expenses

Expensing in a crisis: Employees seeking reimbursement for COVID-19-related expenses

by Uri Kogan March 17, 2020

At AppZen, we help our customers process millions of finance transactions per month, giving us a uniquely detailed view into how companies worldwide and their employees are handling the global health crisis triggered by COVID-19.

To help companies consider their response, ensure employee well-being, and maintain productivity regardless of where people work, we’ve dug into our expense report data to learn how COVID-19 is affecting employees worldwide. We looked at claimed (rather than reimbursed) expenses to ensure our data is as up-to-date as possible.

Massive growth in COVID-19-related expense claims since the end of January

The first thing we noticed in our data is that COVID-19 related expenses skyrocketed over the past 7 weeks. In the last week of January, we saw only one related expense, for an office buying a package of masks. In the following weeks, the number continued to increase by almost 100% week over week. The dollar value of those expenses has increased even faster – well over 100% per week.

Number of COVID-19 related claims

Value of COVID-19 related claims Value of COVID-19 related claims

Submitted expenses related to COVID-19 vary widely by industry

Looking across industries, we found that one-third of our customers in the hotels, entertainment, and life sciences industries had virus-related employee expense claims. Government and telecom companies followed.

In logistics, manufacturing, software, and finance, about 20-25% of companies had virus-related employee expense claims.

Perhaps surprisingly, pharmaceuticals and healthcare were both below 10%, along with professional services (notwithstanding the heavy travel typical in professional services).

Percent of companies in given industries reporting COVID-19 related expense claims

 

COVID-19 expense claims are not that clearly tied to the geographic spread of the virus

Looking across selected countries, we found that — somewhat surprisingly — expense claims didn’t really ramp in China first. The chart below normalizes each country’s peak to 100%. It shows some interesting patterns.

In Asia, China’s ramp was delayed, possibly because the lunar New Year delayed people’s return to work.

Singapore has been lauded for its strong management of the crisis and the limited effect on the city. Our customers there were aggressive with claims in the second half of February, before a dip and a major increase in the most recent week.

And Japan had no claims at all before a rapid rise in the last week of February.

In Europe, Spain had a major spike in mid-February, but has recently increased again. Italy, which has been the worst-hit country in Europe, declined from its high in the last week. Perhaps a hopeful sign, or a reflection of the effects of the lockdown on the north of the country (and more recently, the entire country).

In the US, claims were roughly flat during most of February before a rapid rise over the last two weeks.

Number of expense claims contain _no show_ charges

Expense growth by country over time

 

What are people expensing?

We dove into the nature of expenses people have claimed, and found that — at least to date — the majority are related to canceled business trips. This makes sense, as over the past week or two, many conferences have been canceled and corporate travel bans put in place. In fact, we dug into “no show” charges — expenses like a hotel cancellation fee or airline refunds — and saw that after an initial spike in mid-January, they have been relatively flat before spiking on February 23.

The second-largest focus of expenses has been related to masks, followed by working from home and cleaning supplies.

COVID-19 related expense claims

COVID-19 related expense claims (by value)

What’s next?

We’ll be keeping an eye on this breakdown over the coming days. We expect that after a surge of trip cancelations, those expenses will wane and more remote working-related expenses will come in.

We will be posting updated data and analysis as the situation develops, as well as other related content, and we welcome your input and questions.

Stay safe.

Uri Kogan
Vice President of Product Marketing

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