How expense rules are changing amid work from home surge

Anant Kale, AppZen CEO, joins Yahoo Finance's Zack Guzman to discuss how tech is being used to help companies manage employee spending & how businesses are shifting their expensing policies amid COVID-19.

Video Transcript

ZACK GUZMAN: We've seen more and more companies come out saying that they are going to be extending these work-from-home requirements as well as, I guess, benefiting and telling employees that they should take their time, whether it's Uber, Microsoft, Google. Facebook even extending about $1,000 checks to employees to go ahead and cover the costs of working from home as it gets very expensive.

So how much are some of these companies allowing employees to expense, that's the question, whether or not you're in that camp as well. Here to chat that with us is AppZen CEO Anant Kale. And, Anant, I guess it would depend company to company, but when we look at expenses according to your data, we've seen airfare and hotels come down versus last year, which no surprise. But what are you seeing in terms of the rise in expenses being filed in this miscellaneous category as people work from home and realize it's quite expensive to do so?

ANANT KALE: Yeah, exactly. Thanks for having me.

So just to give you a little background about how we get access to this data is we use artificial intelligence to help companies save money. So that means that the thousands of companies who are customers like large brands like Amazon, Salesforce, Airbus, across industries, our technology scans through all the expenses and figures out if there is anything that is out of the ordinary out there.

Now what has happened since the pandemic has started is there's a huge shift from travel-related expenses, like you rightly said, into miscellaneous expenses or other expenses. So these miscellaneous expenses have changed over time. When the pandemic started about three months ago, we saw an increasing number of safety-related spend. So you found expenses related to buying, you know, N95 masks or cleaning supplies, gloves, stuff like that. So employees were trying to spend money on things which they needed to do their work.

But while-- over the months as more and more employees have got situated and folks are working from home almost 100% of the time, these expenses have largely changed due to work from home related charges. Now, those work from home related charges vary across companies, but they cover everything from, you know, buying IT equipment, cables, monitors, furniture, and pretty much everything that you might think of.

ZACK GUZMAN: And, I mean, when we're thinking about it, obviously there are a lot of costs that you might not see coming here. Some of those you named but also food as well. Some of these companies providing food in the office. So how-- what have you seen there and maybe some things that maybe people aren't getting away expensing now?

ANANT KALE: Yeah, I think the crux of the problem is around what do you define as a reasonable expense when you're working from home? Mainly, most of the rules that companies have written-- the CFOs have written are around travel and, you know, entertainment expenses, hotel expenses, because that's what largely those policies were written on. Nobody expected a work-from-home situation would last so long, so the rules are not there.

So the first thing that we actually saw from companies and finance teams was to give them visibility around what are employees looking for? Now, companies do want to do the right thing. They want to help employees do their job safely and comfortably at home. But that changes depending on, you know, what's reasonable.

So while, in some cases, you might find that employees think that they are-- they can get away with buying lunches, those are not necessarily true. Employees are not allowed to do that. In some cases--

ZACK GUZMAN: Yeah.

ANANT KALE: In some cases, employers are saying, hey, we can help you buy, you know, monitors or buy you ergonomic desks, but then there's a limit on how much money you can spend. You can't probably get away with a $600 desk.

ZACK GUZMAN: Oh yeah. It's all case by case. You know, I got away with getting this one behind me. But, you know, not everybody can expense something like that. But Anant Kale, the CEO over at AppZen, appreciate you taking the time to chat with us.