When Finance and HR Team Up…Culture Flourishes

Building a healthy spend culture.

Our outgoing Airbase CFO, Aneal Valurupalli, recently gave a provocative presentation at CFOLC in Dallas. The audience was made up of CFOs and other finance leaders from small to enterprise-level organizations.

Aneal asked them to think about employee spending as a cultural issue, not an accounting one. He also encouraged finance leaders to take seriously their role in creating a healthy spend culture.

Human resource leaders have long been concerned with building an effective and reflective company culture, less so the office of the CFO. HR leaders can bring important lessons about building organizational culture which, when applied to employee spending, improves employee engagement, saves time, and increases profit margins.

Aneal’s perspective has been shaped by his role at Airbase, which also included running the Customer Success team. This stands to reason since the Airbase platform has been built to support finance teams in their efforts to capture, control, make payments, and report on spending. His background as a multi-time CFO and as customer #1 for the Airbase platform allowed him to direct the Customer Success team to help our customers get the most from our spend management platform.

Taka Tanahashi, Director of Finance & Accounting, Controller, Pilot Fiber

It’s the culture! Technology is just the enabler.

As part of his CS work, Aneal found that in many cases, the challenges Airbase customers faced were not related to software functionality but behavioral ones. According to Aneal, building the right culture, one that is designed to optimize outcomes, is the key. To create a healthy spend culture it’s helpful to think of an orchestrated process that brings all the synapses of spend together. Aneal provided a playbook to do just that.

Aneal has identified the characteristics of an unhealthy culture and the very real business issues it raises. He also provides the characteristics of a healthy spend culture and the benefits that it brings.

An unhealthy spend culture.

In a reactive culture, transactions happen before stakeholders have time to evaluate and influence them. This in turn leads to missed cost-saving opportunities like negotiating better terms or leveraging an existing contract or vendors that another department already uses. It also leads to wasted spend since employees often make duplicate, unnecessary, or inefficient purchases. Being in reactive mode means sub-optimal vendor selection where experts in IT, InfoSec, or procurement are not consulted before a contract is signed.

An unhealthy spend culture is one where people, processes, and systems are siloed. This results in long and confusing approval cycles that in larger organizations can take several months and truly impede the efforts of employees trying to grow the business. When things are siloed, it’s much harder to get the data and analytics needed for decision-making and risk management. Finally, siloed environments place a heavy burden on finance teams to police policy compliance across the organization.

An unhealthy spend culture is doomed to operate in a tactical realm, lost in the weeds of unnecessary fire drills, inefficient workflows, and missed opportunities. Think of the finance team preoccupied with wrangling data from several sources to get leadership the reporting they need. Or the AP manager delaying a financial close as they send several missives requesting an employee to submit receipts for expenses. Manual work like coding transactions and reconciling the books keeps finance teams stuck in low-value but necessary work without time to focus on strategic initiatives.

Michael Zheng, Head of Finance, Affinity

Spend orchestration improves the employee experience and finance’s ability to manage the risks and costs of non-payroll spend. For example, Airbase customers cut their processing times significantly, which makes for satisfied employees. Finance teams save valuable time and earn a positive ROI from better spend management.

Finally, Aneal gave concrete examples of how finance leaders can use Airbase’s system and its reporting feature to drive cultural changes in the organization.

From reactive to proactive.

The shift from reactive to proactive spending decisions makes for a more satisfying work environment.

1. Provide a one-stop shop for all company spending (payroll and non-payroll).
2. Make it clear and easy for employees to request spend in a compliant manner with a guided experience.
3. Employees get reimbursed rapidly with easy, no-touch expense reporting.
4. Route all new spend requests to expert stakeholders in an integrated workflow.
5. Flag renewals before they occur so that decisions to renew can be properly vetted and analyzed.
6. Cut the waste out of the system by providing visibility into spend for all stakeholders before it happens.

G2 review

From siloed to collaborative.

Providing a user-friendly platform for collaboration makes cross-department communication easy.

1. Include all stakeholders — employees, finance teams, legal, IT, InfoSec, procurement, etc. — with a single front door for all spend.
2. Give transparency to all stakeholders to view every stage of the process from initial intent to spend to final reconciliation.
3. Integrate the spend management system into the business systems used by stakeholders like Jira, DocuSign, Ironclad, and Asana.
4. Automatically route all spend requests to the required stakeholders for type and size of spend.
5. Use spend analytics reporting to surface blockages in the workflows and work with chronic offenders to address issues.

From tactical to strategic.

Automation saves time and reduces errors, leaving more time for initiatives with strategic impact. Use spending insights to help drive an optimal spend process.

1. Unburden employees from confusing spend processes to free them up to focus on their jobs.
2. Free up time wasted on administrative tasks that can be handled by technology.
3. Use spend analytics reporting to track cycle times, identify individuals creating blockages, variance to budget, and expected future spend to drive improvements in the process.
4. Model solutions that show a bias toward automation so that employee focus on strategic initiatives is reinforced.

Chris Morello, Director of Accounting, SeekOut

Improve employee engagement.

HR is keenly aware of the toll that turnover takes on an organization’s ability to succeed. They also know that workplace frustrations can add to attrition, especially ones that delay access to the resources employees need to be successful. It’s therefore in their best interest to collaborate with finance to provide an easy, rapid, and compliant way for employees to access the tools, services, and products that employees require. Building a spend culture that improves employee engagement benefits finance teams and HR teams alike.

G2 review

The ultimate collaboration takes place at the leadership team level, where cross-functional themes can be explored and operationalized. The collaboration between finance and HR leadership should not be limited to budgeting and forecasting discussions. The two important leaders can expand their goals to include getting their spend culture right. As a G2 reviewer pointed out, their employees will thank them.