Change the culture around travel and expense reporting.

The post-pandemic workplace needs new strategies for travel and expense management. To bring these strategies to life, leaders must first understand how implementing new T&E management guidelines, and templates can lead to enhanced visibility, spending control, and other potential benefits.

Leaders must also be able to communicate these benefits to get employees to follow them and ensure compliance is sustainable. With this knowledge, you can create a dynamic T&E management system that can maximize efficiency and reduce costs for your company.

As you rebuild your travel program, consider embedding travel sustainability. Develop new procedures for travelling employees to plan and prioritize their trips while putting in place new controls that help manage budgets and achieve environmental goals.

Leading total spend management

Executives need to manage spend across all areas of the business, from procurement to finance and beyond. Careful analysis of various data collected by technological tools, including employee travel and expense, can help identify total spend management gaps.

Investing in software solutions and integrating them into the company’s existing systems can help to improve visibility, reduce costs, maximize automation, and provide better insights into total spend. With the right tools, policies, and procedures, you can chart a full-potential entry into the new world’s hybrid working arrangements.