Table of Contents
Key Takeaways
Key takeaways
- Business spend management challenges are often linked to outdated policies, technology and practices.
- The key spend management trends for 2025 center on solving these stressors through reviewing policies and upgrading tech stacks, among other initiatives.
- For finance teams looking to modernize their system, avoiding or addressing 5 of the most common spend management challenges can streamline the process.
Spend management is a challenge for businesses of all shapes and sizes, and distributed spending is only adding to the complexity.
Even the world’s top companies have difficulty keeping employee spending in check. Wells Fargo fired or suspended more than a dozen employees and investigated dozens more after it was discovered that they had violated company expense policies. Under Armor removed two of its top marketing executives after extravagant gifts and nights on the town showed up categorized as “marketing expenses.”
While technology has changed how business is done in nearly every other department, financial processes look very much the same as they did 10 or even 20 years ago: manual record-keeping, unruly Excel spreadsheets, mountains of paper receipts, and glacial approval workflows. These outmoded processes are costing businesses thousands or even hundreds of thousands of dollars every year.
It’s past time for spend management to get an overhaul for the modern era. Here are the five most common problems of outdated practices for corporate money management—and the digital-first solutions that can help solve them.
Challenge 1: Dependence on shared physical credit cards
Credit cards have been a staple of the modern office since their introduction in the mid-20th century. But two decades into the 21st century, continuing to make physical credit cards the center of the purchasing process is holding businesses back.
Without intelligent controls, shared physical cards can result in murky audit trails and hodgepodge spending. For example, a marketing leader’s corporate card might get passed around to different team members making a variety of purchases, perhaps without first obtaining the appropriate approvals. The cardholder may not even know what was spent and why, which can lead to a lot of awkward conversations.
When the credit card statements and expense reports come in, the finance team is left to piece together incomplete transaction data about who bought what and why. They are forced to spend time chasing down employees for receipts and conduct best-guess accounting to close the books.
Challenge 2: Inaccurate and late expense reports
Submitting expense reports is time-consuming, reactive, and error-prone. When this is a component of your purchasing process, you’re counting on your employees to record and submit all of their expenses accurately.
The data tells us that doesn’t always happen. In one report, 23% of employees said that “it is acceptable to exaggerate expense claims,” while 39% of managers admitted to signing off on an expense report that didn’t adhere to company policy. And those numbers don’t account for all of the reports that get misfiled by accident or those that never get filed at all.
Furthermore, employees don’t always submit expense reports in a timely manner, which can delay month-end close. Often this is not because they intentionally want to make things difficult for finance, but because filling out an expense report would take too much time away from the pressing tasks that directly relate to their job function. It is very frustrating for employees to take hours out of their day to manually go through this process, especially since the workflow is separate from the rest of their jobs.
Challenge 3: Slow approval process
Employees want to make purchases quickly and without bureaucracy. If they need to buy something to do their jobs, having to wait several days to get approval from managers and executives can slow productivity, not to mention frustrate the workforce.
It’s not just purchase requests, but expense reports as well. According to Certify’s 2019 Travel & Expense Management Trends Report, it takes 43% of organizations eight days or more for an expense report to be submitted, approved, and reimbursed. This can be frustrating for employees who spent money out of their own pockets.
Challenge 4: Lost receipts
At a time when paper has disappeared from almost every other area of business, paper receipts continue to play a surprisingly central role in the way spending is tracked within organizations. According to the Certify report, more than half of organizations (53%) report that their biggest pain point related to expense management is “employees losing paper receipts/submitting without receipts.”
Without receipts, it’s impossible for finance teams to accurately record the expenses being incurred across the company. That means businesses are essentially flying blind and relying on best-guess accounting to close the books.
Challenge 5: Static, siloed purchasing policies
The challenges of traditional purchasing policies are many. First off, the purchasing policy is often a lengthy file given to employees in a pile with other corporate policy documents, to be skimmed once and then never looked at again.
Workflows are buried under layers of bureaucracy, which makes it difficult for employees to move quickly. They may seek workarounds to bypass the system, and compliance suffers as a result.
In many cases, the rules are either too ambiguous for employees to follow, or too long and detailed for them to remember. Formal purchasing policies tend to cover areas like T&E, but may lack guidelines for other employee purchases, such as SaaS subscriptions.
Of businesses that do have a purchasing policy in place, 58% report that their team’s understanding of the policy is, at best, “decent—but in need of improvement.” And herein lies the issue: there is an over-reliance—or expectation—on employees to correctly remember the corporate policy and spend money accordingly. Instead, finance teams should enable systems that proactively stop employees from spending outside of policy in the first place.
Solving spend: Be proactive with distributed spend management
For too long, finance teams have taken a reactive approach to spend management, instead of treating it as something that they can proactively control. Reactive processes, with manual expense tracking and paper receipts, result in inefficiencies across the business. More significantly, perhaps, companies lose money when finance teams have to admonish employees who spend out of bounds after the fact, rather than ensuring adherence policy from the get-go.
Implementing a distributed spend management platform allows finance teams to gain total spend control and visibility into purchasing, without strangling company growth and culture. Employees are empowered to make the purchases they need to do their jobs, and finance can rest easy knowing that all of the transactions will adhere to company policy, be correctly coded, and sync to their accounting software in real time.
Intelligent software limits payments to the approved amount, whether on virtual credit cards, physical credit cards, or purchase orders. This ensures that employees don’t spend out-of-bounds or over budget. Unique card numbers for each purchase allow all employees to make purchases on their own—no more credit card frisbee.
Finance teams can enable proactive controls by coding their corporate purchasing policy into software. This guarantees that the appropriate approvals are obtained before any money is spent. And it does so automatically, without employees having to remember or reference a purchasing policy document.
Often overlooked, but equally important, is the user experience. Make the process easy and enjoyable for employees to follow by adopting a system that fits within their existing workflow. Eliminate unnecessary bureaucracy, so the workforce feels empowered to make purchases rather than slowed down by the process.
In a time when even consumer banks offer real-time spend visibility into customers’ habits, there’s no reason for finance teams to continue to wait days to see the spending that’s happening at their company. With upfront coding and automated reconciliation, finance teams can view correctly coded purchase data at any moment, which enables accurate reporting and forecasting.
By replacing outdated spend practice with distributed spend management software, finance teams can ensure that employees are able to buy what they need, when they need it, while maintaining total control over the process.
More ways to streamline spend
In combating these top challenges, you may find yourself noticing common mistakes, or wondering how your spend management process matches up to the industry standard. Let’s consider a few more ways to create an effective spend management process and boost overall operational efficiency.
Avoiding spend management mistakes
Even as you implement new processes or technologies, it’s possible to stumble into common pitfalls. It can be helpful to identify and avoid the following mistakes when evaluating your process:
- Lack of controls or vague control criteria
- Continued spending with employee personal cards
- Brushing off and failing to account for small expenses
- Inconsistent vendor management and communication
- Failing to regularly review vendors
- Complicated spend policy
- No budget control mechanisms
Develop a spend management strategy
Your strategy is critical, and it’s likely jeopardized by outdated technology or practices. However, even when you gain 100% transparency after modernizing your systems, strategy will continue to be an essential part of spend management success.
When developing a new spend management strategy, you’ll want to evaluate everything from procurement to payments. With access to spend data, you can identify things like:
- Over-reliance on a single vendor
- Redundant or unused tools
- Opportunities for discounts
- Areas for improved contract terms
Review key spend management trends for 2025
Another way to support your efforts in overcoming common spend management issues is to determine which industry trends will benefit your organization. For example, in 2025, we are seeing for finance professionals lean into:
- AI-driven procurement
- Finance automation
- Integrations
- Streamlined T&E reporting
Eliminate spend management outdated practices
Many challenges and mistakes are related to outdated practices, and have been covered extensively. In short, spend management practices that are considered outdated or legacy processes include:
- Paper-based invoice processing
- Traditional accounting (as opposed to continuous accounting)
- Manual expense reporting and approvals
- Reliance on paper receipts
- Siloed purchasing policies
- Dependence on personal credit cards, not having company cards, or making company cards too complex to use
Invest in best modern alternatives to outdated spend management practices
Many of the business spend management challenges discussed can be resolved or mitigated with technology. Spend management software like Teampay or similar ERP integrations can help enterprise companies replace legacy, outdated practices and improve financial control. Modern spend software that contribute to an efficient process include the following key features:
- Automated policy enforcement
- Intelligent corporate cards
- Rule-based, automated approvals
- Synced and automated AP reconciliation
Businesses can choose to outsource upgrades, but the process can be done in-house as well. You can determine the best software solution for your company through mapping out your entire spend management system, reviewing policies, and pinpointing areas that can be improved.
However, if you are seeking to depart from older, inefficient expense processes, it helps to consider the modern tech stack. Most software should be interconnected, which reduces labor, duplications, and other errors. Ensuring that your potential solution integrates with your ERP and other systems can make the transition easier and less expensive.
The future of spend management: Ditch the spend management challenges and drive growth
Teampay offers finance teams a robust spend management solution to avoid mistakes, overcome challenges, and drive savings. We offer a full procurement and AP automation solution that’s not just efficient—it’s easy to use.
Check out our proactive spend approvals for a glimpse at how simple the process can be.
