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Mar 6, 2023
6 mins read
Workspace Spend Management
In order to accommodate the dynamic and changing needs of modern workspaces, companies are having to pivot their current methods of managing spend on coworking spaces. As more companies, like GitHub most recently, move toward a completely remote work team, their need to access flexible workspaces on an as-needed basis will certainly increase.
Where companies once used ad hoc methods to manage the small number of coworking space requests and expense reports, they now could potentially be handling a large number of the same, creating incredible challenges from a budget standpoint. What used to be a few simple expense reports that might have been easily categorized is now a floodgate of requests and receipts, with no actual system in place to handle this heavy influx.
Whether your company has been remote since prior to the COVID-19 pandemic, or you’re part of the recent wave of teams moving to permanently remote working environments, it’s imperative that your finance team gets ahead of their expenses and budgets related to flexible workspace spend.
With that in mind, here’s what you need to know about flexible workspace spend management, and why it’s so important in this everchanging workspace environment.
READ MORE: What is workspace spend management?
Flexible workspace spend management is designed to accommodate the dynamic and changing needs of modern workspaces, which may require access to flexible workspaces on an as-needed basis. This typically involves setting budgets, negotiating contracts, monitoring usage and expenses, and making decisions about cost-saving measures, all related to the on-demand needs of employees. By providing remote work and hybrid work employees with access to the resources they need to be productive, finance teams also need to be able to control costs and track a budget that might not have existed prior to a company transitioning to a completely remote work environment.
The goal of flexible workspace spend management is to optimize the allocation of resources and ensure that the coworking space budget is being used effectively and efficiently. This can include setting budgets, monitoring spending, negotiating contracts, and making decisions about cost-saving measures such as virtual office spaces. Companies want to be able to provide their employees with the opportunity to utilize on-demand coworking spaces, including meeting spaces and conference rooms, but maintain a reasonable budget to accommodate such requests.
This concept has been successfully applied to the business travel industry. Prior to the digitization of travel planning and expense reports, finance departments would have to use paper to track expenses of their traveling employees, which was quite problematic. This practice was eventually digitized, and the term “travel and expense” (T&E) was born.
Similar to how many companies have streamlined their business travel planning and execution process, with seamless booking, payment, and budgeting, so can companies do the same for flexible workspace needs. And with the new trend of remote work or distributed work teams, finance departments are seeing an overwhelming increase in need for on-demand coworking spaces.
As the requests increase, so does the challenge of managing them, whether it’s for on-demand desks, meeting spaces, or conference rooms. There needs to be a system in place to manage spending, create budgets, and reimburse employees.
Before the COVID-19 pandemic, flexible workspaces, like coworking spaces, were most often being used by freelancers, or by start-ups who weren’t able to afford a dedicated office space. Companies were only seeing a very small number of expense reports and reimbursement requests, and could easily categorize them under “employee benefits” or even, in some cases, under “travel.”
However, with the number of companies moving to a completely remote work environment, or even a permanent hybrid solution, flexible workspaces are now a viable resource for full-time remote work and hybrid work employees who need an office space or meeting space outside of their own home.
The potential for finance teams to encounter a large increase in expenses related to on-demand coworking space is quite high, and without a flexible workspace spend management system in place, the tracking of these expenses could present quite a challenge.
Inevitably, employees forget to file expense reports, don’t file them in time, or file them incorrectly, and suddenly, flexible workspace spend management becomes extremely important to the company’s bottom line.