Cape today released their CFO Spend Management Whitepaper: Strengthen cash flow management in a time of crisis.

With inflation running riot, the Reserve Bank of Australia has increased interest rates to a 11 year high of 4.1%. The knock on effects have led to the creation of a cost-of-living crisis that began in March 2022. Seeing costs spiral on everything from housing, utilities, petrol, groceries, clothes and even the cost of holidays, for those who can afford them.

To better understand how businesses are adapting to this environment,  Cape, a multi-user spend management account for Small and Medium Enterprises in Australia, carried out research with 160+ decision makers who were responsible for finance automation software solutions, or had the approval oversight of business spending.

The survey found that overspending and cash flow problems were the number one problem preventing employers from being willing to empower their employees with access to company funds.

Now with Australian employment at the highest rate for nearly a half century, the question is what role should employers play in supporting their workers through the cost of living crisis?

Unfortunately 78% of businesses surveyed opt to have their employees spend out of their own pocket for business expenses before reimbursing them. Meaning employees are being used as a form of working capital to fund the operating expenses of the employer.

Ryan Edwards-Pritchard, Founder and CEO of Cape commented that ‘Employees, just like their employers, are facing increased financial difficulties given the cost of living crisis. Unfortunately it’s always the most vulnerable that are impacted, and in this case it's younger workers who typically earn less and don’t have readily access to credit to bridge short term needs.”

It might be 2023, but 79% of the survey respondents commented that their current approach to controlling business spending wasn’t adequate and needed upgrading.

Edwards-Pritchard goes on to say that “providing your staff with access to business credit cards that have smart restrictions around where, when and how much they can spend makes sound business sense, as opposed to having them use their own funds and then wait for a reimbursement to be processed.

There’s software available at your fingertips that can eradicate the need to get your employees to use their own money for work-related expenses.”

The full report is available to download here.