Controlling Costs and Cultivating Compliance to Beat the Cost-of-Living Crisis and Rising Inflation

As inflation soars and the cost-of-living crisis in Europe strengthens, the impact is being felt across businesses of all sizes. So, what expenses are affected by inflation? With soaring prices on everything from fuel to food, expenses that will be hit by inflation include flights, hotels, meals and petrol..

The knock-on effects in terms of business cost control, employee wellbeing, strategy and business resilience run much deeper. So, what can you do to ride the storm and, at the very least, control the controllable?

In this four-part blog series, we’re going to examine how you can outsmart inflation and navigate the cost-of-living crisis with automated spend management. 

What Do Businesses Need to Do Now?

Few companies will come out of this economic period unscathed and some are going to be hit far worse than others. For all businesses, the goal is to stick to a business spending policy, ensure employees are never out of pocket, keep spending habits in check and build long-term business resilience.

You have a number of options, some more risky than others. A price hike might solve your problems but could also alienate some customers. A business loan can smooth the cracks and buy you time, but if interest rates rise further, it could be expensive.

But whatever the size of your business, it’s crucial to take positive action on what is being spent throughout your organisation to support cashflow and ensure compliance. This issue has become even more important as hybrid working muddies the waters. 58% of HR and finance decision-makers say that employees are currently reclaiming or categorising expenses incorrectly while working in hybrid working environments.

 

6 Ways to Grow Your Business with Spend Management Automation

To help you on your path to better cost control and compliance, read our eBook which explores six ways your spend management program can help fuel growth – even in economically challenging times. 

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What Is the Impact of Inflation and the Cost-of-Living Crisis on Your Business?

Towards the end of 2022, the Consumer Price Index (CPI) annual inflation rate was the highest annual CPI inflation rate in the National Statistic series, which began in January 1997.

With these huge increases in prices, it can be difficult to maintain your profit margins, sales can plummet as customers make cutbacks on spending and employees might seek higher wages to compensate for the rising cost of fuel, energy bills, food and services.

Post pandemic, 62% of UK finance and IT leaders say they would benefit from focusing on efficiency and business cost control. As external costs rise, most businesses will find it necessary to adjust their expense policies to ensure tighter cost controls and compliance. 

This creates a multi-pronged challenge. You must double down on efforts to drive cost efficiency and compliance, whether that’s looking at fraud and out-of-policy spend, securing better supplier rates or reclaiming more VAT. 

This can seem like an uphill, resource-draining struggle at an already difficult time. The answer could be business process automation, with 62% of businesses saying that digital tools help to manage expenses more effectively across their organisation, making the process smoother for the finance team.

How Can SAP Concur Solutions Help?

Offset inflation and the cost-of-living crisis by transforming your business spend automation processes. With SAP Concur solutions, spend flows in from cash payments, corporate card schemes, accounts payable and travel bookings to one dashboard. As a result, your business will  benefit from:

• Real -time visibility into spend

Businesses worldwide using SAP Concur solutions experienced a 26% reduction in budget overspending because of increased visibility into spending data. For example, Concur Expense turns paper- and spreadsheet-based steps into an automated, digital workflow to capture all cash, corporate and p-card expenses – bringing digital speed and control to the entire process and more control over spending. For your travel and expense policies, Trip Link allows you to capture – and apply spend controls to – bookings made directly with suppliers.

• Intelligent policy controls

Be proactive rather than reactive regarding out-of-policy spending. 53% of businesses worldwide say reducing risk of expense reimbursement fraud is a top worldwide business expansion and cost containment goal. 

• Automated compliance

Take the burden of staying within policy and managing tax and regulatory requirements off your team. 42% of finance leaders worldwide say non-compliance resulting in time wasted during expense audits was a top pain point prior to automating. 

• Intelligent reporting and audit tools 

Shine a light on spending behaviours and patterns that were previously hidden with reporting tools such as  Business Intelligence and deliver stringent audits using Concur Audit Services.

• Better supplier relationships

Concur Invoice creates an integrated, digital process for managing invoices that improves consistency and efficiency helping you negotiate mutually beneficial rates with suppliers.

Ultimately, it’s about controlling the spend you can see. Automated spend management gives you that power at a time when it’s most needed.

Close the Spending Gaps

As inflation soars and budgets tighten, business process automation closes the gap between expenses, invoices and the people who need to get paid. With SAP Concur solutions, you can turn each expense and invoice report into an opportunity to save money and boost compliance, strengthening your business against the full impact of these tough economic times.

With cost control and compliance in hand, you can focus on taking care of your employees as they deal with their own cost-of-living challenges, a topic we’ll be exploring in the second of our Cost-of-Living Crisis blog series.