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TL;DR
- Non-payroll spend impacts HR leaders both as department heads and also as the organization’s leader responsible for attracting and retaining its talent.
- HR heads — like all department leaders — face a lack of visibility and control over their team’s spending which threatens budget control and good decision-making. Automated, built-in compliance, approval routing, and real-time spend analytics give control back to department heads while saving teams hours of time.
- HR leaders have specific spending needs that can be better met with more robust spend management software. Customized benefits cards can be set up to administer specific programs, project-level spend tracking makes event spend management easier, and touchless expense reporting with rapid, compliant reimbursements for candidates and employees improve the spending experience.
- Traditional spending practices threaten employee satisfaction. They rely on disconnected point solutions for expense management, accounts payable, and corporate cards that create confusion, risk, and inefficiencies in the workplace. An easy-to-use intuitive interface that users love improves adoption and collaboration on spending decisions. AI-powered automation eliminates manual work to process invoices and reimbursements.
- Innovations in procure-to-pay software offer a streamlined, comprehensive way for employees to make the purchases they need while automatically securing approvals, vendor and transaction details, and payment information required by the accounting team. In short, it radically elevates employee engagement.
- 14 use cases demonstrate how to achieve safe, easy, compliant, and efficient non-payroll spend and a significant and positive impact on employee engagement and productivity.
Introduction
HR leaders have long been experts in, and advisors on, payroll spending, including systems, capacity planning, salary market research, and forecasting.
Now, an increasing number of HR leaders are adding non-payroll spending to their expertise — that is, all the money that employees spend on things like travel, software subscriptions, contractors, ads, events, and more. This makes sense when non-payroll spend is viewed as an employee engagement problem.
What do I mean by that? In most organizations, employee spending is an inefficient, frustrating process. It’s unnecessarily time-consuming. It results in wasted time and money and long cycle times that stymie productivity. In short, it doesn’t foster the type of engagement that drives excellence in the workplace.
To fix this problem, HR leaders are turning to innovative, new procure-to-pay software to have a meaningful positive impact on employee engagement and productivity.
Employee engagement has a very real impact on organizational success. Companies with highly engaged workforces are 24% more profitable.
— Gallup
Why is Non-Payroll Spend Such a Problem?
Spending operations are complex, involving several parts of an organization and are executed in various ways. Much of non-payroll spending is done using corporate cards that can be difficult to reconcile, control, and account for. Some spending is with personal funds that must be reimbursed.
It’s no secret that in many organizations employees loathe expense reporting — one study even found that employees would rather do their taxes than submit expense reporting!
Some spending relies on purchase orders while, for some transactions, the vendor is simply asked to send an invoice. All of it can create risks to the organization and chaos for employees, who are unclear on the process and never sure who needs to approve their purchases.
Accounting Teams Bear the Burden
Non-payroll spend done without the benefit of modern procure-to-pay software also places a heavy burden on the accounting team. They’re left to chase down receipts and vendor information, verify approvals, transaction details and tax information, get payments to the right place at the right time, and make sure the general ledger accurately reflects all of the organization’s payables.
Additionally, the accounting team finds itself in the unhappy role of policing the activities of their colleagues, reduced to nagging and threatening just to get the documentation they need to close the books.
Organizational Mayhem
This complex process is often global, cuts across departments and legal entities, and typically results in dysfunction, inefficient and wasteful spending.
- A lack of visibility.
- Risk of errors and fraud.
- Frustrated, unhappy employees.
- Diminished productivity.
Humans and Their Resources
Paylocity has long served the needs of HR to manage payroll spend and support employee engagement. Now that it has added Airbase procure-to-pay software to its offerings, it can provide a top-rated solution for non-payroll spend too. It’s designed to eliminate risk, waste, frustration, and inefficiencies associated with the employee purchasing process. Paylocity combines non-payroll and payroll spend to address a broader set of employee needs than with any other solution for mid-market and early enterprise companies available in the market today.
One study found that 40% of employees have incurred late charges on their person credit cards because of the time it takes to get reimbursed by their employers.
In that same study, 19% reported having to pay credit card interest charges or late fees.
How Modern Procure-to-Pay Software Works
The Failure of Point Solutions
Very small companies can get by with a series of point solutions for bill payments, expense management, and corporate card spend. But once a company has more than say 50 employees, the number of transactions and level of organizational complexity grows, creating confusion for employees and extra manual work for accounting teams. By the time an organization hits 200 employees, the systems are straining, risks are proliferating, and time is wasted on manual gap-filling.
The Problem With Enterprise Software
Large enterprise-level companies (over 5,000 employees) have comprehensive procure-to-pay systems available to them but these are very expensive and often over-engineered for mid-market companies. Airbase by Paylocity is one of the few comprehensive solutions right-sized for the complexity and volumes encountered in mid-size to enterprise-level organizations.
Right-Sized and Integrated
The platform is a full-cycle solution for all non-payroll spend — corporate cards, invoiced purchases, and reimbursements for out-of-pocket expenses. An intake module serves as the single front door for all employees to request spend and let the system route that request to all appropriate stakeholders for oversight and approvals.
Data from invoices or receipts is ingested using OCR technology and converted to general ledger entries and data needed to make accurate payments. The integrations with adjacent systems like ERPs, legal software like Docusign or Ironclad, project management software like Jira, and Asana facilitate cross-department collaboration (for example, InfoSec or IT sign off on new software).
‘Spend Management,’ ‘Procure-to-Pay,’ ‘Spend Orchestration’ — Different Terms, Same Process
Procure-to-pay has long been used to describe an essential business process to make purchases and pay for them.
The term spend orchestration has emerged to describe how new “moderized” procure-to-pay processes bring together all of these disparate processes, systems, and stakeholders into a unified platform that starts with intake and ends with closed books.
The process and its automation are also referred to as spend management. All automate the workflows and provide the tools for efficient, safe, and cost-effective spending.
HR Leaders Bring a Unique POV
HR leaders enjoy a unique perspective on the challenges and opportunities of non-payroll spend. That’s because employee spending impacts HR leaders on two levels: First is as a department head, second as the one responsible for employee quality and consistency company-wide. Employee engagement is central to their efforts to attract and retain the highest quality talent.
Department Heads Need to Control Their Budgets
As a department head, the focus is on the nitty-gritty of giving efficient, compliant access to the tools and resources their team needs to be productive in their jobs. For example, most HR teams spend money on things like events, employee perks, recruiting, and subscriptions for the software tools they use. HR leaders must ensure easy access to resources but they also must be confident that spending is warranted, cost-effective, and within budget. These concerns are shared by department leaders across an organization.
HR Leaders Need to Optimize Employee Engagement
But HR leaders have a second reason for caring about employee spending beyond their own team that arises from their obligations as HR leaders for all employees. These obligations include talent acquisition and retention by improving employee engagement, fulfilling their “duty of care,” ensuring equitable benefits, and for some, supporting ESG goals.
Easy, Automatic Compliance
HR teams are committed to the vital role they play in shaping employee experience, engagement, and overall workplace culture. Managing expenses efficiently is a key part of this, yet outdated, manual processes can become significant roadblocks, frustrating employees and distracting HR from their core responsibilities.
Airbase by Paylocity is a modern procure-to-pay platform and transforms how employees spend money. The result is radically improved employee engagement and a more productive culture.
Take a tour of Airbase.
Explore Airbase with a self-guided tour.
14 Ways HR Leaders Benefit From Airbase’s Modern P2P Solution
Let’s take a look at the ways Airbase helps HR teams remove administrative barriers, ensure compliance, and provide a seamless experience for employees. Each helps HR leaders manage spending for their own department while providing a solution that also enhances engagement across the whole organization.
1. Visibility and Control of Department-Level Spending
HR’s role as department head.
HR leaders are responsible for keeping their department-level spending within budget while making sure that their team has the resources they need to achieve their goals.
Like any department head, HR leaders must be sure that spending by every one of their employees complies with company policy and is within spending limits. As a department head it is their responsibility to also guard against wasted spend — zombie spend, for example, which is where subscriptions auto-renew without a full vetting of whether they are still used, needed, or cost effective.
Airbase solution.
Airbase approval workflows apply to spending whether by virtual card, PO, or reimbursement. Automatic routing based on pre-set rules that reflect an organization’s policies ensures that all stakeholders have signed off before money leaves the organization.
When all spending is consolidated on a single platform, department heads can easily access reporting on spending in real-time to stay on top of and control their budgets.
Airbase offers renewal support so that HR department heads can rest assured that all contract renewals are flagged ahead of time (the notice period can be set from months to weeks ahead of time) to allow stakeholders the opportunity to determine if the contract still best serves the needs and business objectives of the team.
2. Enhancing the Candidate Experience With Efficient Reimbursement
HR’s role in recruitment.
The employee journey often begins during the interview process, where first impressions matter. When candidates pay for their own travel expenses and face delayed reimbursements, it can create frustration before they even join the company. In some companies candidates are also reimbursed for time they spend on an assignment that tests their knowledge.
Airbase solution.
Airbase allows HR teams to streamline reimbursements by treating candidates as vendors. The software includes an integrated mileage calculator, making it simple to reimburse candidates for travel expenses quickly and accurately. This efficient handling of candidate expenses sets a positive tone, reinforcing a culture that values the time and effort of potential new hires and starts building engagement from the first interaction.
3. Safe, Seamless Access to Resources and Tools
HR’s responsibility for duty of care.
One of the first questions new recruits often ask is “how do I get access to a company card?” They know that their success depends on getting the resources, or traveling to the places required for their success. Safe, compliant access to company money shapes perception of the company and impacts employee productivity.
Delays in providing necessary tools and software can leave employees feeling frustrated and disengaged. Employees need easy, compliant access to company funds without delaying their work. A failure to provide a safe spending environment can run counter to HRs responsibility for a duty of care. If employees are subjected to a confusing process that can put them and their organization at risk for fraud, errors, or non-compliance then the workplace compromises employee wellbeing.
Airbase solution.
Airbase by Paylocity offers an intuitive, user-friendly interface that simplifies the purchasing process for new hires and existing employees alike.
With Airbase’s unmatched spend analytics, HR can quickly identify and resolve any approval bottlenecks, ensuring that employees receive the resources they need without delays.
This streamlined experience supports a productive onboarding process, helping new hires feel welcomed and empowered from day one and well into their tenure with the company. It protects employees from non-compliance, and reduces the risks of fraud.
4. Increase Control, Ease, and Cash Back With Virtual Cards
HR’s responsibility for organization-wide efficiency without sacrificing control.
Corporate card spending is a highly efficient way for employees to spend money but it is the hardest to control and account for. This is because transaction details can be delayed, knowing who authorized the spend and what it was for is difficult to track, and because whole departments often share one card, allocating spend to the right category takes a lot of time and effort.
Airbase solution.
While there are still situations where a physical card is necessary, virtual cards can be used for a growing number of payments, especially when added to a virtual wallet. Virtual cards bring efficiency at many levels because they are supported by a layer of software that allows for limits on amounts and expiration, secures necessary approvals, and captures accounting data to code the transaction to the general ledger. This means no more confusion about card spend and no more reconciliations.
The risk of fraud is lower on corporate cards, especially when they are vendor specific and it reduces the burden of 1099 reporting. When a virtual card is substituted for an ACH or check payment, the additional cash back can improve profitability.
5. Personalized Employee Benefits That Boost Engagement
The role of HR in offering equitable benefits.
Providing well-structured employee benefits is essential for engagement and satisfaction, making sure they are equitable across the organization is the responsibility of HR. However, managing diverse perks like wellness programs or home-office allowances can be time-consuming and prone to inconsistencies.
Airbase solution.
Airbase allows HR teams to set up tailored benefits programs using pre-set spending limits. Customizable benefit cards, such as “Home Office Benefit” or “Wellness Benefit,” enable employees to access the perks they need without excessive administrative oversight. By automating these processes, HR can ensure consistency and fairness, demonstrating the company’s commitment to supporting employee well-being, which in turn fosters a positive and engaging workplace culture.
6. Simplifying Contractor Management to Enhance Flexibility
HR’s role in managing a flexible workforce.
As companies increasingly rely on contractors for specialized skills, HR must ensure easy documentation collection (e.g., W-9s and SOWs) and a smooth payment process while maintaining compliance. Complicated, delayed payments can damage the relationship between contractors and the company, affecting future engagements. Missed 1099 reporting can lead to hefty penalties.
Airbase solution.
Airbase simplifies contractor management by automating the collection of W-9 forms with an option to link them directly to the first payment. Airbase validates tax IDs for both domestic and international contractors. The software also generates 1099 reports automatically, reducing administrative tasks and ensuring compliance. In addition to protecting the organization from tax penalties, this streamlined process helps HR maintain strong relationships with contractors, providing a seamless experience that reflects positively on the company’s culture and commitment to efficiency.
7. Efficient Event Management to Promote Team Building
HR’s role in fostering a collaborative culture.
Internal events, from team lunches to company-wide meetings, play a significant role in building a cohesive, engaged workforce. However, managing complex event-related expenses can be a logistical nightmare for HR teams. These events can include travel costs, meals, lodging, swag, and speaker fees.
Airbase solution.
Airbase offers robust tools for tracking and managing event-related expenses through custom tagging. By enabling HR teams to easily track costs associated with specific events, the software ensures budget compliance while providing visibility into spending. Event-specific cards with spending limits and expiration dates make payments to vendors fast and efficient while automating the recording of them directly to the ERP. Airbase makes it easy to decentralize spend by asking employees to make their own arrangements using Airbase virtual cards rather than having to use private funds.
This efficiency allows HR to focus on creating meaningful events that enhance team collaboration and employee engagement, while lightening the administrative burden.
8. ‘Touchless Expense Reporting’ and Rapid Reimbursements to Enhance Employee Satisfaction
The importance of quick, accurate reimbursements.
When employees face delays in getting reimbursed for out-of-pocket expenses, it can lead to financial stress and reduce their overall engagement. Traditional payroll reimbursements can also create tax complications, further frustrating employees.
Airbase solution.
Airbase addresses this issue by providing direct reimbursements to employees’ bank accounts, bypassing payroll and eliminating potential tax confusion. Airbase reimbursements are automatically triggered as soon as approvals have been secured to allow payment to flow in days, not weeks.
Airbase makes expense reporting pain-free with AI-powered expense reports generated from an image of a receipt. Expense reporting becomes a “touchless” experience eliminating the hassle and stress of submission.
By ensuring that employees are reimbursed swiftly and accurately, Airbase helps HR maintain a culture of trust and reliability, which is fundamental to sustaining high levels of engagement and satisfaction.
Research indicates that administrative burdens and delayed reimbursements negatively impact employee satisfaction and retention. For instance, a study found that 70% of employees consider leaving their job when faced with constant reimbursement delays.
9. Real-Time Spend Analytics for Informed Decision-Making
HR’s role in budget oversight.
Managing departmental budgets effectively is critical for HR, as it directly impacts their ability to fund employee programs and benefits. Without clear visibility into spending, HR teams may struggle to make informed decisions, leading to resource constraints and missed opportunities for enhancing employee experience.
Airbase solution.
Airbase’s market-leading spend analytics offers HR real-time visibility into spending by category, vendor, and project level. This comprehensive view helps HR teams monitor budget usage, identify trends, and make data-driven decisions. By empowering HR with actionable insights, Airbase enables a more strategic approach to resource allocation, supporting initiatives that boost employee engagement and productivity.
10. Ensuring Fair Access to Resources for a Global Workforce
HR’s responsibility for equitable employee treatment.
HR teams must ensure that employees, regardless of their location, have equitable access to company resources and benefits. Managing multi-currency payments and expenses for international employees can be complex and may lead to delays or inconsistencies.
Airbase solution.
Airbase supports multi-currency payments and subsidiary-level tracking, allowing HR teams to manage global expenses seamlessly. This capability ensures that all employees, whether domestic or international, have access to the same benefits, reinforcing the company’s commitment to fairness. By providing a consistent experience across geographies, Airbase helps HR foster a unified, inclusive workplace culture.
11. Building a Culture of Compliance and Accountability
HR’s role in policy enforcement.
HR teams are tasked with ensuring that employees adhere to company policies, including those related to spending. Non-compliance can lead to financial risks and damage the company’s reputation, undermining trust within the organization.
Airbase solution.
Airbase embeds policy compliance directly into the spending process, automating checks and approvals to prevent unauthorized expenses. This approach reduces the risk of errors and fraud, safeguarding the company’s financial health. With the right settings, the system handles the enforcement of policies rather than someone from the accounting department, freeing them from their policing role and improving their work satisfaction.
By creating a culture of accountability, Airbase helps HR reinforce responsible spending practices, which are critical for maintaining employee trust and organizational integrity.
12. Automated Onboarding and Offboarding for Seamless Transitions
HR’s role in managing access controls.
Ensuring that new employees have timely access to resources, while swiftly revoking access for departing employees, is a critical task for HR. Manual processes can lead to delays, errors, and potential security risks.
Airbase solution.
Airbase pulls data from Paylocity or, where appropriate, other HRIS systems to automate the provisioning and deprovisioning of employee access to spending resources. This seamless integration ensures that new hires are immediately equipped with the tools they need, while access for former employees is quickly terminated. By automating these transitions, Airbase helps HR maintain productivity and security, contributing to a smoother employee experience.
13. Aligning Spending With ESG Goals to Support a Positive Workplace Culture
HR’s role in promoting sustainability.
Many companies set Environmental, Social, and Governance (ESG) goals as part of their commitment to responsible business practices. HR plays a key role in ensuring that these principles are upheld in all aspects of employee spending.
Airbase solution.
Airbase can be configured using convenient no-code tools to route all spending requests to an ESG specialist for approval, ensuring that each expenditure aligns with the company’s sustainability and social responsibility goals. This feature allows HR to actively support the company’s commitment to ESG, contributing to a workplace culture that values ethical practices and social impact.
14. Protect the Financial Condition of the Organization
HR’s role in organizational success.
Ultimately it’s the responsibility of all leaders to ensure the organization hits its financial goals. An important lever to do this is by controlling costs to improve profit margins or for non-profit organizations to improve critical operating efficiency metrics. HR’s role therefore extends beyond the spending of their own department by ensuring an efficient and effective way for every department head to control costs.
Airbase solution.
By providing a solution that gives visibility and control over spending for all department heads and for the leadership team in general, HR can rest assured that expenses are controlled, vendors vetted, and employees are getting the resources they need.
Spend analytics provides a series of metrics to make the spending process highly efficient. These efficiencies include increasing cash back from switching from ACH and checks to card spend, and benchmarks to improve cycle times.
Because Airbase offers “touchless” expense reporting, employees save time and frustration. Similarly, Airbase offers a touchless accounts payable solution that processes invoices automatically and prepares all of the entries for the general ledger.
The efficiencies gained by the accounting team mean that the company can scale without having to add additional resources to handle more transactions, vendors, and employees. Finding ways to grow the business without growing headcount is a win for most HR leaders.
Conclusion
Airbase by Paylocity’s procure-to-pay software equips HR teams with the tools needed to enhance employee engagement, streamline administrative processes, and cultivate a productive workplace culture.
By automating spending tasks, providing real-time insights, and integrating compliance checks, Airbase reduces the administrative burden on HR and finance teams alike. From efficient reimbursements and customized benefits to automated compliance and global support, Airbase empowers HR to create a seamless, positive experience for all employees.
In today’s competitive landscape, maintaining high levels of employee engagement is critical for success. Airbase provides the infrastructure to support a culture free from unnecessary roadblocks, ensuring that employees feel valued, supported, and empowered to do their best work.
Whether it’s spending by the HR team or by the whole company, there’s no doubt that with Airbase, productivity goes up and employees are happier. And that’s the stuff that excites most HR leaders.
Summary Table of Use Cases
| HR Spending Use Case | The Problem | Airbase Solve |
| Ensure that HR teams have easy, compliant access to company money. |
HR teams need to spend money on a variety of things to do their job, like recruiting costs, employee benefits, company events. Typically, purchasing processes are fragmented and confusing, split between a series of point solutions. The manual effort, uncertainty, and long cycle times make the HR team less productive. |
A one-stop shop to get all of your spending needs handled from initial request to final reconciliation. Automation of end-to-end process for request, approval, payments, and booking saves time and reduces risk and errors. |
| Reimburse candidates. |
Candidates often spend their own money on travel (including mileage) and require reimbursement. Sometimes they must get paid for time for assignments. |
Easily pay as a vendor including easy mileage calculator. |
| Support new employee software, hardware, and onboarding needs. |
One of the first interactions a new employee will have is with purchasing items and subscriptions that they need to do their job. It’s important to know what the company will cover. Delays will cost new employees valuable time, and confusion will diminish employee engagement. |
Make this first impression a great one with an intuitive user interface that makes it easy for purchases to be compliant and fast. Use spend analytics to help eliminate bottlenecks in the approval process. |
| Support employee benefits. | When companies offer their employees perks, like health club memberships, meals, or home office items, it can be a hassle to administer the funds and control the costs. |
Effortlessly create customized employee benefits programs, like “Home Office Benefit” and “Wellness Benefit” cards, each with pre-set spending limits to align with your company’s budget and policies. Empower your employees with the resources they need for well-being and productivity without burdening your accounting team. |
| Support the hiring of contractors. | When hiring contractors instead of employees, the company must collect a W-9 and report 1099 income to the IRS at year-end. |
Easily collect W-9s via Airbase and link the first payment to receipt of the document. The system will perform both domestic and international tax ID verifications. Automatically generate a year-end 1099 report with all required data. |
| Support and control spending for company and team events. |
HR is often charged with running internal events from lunches to company-wide offsite meetings that involve complex airfare, hotel, meals, and mileage. Tracking and controlling for budgets when charges are coming from multiple sources is difficult. |
Create tags for events to track and report on all spend associated with it. |
| Rapid employee reimbursements that don’t attract payroll tax. | When employees are reimbursed via a payroll system, it can incorrectly create an income tax event. | Provide reimbursements directly to an employee bank account bypassing payroll to avoid tax confusion. |
| Report on department-level spending against budget. | Gathering data from various types of spending that is usually housed in different systems (bills, cards, out-of-pocket) is time-consuming and error-prone. | Spend analytics provides real-time reporting on category, vendor, and project-level spending. |
| Give access to corporate cards for each team member who needs them. | HR teams often use one corporate card for making purchases. This makes it difficult to reconcile card spend — whose charges they are, what was the purpose, was it approved, etc. | Allow team members to create individual virtual cards to pay vendors. Capture approval workflows for each transaction, categorize and tag each transaction for easy syncing to the general ledger. |
| HR Obligations | The Problem | Airbase Solve |
| Attract and retain the highest quality talent by keeping employee engagement high. |
When employees are frustrated by confusing processes, late reimbursements, and delays in getting spending requests approved their engagement plummets. When reimbursements are delayed, employees often end up paying penalties as either interest or late fees on their personal cards. Inefficient, frustrating processes create an unhappy workplace. |
Provide an easy, intuitive, compliant spending process with rapid turn around times that give better access to the tools employees need to be effective. Touchless expense reporting makes it easy for employees and rapid payment gets money back to them quickly directly to their bank account. Airbase users cut reimbursement times from weeks and months to days. |
| Provide equitable benefits across the organization. Support employee spending regardless of location (international or domestic). | Reimbursing or getting access to paying vendors in foreign currencies and/or to allocate those expenses to a subsidiary is complex. Ensuring that it can be done equitably from the same system demonstrates equitable benefits. | Multi-currency payments and multi-subsidiary booking means all employees are using the same system everywhere in the world. |
| Fulfill their “duty of care.” | HR is responsible for making the workplace safe. Employees who fail to follow policies can be put at risk of termination whether it was intentional or not. | Build policy compliance into the system. |
| Protect the organization from financial loss. | Wasted spend, inefficient processes, and fraud all put the organization at risk of financial loss. | Automate a spending process with the visibility needed to eliminate wasted spend, reporting to flag inefficiencies, and a layer of fraud protection. |
| Give access to spending money to new employees and make sure that former employees no longer have access. |
Provisioning qualified employees to spend company money with a clear process for securing the right approvals is difficult. When someone leaves the organization, HR can be expected to make sure all the right stakeholders are notified to deny access to cards and other resources. |
Automatically provision or deprovision employees based on an integration with the HRIS, such as Paylocity. Automatically reassign card ownership when a new employee takes over a role. |
| Support ESG goals. | Companies often set ESG policies that need to be followed in spending practices. | Route all spend request to the ESG specialist. |
