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AppZen CEO on rising Covid-19 related work expenses

Anant Kale, AppZen CEO, spoke with Yahoo Finance about the latest trends with work expenses amid coronavirus.

Video Transcript

JEN ROGERS: So as we try to get a handle on what's happening with spending, we've had earnings season, and we had Discover Card come out telling us they saw everyday sales down some 14%. Travel spending was down 99%. Is that happening at companies as well?

I want to bring in Anant Kale. He's the AppZen CEO, and they track expenses at different companies. So, Anant, let's start macro here, 30,000 feet. What are you seeing in terms of expenses overall? Did they fall off a cliff when the coronavirus-- when we all started working at home? Did you see that happen?

ANANT KALE: Yeah, Jen, first, thanks for having me today on the show. Absolutely. As the coronavirus, you know, pandemic started, we definitely saw an impact. Now mind you, the expense reports are a lagging indicator of what's happening out there. But in February when this thing all started and as March came through, the first thing that we saw was we saw a big spike in cancellation charges.

Now you can imagine a lot of corporate travel is booked far in advance. And with the coronavirus lockdowns in place, employees were blinded by that, and probably they didn't have much time to cancel their conferences or the business travel that they had. So the first impact was a big spike in cancellation charges, no-show charges that we usually see on expenses.

Now as the weeks went by, the travel charges per se have gone down tremendously. We are still seeing a reduction over 60% compared to the same time last year. So that has gone down.

But interestingly, what has come up is some of the other charges which we had not seen before. So some of them were we saw charges related to, you know, employees buying things like N95 masks, face masks as we know them, right? We saw them buying cleaning supplies. So employees were trying to get used to this new environment. They were trying to buy this thing-- these things which mattered in the corona situation so that they could be done with-- with their-- carry on with their business.

And as I think April has started, the travel charges have almost come down dramatically. That's not happening. But what has increased is work-from-home expenses. And, again, we're seeing a wide variety out there. We are seeing employees expensing everything from buying screen monitors to buying disks, buying HDMI cables, printers, and we are seeing a lot of variation across industries. Some of the industries like software have been faster. Financial services have been foster in terms of how many employees are submitting these expenses for work-from-home expenses. They have really gone up a lot.

JEN ROGERS: Right.

ANANT KALE: But then certain industries like telecom, technical services, we haven't seen a lot of work-from-home expenses undergoing there. That means employees are not really working from home in those companies as much.

JEN ROGERS: One of the things right now that we're talking about and looking for is churn in some of the subscription services that people have. So on just a consumer level, we've been talking about that as it relates to cell phones or Netflix. What are you seeing with subscriptions on a corporate level? Those exist there, like, you know, people's LinkedIns maybe that they expense. Have you seen any cutbacks there?

ANANT KALE: I think not generally as a trend that specific services have been hit hard from a corporate point of view, but what we have seen is much more scrutiny. Now a part of our business is not just looking at travel and T&E expenses but also corporate spend, the entire spend-- spend that you do to all your vendors, including your software services.

And we have seen a lot of interest coming in from CFOs, the customers who we normally sell to, asking us to give us more visibility into what kind of spend that they have. What kind of software subscriptions have they signed up to? Are they utilizing all of them? Are they paying the right amount of money on their invoices for the terms that they had?

So we're actually seeing an acceleration on that side of the business where CFOs want much more visibility. They want much more accountability in what they're spending with all their vendors.

JEN ROGERS: Anant Kale, AppZen CEO, great to get your time and your perspective. Thanks so much.

ANANT KALE: Thanks for having me, Jen.