How Finance Leaders Can Use Tech for Greater Spend Visibility
Tracking your company’s spending often feels like being thrust back into 1995 (without the cartoon character ties and Rachel Green haircuts). It usually involves spreadsheets, paper receipts, reams of bank statements, plus a hefty dose of manual data input.
Aside from being prone to human error and a productivity black hole, it’s difficult to get an accurate snapshot of your company’s spending this way. And, without solid data, it’s harder to cut waste, budget accurately, and make informed big-picture decisions.
We looked at how tech can take the pain out of expense management and unlock valuable data in our recent webinar. Before you head off to watch the on-demand webinar, here’s a rundown of the current state of expense management and a look at how you can improve your process.
Why expense management is broken
If you’re like most businesses, you expense management process looks like so:
- Employees pay business expenses out of pocket, submit an expense report, and get reimbursed
- Alternatively, they use a company credit card and submit receipts
Both are problematic, because they rely on manual processes and outdated tech.
Most credit card providers issue bank statements monthly. The timing is up to the provider. So, you might have to do reconciliations when you’re slap bang in the middle of payroll, management accounts, or other important deadlines. And that’s leaving aside the issue of credit limits, which staff can go over surprisingly quickly and which you can’t just raise at a moment’s notice when you need them.
Expense reports aren’t much better.
Most employees dislike filing them and postpone it to the last minute. And because many accounting programs can’t import spreadsheets, someone usually has to input the data manually, probably after having spent hours sifting through crumpled receipts and matching them with transactions.
88% of spreadsheets contain at least one mistake. With a company that employs 450 staff processing 135 expense reports a month, a lot can slip through the cracks. Our research, for instance, found 83% of fraudulent expense claims go undetected.
More importantly, it’s hard to have visibility.
In our Variable Spend Management e-book, we explain how even tech-savvy businesses can struggle. Uber infamously spent £165,000 on helium balloons, and Facebook reportedly spent $1.8 million (approximately £1.3 million) on food and drink for a single event.
Your spending might not be so extravagant. But, chances are, you’ll have a hard time keeping it in check if you can only find out where the money’s going by matching receipts to transactions several months after the fact.
But is real time spending visibility even possible?
As it happens, real time spending visibility is not only possible. It’s also fairly simple.
With Soldo, for instance, it’s as easy as issuing your staff with prepaid cards:
- Every employee gets their own prepaid physical and virtual Mastercard
- Each card connects to a dashboard where you can see what an individual is spending in real time
- The dashboard integrates with accounting software programs through an API, so spending data is imported automatically
When employees use their Soldo card, they get a notification and upload a pic of the receipt. You can see the transaction in the dashboard as soon as it’s made.
Can technology provide spend visibility across departments?
With an expense tool like Soldo, finance teams can provide different cards for multiple teams.
This is a good way of separating out the expenses related to the individual user like their Oyster card spend, spend on hotel, from their role-based spending. Role based spending would include paying for software subscriptions because they’re in the IT department or marketing for Facebook if the employee is in the marketing department.
Want to find out how much a marketing campaign is costing? Log on to the dashboard and check out the marketing campaign’s wallet. The same goes if you want to find out how much of their travel and entertainment budget sales have spent.
Better data means better business
Compared to the traditional way of doing things, Soldo slashes admin and all but eliminates human error:
- There are no expense reports to fill out
- You can restrict what individual staff members can or can’t use the card for, so there’s no need to police your expense policy manually
- There’s no need to input data manually into your accounting software
More to the point, because you don’t have to input data manually to complete your accounting records, you’ll have greater visibility not just when it comes to spending, but also of the business’ financial health as a whole. And, as we explained in our webinar, better financial data gives you more control and helps you make better financial decisions.
Here are three ways more visibility can improve your financial decision-making:
- Curb silent drain
Silent drain is when low cost items become gigantic expenses. As we explain in our Variable Spend Management e-book, this happens when different departments don’t communicate, or if it’s difficult to keep individuals accountable for their spending.
Increased visibility means you can keep track and step in if spending starts getting out of hand. With Soldo, you can also set limits, raise those limits at a moment’s notice if needs be, or disallow certain purchases altogether
- Get more out of departmental budgets
If you can see spending in real time, there’s no need to wait for month, quarter, or year-end to set budgets. You can course correct as you go.
Noticed sales and marketing are paying separate SaaS subscriptions? Cancel one of them, get them to share, and use the extra money elsewhere
- Be proactive, not reactive
Real time visibility means you no longer have to wait until after the fact to fix issues or make improvements. This means you can think strategically and plan ahead instead of reacting.
Put simply, you’re in control.
Time is money… spend it on what matters
In a world where we can check our personal spending in real time by logging onto an app, and pay bills from our phones in seconds, we can do a lot better when it comes to managing our finances. By switching out credit cards and spreadsheets for tech, you can put repetitive, time-sucking tasks on autopilot and spend more time on what’s really important: growing your business.
Want to learn how to plug silent drain, take control of spending data, and get real time visibility into company’s finances? Watch our FREE on-demand webinar Unlocking Knowledge to Create Growth: A Finance Leader’s Guide