- Employee expenses related to the novel coronavirus outbreak have skyrocketed in the last several weeks, a client data analysis by digital accounts payable company AppZen found.
- Crisis-related expenses jumped by more than 100%, week-over-week, beginning in early February and almost tripled between the last week of February and the first week of March, the company’s analysis of sample data sets found.
- The data suggests finance leaders are being flexible in their expense rules to accommodate travel restrictions and remote-work policies.
"CFOs have been doing the right thing for the safety of their employees,"Anant Kale, AppZen co-founder and CEO, told CFO Dive Tuesday. "They’re letting people spend outside of the regular processes and trusting them to make the right decisions. In the urgency of time, new reimbursement policies are being done through expense reports."
The company defines crisis-related employee expenses as face masks, cleaning supplies, remote-work related resources, canceled trip charges, and extended-stay costs for employees unable to return from a business trip.
Canceled business trips comprise most of the costs. Of just over 1,500 claims in a data sample, almost 70% were business trip-related. These costs include ticket refunds and penalties for not canceling hotel rooms within the allowed time period, among others.
Face masks are the next biggest expense, at about 22%. Costs related to remote work and cleaning supplies are other categories.
The remote work expenses are mostly IT-related services, like those related to connectivity, and devices, including monitors and cables. "We usually don’t see that," Kale said.
By industry, hotels and entertainment — both of which have been hit hard by travel and restrictions on gatherings — along with life sciences organizations, account for one-third of the expenses generated. Government and telecoms were the next biggest sectors generating expenses, followed by logistics, manufacturing, software and finance, which comprised about a quarter. Drug companies and healthcare organizations had the smallest share of crisis expenses.
In data that tracks closely with the spread of the outbreak, the increase in crisis-related expenses came first from China, Hong Kong and other Asian countries, then Europe, and now they’re seeing an increase in the United States.
Kale said his company will keep tracking the trends as the outbreak unfolds. "We’ll continue to keep this data updated on a daily basis," he said.