What is spend management? Real-life examples of how it can save you time and money.
Spend management is a powerful way to save your company time and money. Through spend management, you streamline AP processes and gain control over vendor payments, employee reimbursements, and corporate card use.
Of course, implementing any new system can feel like a daunting task. But it’s easier than ever to get started with spend management, and onboarding is much easier than you might think.
Still, with very full plates, accounting teams need a compelling argument for why they should invest their limited bandwidth on a project that involves a shift for the whole company. So, let’s take a look at the ways spend management can transform the role of finance, and your company, so you can decide if the payoff is worth it.
Consider this scenario: As a finance executive, you’re always looking for ways to save money. You’ve been using separate software systems for paying bills, reimbursing employees for expenses, and booking corporate card transactions. These systems do an adequate job, but you’re often left frustrated because:
- You’re drowning every month when it’s time to close.
- You spend a lot of time talking with employees about problems in their expense reports.
- An invoice arrives in your inbox, and suddenly you need to go into Sherlock Holmes mode to understand whether or not you should pay it and, if you do, how it should be booked.
- You’re starting to feel more like a police officer than a collaborative team member.
- Managers and budget owners are constantly asking for up-to-date reports and, although you’re always willing to help, these requests can take hours to compile.
- Let’s be real: You didn’t invest time and money in your education in order to import multiple CSV files.
After spend management.
Here’s what your life will look like after you adopt a spend management platform that integrates with your GL: all non-payroll spend — card transactions, expense reimbursements, and bill payments — are on one platform. This consolidation means that you can see not only where all of your company is spending money in real time, but also enjoy a clean audit trail with all relevant documentation in one place and evidence that all spending is compliant with company policies.
This consolidated information improves your ability to make better decisions and handle documentation requirements with ease. It also provides the visibility you need to control budgets. For example, you notice that your company has been spending a lot on software subscriptions. You can now see this data in the context of your overall budget, and you can make informed decisions about where to cut back. Maybe you decide to discontinue the subscriptions started by former employees, or you might choose to buy in bulk to get a discount. You can also see any duplicates — who knew both Marketing and HR pay for LinkedIn Premium?
Not only do card purchases create areas of waste, they can also create time-consuming tasks for the accounting team. A good example is when an employee leaves a company, but still has active ongoing card charges that often continue unnoticed. With spend management, the system automatically closes down a card after an employee leaves your company. This is handled via an integration with your HRIS that provisions and deprovisions employees from the system.
You’re surprised by how quickly your entire company is onboarded, and they all seem to learn how to use the platform in a matter of minutes. Soon, you can’t imagine life without spend management. Some of the benefits you experience include:
Saved time: With automated spend management processes, you save money by streamlining your processes. Automated systems are more efficient than manual processes, so you can reduce the amount of time and money spent on processing payments. Airbase customers tell us the platform reduces the time to close, and ultimately gives valuable time back to finance and accounting to be more strategic. Yatin Mody, Head of Finance at Postman, says the platform does more work than one half-time employee.
Improved cash flow: Better cash flow helps your business grow and succeed. By managing your spend, you ensure that your company has the cash it needs to operate effectively.
increased transparency: With accurate spending data, you easily identify areas where your company could save money. This transparency helps you make better financial decisions for your business.
Heightened accountability: Clearer visibility in turn creates a sense of accountability. Dmitri Litin, Controller at AspireIQ, describes the shift: “A single source of truth that provides visibility, allows us to be much more direct, and makes it clear that every dollar matters. Holding each individual accountable creates a culture of transparency.”
Improved compliance: Automated spend management systems help ensure that your company is in compliance with relevant spending regulations. Rule-based policies mean you can rest assured that reimbursement requests are compliant, without having to decipher policies for employees. Michael Zheng, Head of Finance at Affinity, describes his company’s experience: “Through Airbase, we are able to handle invoices, POs, and credit card payments with the appropriate level of compliance and internal controls, while adding efficiency to the monthly close.”
Cash back for corporate card spend: Many spend management systems, like Airbase, offer cash back or other rewards for spending on corporate cards. This can help offset some of the costs of implementing a spend management system.
Schedule a demo to find out how Airbase can help your company realize the benefits of spend management.
Airbase offers a one platform solution to manage all non-payroll spend. It provides oversight and control over spending with real-time reporting and automatic syncing directly to your general ledger. Control all payments – physical cards, virtual cards, ACH, and checks – from one place. Close faster. Empower employees. Control spend.
Finance & Accounting Slack Group.
Join to connect with other finance professionals building great companies. Ask questions, provide your perspective, join the conversation, find resources.