The spend management equation, solved for people

10 May 2023 | 15 Shares

Source: SAP Concur

Depending on what they read, business leaders and owners can get some pretty contradictory messages about technology’s role in their organisation. On the one hand, it’s increasingly apparent that the people in a company value being valued – that might consist of the option to work from home or a company policy that positively encourages a better work-life balance. On the other hand, those same business decision-makers are told that automated technology systems can make the organisation much more efficient, lower costs, and get the best out of their employees.

It’s interesting to consider whether a positive, employee-first approach to running a team means keeping digital systems at arm’s length. After all, many believe that software and automation reduce the people in a business to not much more than figures on a balance sheet or a KPI metric.

People-focus and technology simply aren’t mutually exclusive. Consider, for instance, employee wellness apps. These might promote meditation, prompt people to take a quiet moment’s reflection, or connect employees with a one-to-one counsellor or life coach. That’s a great example of technology’s use to help workers be happier, less stressed members of the company.

Similarly, using technology to automate mundane routines frees people to concentrate on tasks that are more rewarding. That keeps them engaged, and helps them achieve career goals, too.

Companies often find themselves paying highly-qualified professionals to do little more than copy-and-paste, or manually collate paperwork. It’s not unusual for a fully-qualified (or even Chartered) Accountant to be doing the job of an admin assistant, simply because there’s no alternative. A typical example is in spend management, where manual processes still dominate even in some large Finance departments. In addition to the obvious inefficiencies, it’s a proven fact that bored people make mistakes.

When technology is chosen well and deployed with care, there’s no reason why employees shouldn’t receive positive benefits from a new automation platform or piece of software that may have, at first glance, little to do with their well-being.

Spend management and the coalface workers

The current economic times mean businesses have to make some tough decisions, and hard circumstances also affect employees. Everyone is feeling the pinch right now, with some surveys finding that as many as 70% of an average workforce is concerned with how the increased living costs are affecting their personal finances.

So it would be tempting to enter into any discussion about finances and especially spend management (AKA business expenses) with the mindset of “tightening the purse strings.” But if we can think differently about the way suppliers, contractors, and third parties get paid, we can hugely improve the well-being of everyone in the company.

Every business has to spend money. Whether a lunch on-the-go bought by a salesperson onsite, an order of components from a supplier, or purchasing some new software, nobody on the payroll wants to be out of pocket – even for a day or two. In the current economic climate, that’s particularly important. And issued company credit cards or expense accounts can be a major source of worry for employees. At 4:00 am, these are the types of issues going around troubled minds:

  • When will I get reimbursed for out-of-pocket expenses?
  • What have I done with my receipts, and what happens if I’ve lost one?
  • Does what I bought constitute an allowed business expense?
  • Have I gone over my allotted purchase limit this month?

Employees know too that their employer is also likely finding the going tough. Practically half the average workforce worries their manager will think badly of them if their expense claims are high.

For those in the Finance office, different questions are being asked around the monthly ritual of expense and spend reconciliation:

– Who’s spent how much on what?
– Which cost centres get which purchases allocated against them?
– Which client(s) need to be billed for what?
– Is every purchase a righteous expense? (And is there a receipt?)
– Are claims properly categorised? (Most finance leaders say not.)

Knowledge is power

There is a relatively simple way to ensure that everyone in the company, at all levels, can keep a handle on outgoings. Technology platforms can not only automate processes but also empower employees, clarifying their limits and responsibilities, making payments easy, and letting the Finance team know exactly what’s happening in virtual real-time.

Back in the day, this type of solution was called an expense management system, but the latest technologies are much more adept than merely handling the paperwork of an expense account. Good software design and extensive user testing mean that today’s spend management systems are placed in the hands of their day-to-day users via their smartphones.

With an app, it’s simple to take pictures of receipts, expense approvals, and relevant paperwork and upload them right into a central database store. The app handles the categorisation of expenses, keeps a running tally of amounts, and critically, removes the responsibility for manual paperwork from busy people.

Under the hood, a great deal is going on, but that’s not visible to most users. Invoices from suppliers and any recorded costs end up in the right area of the company’s accounting software, with optical character recognition deciphering printed invoices, receipts, and even delivery notes. For the end user, tasks like grabbing some components for a job or settling a supplier’s account are just a matter of firing up an app. While back at the office, the Finance professionals don’t spend days every month chasing receipts, grilling employees about their spending (we’d hope “grilling” is an exaggeration), and wondering whether they are seeing the full picture of spending every month.

The intelligent business

Smart businesses use smart technology but consider their tech choices carefully. Taking a problem-focused approach to outgoing monies in challenging times will hopefully stop companies from picking a solution that doesn’t necessarily solve the issues they’re experiencing. If those issues include stressed team members who are inconvenienced by manual spend processes, then solving for the employee is the best approach.

People given software and hardware tools will only use them if a) they’re easy to use, and b) they get some benefit from their use. If a technology solution also helps your employees’ happiness levels, so much the better. But there’s also another “win” for every organisation.

Thanks to today’s technology and its emphasis on integration, spend management systems can show business decision-makers and owners collected data to help them reach better, longer-reaching decisions. Information gathered from across the company that’s been sliced and diced by smart software can show trends, help make predictions, highlight cost centres, and identify bottlenecks. As the company grows, this type of insight can help plan good strategies for expansion.

In the more forward-looking finance departments, advanced technology is beginning to creep into workflows. Some 55% of finance and HR decision-makers use AI to ensure all taxable employee benefits are compliant with government regulations, for example.

There are plenty of spend management systems out there, but mostly they were designed as a product looking for a problem. The best of the best – like SAP Concur – started out trying to solve people’s day-to-day problems and make their lives easier. That’s the type of technology that can grow with a business.