THE CFO’S GUIE TO Modern Spend Management

1The CFO’s Guide to Modern Spend Management

Modern Spend Management

THE CFO’S GUIDE TO

2The CFO’s Guide to Modern Spend Management 2The CFO’s Guide to Modern Spend Management

Table of contents

Introduction

Challenging the status quo

Spend management : the new touchstone

The modern business payment ecosystem

Classic spend management use cases

Tangible results

Integrate spend with your back-office favorites

Finance as a business partner

How to know if you need spend management

Buyer’s guide: choosing the right solution

Join the spend management evolution

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Introduction

The corporate world is full of distractions. Employee inboxes are full of ‘‘friendly reminders,” “quick calls,” and of course, endless paperwork.

It’s impossible to focus on strategy with so many interruptions. If your teams can’t focus, they can’t execute. And if they can’t execute, the company can’t grow.

As we’ll explore, spend management offers an elegant evolution of several very common and tedious processes. It lets you see company spend as a driver, not a hindrance; a motor, not a blocker.

We founded Spendesk on the belief that employees need freedom to do their best work. Freedom to test, to try, and sometimes to fail. But also freedom from distractions and roadblocks. The freedom to focus.

Simple, clear processes that everyone understands are vital. Complexity leads to confusion, and confusion leads to frustration, admin, and wasted resources.

At its heart, spend management is incredibly simple. It brings credit cards, expenses, and accounts payable under one umbrella: spend.

This means one system, one process, and one source of truth. Automation takes care of the repetitive admin - a major victory - and a unified process eliminates confusion. The result is a high-functioning business, free from the restrictions faced by others around them.

Spend management lets your teams do their best work. This guide shows you how.

Enjoy!

Rodolphe ArdantCEO & Cofounder of Spendesk

Introduction

Rodolphe


Top 3 frustrations for finance teams

Challenging the status quo01

Spending company money is surprisingly difficult. And whether it’s a company credit card, expense report, or invoice, every payment creates administrative debt. Even with contactless payments, digital processing, and the cloud, the work keeps piling up.

Even worse, many companies don’t even know where their money goes.


Even worse, many companies don’t even know where their money goes:

CHASING RECEIPTS

TIME WASTED ON RECONCILIATION

NO PAYMENT AUDIT TRAIL

25%

20%

14%

Employees find workarounds to decentralise payments

Finance teams want centralization to keep control

Large volume & variety of information to process

Lengthy process to make information actionable

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4 3

2

COMPLIANCE VISIBILITY CONTROL SECURITY RELIABILITY

Finance teams are under increased pressure

Source: YouGov & Spendesk

https://blog.spendesk.com/en/how-companies-spend


Existing solutions are ripe for disruption

Company cards

The go-to solution for most companies. But they create lots of issues for finance teams, who’re quick to remove them when given the chance. Problems include:

• Little control or visibility for finance teams

• Lots of additional admin work at month’s end

• A serious fraud risk

• Most employees don’t have one



More suited to company card

EMPLOYEES FINANCE


How much visibility do you have over company spend?

I DON’T KNOW GOOD VISIBILITY

FULL VISIBILITY

LITTLE VISIBILITY

NOT VISIBILITY AT ALL

8% 20%

27%

20%

13%

Source: YouGov & Spendesk

https://blog.spendesk.com/en/how-companies-spend


Manual invoice processing

Managing supplier invoices typically requires lots of internal communication and effort from all parties. The standard invoice process has key problems:

• Requires manual data entry

• Checking approvals is slow and tedious

• Employees usually offload the invoice and forget about it

• Finance teams never have enough information

Thankfully, recent upgrades have brought us a long way. Let’s look at the specific improvements available today, and how they all fit together.





EMPLOYEES FINANCE

Expense reports

Employee expense reports are still painfully widespread. In many companies, they’re the default way to manage expenses, despite obvious issues:

• Administratively intense, especially when done on paper

• Unfair on employees who have to use their own money

• Little visibility or control for finance teams

• Meant to be a workaround, at best




EMPLOYEES FINANCE


We’ve seen great advancements in payments, with new and old players investing in better experiences for finance and employees. These great upgrades come in various shapes and sizes, but most focus on solving a unique spending use case:

Each of these is a vast improvement. But accessing ALL of these upgrades in one solution is even better. Spend management solutions do exactly this, helping companies streamline finance operations. (More on this next chapter).

The modern payments ecosystem

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Digital expense management

• Handy mobile app• Easy receipt collection• Faster reimbursements

Smarter company cards

• Easy access to funds• Smooth reconciliation• Monitor spend in real time

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Steamlined accounts payable

• Full visibility over spending

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“We were using a digital banking app but we didn’t have any control. We were missing supporting documentation, like receipts in some cases. We needed a better software that would give us transparency, visibility and control. And that’s exactly what Spendesk gives us, in real time.”

Georgios FilippatosFinancial Controller, Growth Tribe

• No long email trails • Accounting integrations


Spend management breathes new life into those tired old standards. Small technological advances combine to create one smooth, simple spending system.

What is spend management?

This is a modern, holistic approach to company spending. Businesses can simplify the hassle of paying, tracking, and optimizing what they spend at work, with a centralized process and decentralized access to funds.

Achieving this depends on five important principles:

That final point is vital. There’s a fundamental difference between having separate systems for each payment type, and having everything your team needs in one place.

Spend management: the new touchstone

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Employees must have access to funds when and where they need them

Managers must be accountable for their budgets, with easy ways to track them

Finance must have control over the system as a whole

Payment data must be available and actionable in real time. No more waiting until month end

It must be “all in one”: card payments, subscriptions, expense claims, & accounts payable


3 benefits of all-in-one spend management

A built-in process

With spend management systems, the process guides employees through each step in the payment cycle — to ensure teams understand and follow core processes.

Ownership & control by default

Individuals own their payments, managers own their budgets, and finance teams own the bigger picture. Financial controllers can empower others to take action and move faster, safe in the knowledge that the rules and limits set will keep everyone on track.

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Better financial decision making

An all-in-one system means one source of truth. Finance teams can check the status of any individual payment, or company spend as a whole, in seconds. They always know who’s spending what, and have the data they need at their fingertips.

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“I honestly believe that I save a couple of days a month from not ha-ving to respond to queries about payments, spending, or who’s res-ponsible for each cost. People can now just look it up themselves.”

Aaron TownsendFinancial Controller, Habito

What makes Spendesk different?

Loved by everyone

Easy-to-use payment methods and intuitive interface make all employees’ lives easier.

Built for finance teams

Control and visibility over company spending come first.

A time- and money-saver

Great spend management helps your bottom line, both by identifying wasted spend, and keeping your key players focused on more important work.

One place for all company spending

Approvals & Policies

TeamBudgets

Invoices Payments

Expenses Tracking

Virtual & Physical cards

Spending Reports

Pre-accounting Automation



Different companies spend in different ways. Here are five very clear and common uses for spend management.

Travel spending

Travel is typically the biggest source of employee expense claims, and leads to lots of work for both travelling employees and finance teams.

Spend management solves this in a few simple ways. First, travellers have their own secure debit card to use on the road. Which means no out-of-pocket costs, and no expense reports when they return. Which is also a huge win for finance.

The mobile app lets travellers capture receipts easily, and any unforeseen costs can also be reimbursed directly through the platform.

“We’d get hundreds of paper forms, and we’d have to check and en-ter all of these one by one. Once we discovered Spendesk, this pro-cess changed overnight. Now, they upload their claims and receipts directly to Spendesk. My team just has to check that all the right details are there, and then we can push it to Xero and reimburse the member.”

“And now we can even reimburse people directly from Spendesk, which just makes things faster than ever.”

Sarah LinningtonGovernance and Compliance Director, BSG

Classic spend management use cases

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“If an employee wanted to pay for new software previously, they would need to talk to the office manager who would either purchase it for them, or would physically go to their laptop and input all the banking details. However, employees can now do all that with the vir-tual card. There was a lot of extra admin involved that we don’t have to worry about anymore.“

Martynas IvanovasFinancial Accountant, Newzoo

Recurring subscriptions

With so many new and exciting subscription tools and services available, they can quickly become unmanageable. Each new tool is one more payment cycle to manage. And when every SaaS tool has a different owner in the company, it’s nearly impossible to have clear visibility over what’s being spent.

But spend management tools create a unique virtual card for each subscription. Instead of having dozens on one credit card, you have one card per subscription. You can easily see when renewals are due, spot duplicates immediately, and can cancel or alter cards at any time without affecting all the others.

Invoices (accounts payable)

At most companies, paying supplier invoices is either too complex or far too simple. Complicated tools make the system confusing for employees, and finance teams have a lot of communication to do. Simple processes usually involve emailing an invoice to the finance team, which puts all the work and onus on them.

Invoicing with spend management is the Goldilocks in the middle. Employees submit invoices through the same system they already know, and which verifies that all information is complete. It even extracts key information automatically, so team members have minimal work to do.

The finance team is notified and can process the invoice directly within the system. No emails or conversations required, and all the necessary information is included. This is more enjoyable, more scalable accounts payable.


Out-of-pocket expenses

Occasionally, team members find themselves in need of company funds but with no way of paying. They might take a client to lunch or pop out for supplies and forget the company card. Perhaps they never had a card in the first place.

Spend management helps in two ways:

They have their own card. Employees don’t need to ask for a card since they have their own.

They can make claims in seconds. If they don’t have their card, they can pay out of pocket and then claim reimbursement right there on the spot. They submit a receipt, their manager approves, and finance can have the money in their account by the next business day.

Finance teams can process reimbursements whenever (and wherever) they want. Instantly, once a week, or once a month - it’s up to you. And when everything is digital and receipts are submitted, it only takes a moment.

Digital petty cash (miscellaneous)

Petty cash represents a small but often fraught company payment method. The pro-blem is actually the same as for expense reports: employees don’t have access to com-pany funds. So many companies keep a petty cash float for minor ad hoc purchases.

Spend management software removes the need for a petty cash box altogether. Teams have secure access to company funds to pay either online or in-store.

You can even pre-approve certain amounts and types of spend to replace what might normally come out of petty cash. For instance, every employee could be pre-approved for up to $20 for stationery or meeting supplies.

The result is a trackable payment process that’s still every bit as convenient as petty cash.


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Aside from the obvious goal of improving inefficiencies, what are the expected outcomes from a spend management strategy?

Give safe access to company funds

The biggest issues with company payment methods come from the fact that most users don’t have access to them. Unless every employee has their own card - which is never the case - they either have to bother others, or spend out of pocket. This is precisely the dynamic that spend management exists to solve.

Every employee gets a safe, secure debit card to use under certain conditions. The rules and limits are built into the system, so they can’t put a foot wrong. But they can move quickly and work efficiently.

This is great for the company, and also for the employee. You remove the hassle of company cards and expense claims, and the employee can keep their own money for themselves.

“Instead of having the finance team being the baddies chasing people down, the system does it for you automatically. It has been life chan-ging for Finance. You don’t have to spend your Fridays chasing people around the office to get the receipts.”

Cerrith MooreHead of Finance, Moneybox

Track spending in real time

For finance teams, knowing who’s spending what, where, and why is vital. But typically they have to wait until the end of the month to know for sure. Until the credit card statements arrive and expense claims are processed, you can’t actually evaluate company spending.

Tangible results05


Spend management tools flip that on its head. You see every card, expense, and invoice payment the moment it’s made. In fact, you even see accrued payments you’ve committed to before they’re paid.

No transactions go through without approval (although some can be pre-approved), and every purchase is in the user’s name. Which means no more ghost spend, and no unwelcome surprises.

Monitor & optimize budgets

Budgets have always been disconnected from payment methods, which presents an issue. Managers might have Excel spreadsheets that set out their spending, but these are difficult to manage and constantly out of date.

Spend management connects card payments and expenses with budget software. Managers can actively track what’s been drawn, and choose wisely where to spend the remaining balance. And no need to check spreadsheets as they go.

Put budget owners in charge of their teams, while finance teams keep control of the bigger picture.

“Spendesk is one of the tools that will allow us to scale. We can add people, new expenses, and expense volume, without adding anything to the back-office because it’s that far automated. And it still keeps us in control of things.”

Tom LibbrechtVP Finance, Silverfin

Automate account reconciliation

The end of the month is stressful and tedious for finance teams. Accountants and financial controllers spend hours - even days - checking that every payment reported matches the bank account and credit card statement.

The biggest time-wasters are errors and missing receipts - things which a machine can check for. Which is exactly what spend management systems do. They identify duplicates and missing receipts, and even notify employees of required actions.

You’re essentially reconciling payments in real time.


Simplify purchase orders

One benefit of spend management is that employees can make smaller purchases without help. But sometimes you still need more formal purchase orders. These let the employee or manager spell out exactly what they need, then the purchasing manager can review and execute the order.

Once again, an all-in-one solution means that both small and large transactions happen in the same familiar tool. And unlike paper purchase orders, every person in the chain can check the order status at any time.

Employees fill out POs perfectly (guided by the software), and then can watch as they’re approved, the goods are ordered, and the payment is made. And managers and finance teams have complete visibility as well.

Settle supplier invoices

Similar to purchase orders, processing supplier invoices usually involves lots of added admin and data entry. Invoices get lost in the shuffle, and suppliers go unpaid.

Spend management digitizes invoices right away. When a team member receives one, they upload it to the tool which extracts key information. This begins a clear workflow: the employee makes a request, their manager approves, and the finance team can process and pay it on time.

It’s this “process within a platform” that makes spend management so valuable.

95%of customers rate Spendesk as easy to use

80%of finance team time saved on spending admin

4xfaster month-end close (on average)

97%of customer are very satisfied by the quality of the customer support

Clear benefits with Spendesk


While spend management solutions should be “all-in-one,” they still have to work well with your other finance tools. The goal is to have something that easily fits in with your existing tool stack, and adds value without creating complexity.

Accounting automation

One of the trickier aspects of business accounting is formatting. Finance teams translate the information provided by banks, credit card companies, and employees into their books. This can be quite a challenge, because so much of this information is unsuitable when you receive it.

This leads to data entry, double-checks, and lots of time spent on repetitive tasks.

But unlike accounting tools themselves, employees can easily use spend management systems. When they make a payment, the tool ensures the data is complete and accurately recorded. So you don’t need a special accountancy training for the whole team. They just need a login.

Integrate spend with your back-office favorites

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“We use Netsuite, which is a pretty huge system. We had a lot of help from the Spendesk team getting the two tools to work together. And now that it’s up and running, everything is very quick and easy.”

Aaron TownsendFinancial Controller, Habito

A two-way integration in real time

As mentioned in previous chapters, spend management happens in real time - not at the end of the month. And you can sync this data with accounting tools in real time also.

The result is real-time account reconciliation. Which is almost unheard of.

This “real time” aspect is so valuable - that’s why we keep repeating it. Finance teams work in cycles, with the most intense periods arriving at the end of the month, quarter, and year. But if your books are constantly reconciled and ready, those intense periods last a few hours - not days.

“The speed with which a payment moves from Spendesk to Xero makes the month-end close simple. There’s no lag - we don’t have to clear everything before a certain date to make sure it’s accounted for. We’re essentially reconciling in real time.”

Greg StoddartFinance Manager, Echo

And because payments are made using the spend management system itself, there’s no third party credit card or bank statement to deal with. You just have accurate, up-to-date information, ready to export.


Easy reporting

CFOs and financial controllers are constantly called upon for reports. The quicker they can find and use accurate data, the better. Simply digitizing finance processes is already a step in the right direction.

Spend management tools make this even easier by delivering digital, up-to-date spending data by default. A glance at the dashboard shows you where your money is going, and which budgets are in jeopardy.

You can also easily export this spend data to your favorite reporting tools with no effort.



The idea of finance as a business partner is popular and highly desirable. Finance teams have specific skills and data that most others don’t. And CFOs in particular are looked to for key business intelligence and critical thinking.

So can better spend management systems help make this a reality? You bet.

Driving alignment between departments

Ultimately, finance is a service-oriented team. It needs to keep the company compliant, help it grow, and field questions and concerns from across the organization. So the better it serves others, the more successful it will be.

Let’s focus particularly on the relationships between key C-suite figures. This of course trickles down through departments.

CEOThe ultimate decision makers, CEOs need to make informed choices about company expenditure. To help, the CFO can deliver live budget updates and show precisely how funds are deployed.

CMO

CRO

CTO

The CRO is particularly interested in the cost of goods sold, and needs to know production expenses down to the cent. They can know exactly how much was spent with each supplier over a given period, and monitor fluctuations.

The CTO helps to implement spend management software in the first place. They want to see that new tools are used to great effect, and that the company is modernizing and digitizing.

The CMO has their own budgets to worry about, but they also need the business teams (sales, marketing, & customer success) to work freely and effectively. Having their teams spend hours filing expense reports certainly doesn’t meet this expectation.

Finance as a business partner07

21The CFO’s Guide to Modern Spend Management 21The CFO’s Guide to Modern Spend Management

Better relationships with external stakeholders

CFOs also have a few key external stakeholders to think about.

External accountants

We saw previously how helpful spend management is for accountants. If you can deliver properly formatted, error-free data to external accountants, they can do their work quicker. Which means they either have more time to help on strategy, or you pay them less. Which is a win/win.

The board

The board needs to know that the company is in safe hands and managing its money well. A strong track record with spend may be reason to free up more capital in future. CFOs can help demonstrate this with highly accurate spending reports, and by showing how safely money is treated.

Auditors and the tax office

Many companies live in fear of an eventual audit. But clear and accurate transaction data means you have nothing to worry about. Spend management ensures you have all the information auditors need, ready at all times.


Every business could benefit from systems like these. They’re more structured and safer than the status quo, and they’re also quick and easy to use.

But as with most company processes, there’s always a question of timing. Small and young companies typically have bigger fish to fry. More established companies might have systems in place, and based on your company’s stage, here’s how you might approach spend management.

How to know if you need spend management

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What to look forDo any of these common issues sound familiar?

Slow credit card reconciliation Missing receipts

Ghost spend (unexplained payment)

Employee questions and confusion

Finance team fatigue

Neobank or expense management app

At this stage, there’s no need to create robust spend processes. The company will either stay small and easy to manage, or grow soon enough. You’ll be able to choose a spend management solution when you grow further and have a more solidified company structure.

Spend management solution

As soon as you hit 20 or so employees, spending increases and admin starts to pile up.

Choose a spend management system that will continue to grow with you, and can adjust as your company structure changes.

Company size

0-20 FTEs +21 FTEs


Hopefully by now you’re onboard and want to see spend management in action. We shared a grid of the spend ecosystem in an earlier chapter, and it’s easy to feel confused. You likely don’t know exactly what you need, or which providers offer what.

You’ll likely do a range of demos, watch videos and slide decks, and talk to plenty of nice people. Here are the key questions to ask as you go through this process.

The basics

• Do you offer an all-in-one solution with employee cards, virtual cards, expense automation, and invoices?

• Does every employee get their own login and payment methods?

• Do employees have a mobile app to request top-ups and submit receipts?

• Can the finance team see all payments from one dashboard?

• How does this make the finance team’s work easier at month’s end?

• What are the different roles available in the platform? What access do Financial Controllers have compared with other employees, for example?

The finer points

• How do you ensure that employees submit receipts on time?

• Do the cards have spending limits for employees? Are these customizable?

• Can we block and unblock cards whenever we need to?

• Can we set team budgets and have payments automatically draw from these?

• Can controllers change budgets and limits at any time, at the individual level?

Buyer’s guide: How to choose the right spend management solution

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The back end

• How do payments sync with our general ledger?

• Can we track accrued spend versus actuals?

• Can our expense accounts and GL codes match exactly what we have in our accounting tools?

• How do we export data?

Service and set up

• How long does it take to get started?

• Can we call or chat whenever we have issues, or do we have a set amount of support time per year?

• Do you offer strategic help to make sure we get the most from the solution?

• Is there a term commitment, or can we cancel any time?



Join the spend management revolution

It’s tempting to describe everything we’ve seen in this guide as a glimpse of the future. But the truth is, these tools exist and work beautifully right now.

In our private lives, we already enjoy budgeting apps and neobanks. We can transfer money easily between friends, and can pull up a complete credit card history in seconds, from anywhere.

Smart leaders have realized that this is possible in the corporate world too. There’s no need to wait - the systems you long for are already here.

But digital processes do help you prepare for the future in broader ways. Digital-first companies are ready for anything.

How will you cope as more employees want to work remotely, and as geographical borders become less important? Can your teams pay without a credit card, and can you track those payments?

And you can offer your finance team the chance to grow alongside new technology. It’s easy to see that certain aspects of the role - data entry and account reconciliation - won’t be necessary much longer.

Future finance leaders will spend more time on strategy and operations than on updating spreadsheets. Some already do. Shouldn’t yours be one of them?

Choose the only all-in-one spend management solution made for finance teams first

Book a free demo

https://www.spendesk.com/schedule-a-demo/

THE CFO’S GUIE TO Modern Spend Management

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