Finance Industry

5 must-haves for the next generation of finance

In a digital-first world where automation rules and companies rely on real-time data to make decisions, finance teams can feel left behind. They’re still stuck in a bygone era, chasing down expense reports, working with outdated and inaccurate numbers, and spending more time on manual tasks than big picture strategy.

It’s time for a change. In the next generation of finance, finance teams will replace their outdated processes with a more proactive and innovative approach. 

Teampay’s own finance team sat down to discuss  the future of their profession. During a virtual panel last month, Andres Rivero (Strategic Finance Associate), Robyn Wertman (Controller), Natalie Toh (Finance Analyst), and Katie Harris (Product Marketing Manager) shared actionable insights and fresh takes on finance for the future.

Below, you’ll find important takeaways on how to usher in the next generation of finance.

1. Trust employees to make spending decisions

Our Beyond the Balance Sheet report reveals that at least 42% of employees make purchases in a single year. However, Harris explains that “finance teams have long been reluctant to give up control and let employees make spending decisions.” Our panelists believe finance professionals should do just that.

Your employees know better than anyone else what they need to be successful in their jobs. If you want your workforce operating at maximum productivity, trust them to make their own spending decisions. “If you’re trying to control what employees are spending, you’re trying to control what they’re using to do their job,” says Wertman. “But when you implement tools that allow employees to make their own purchases, they can make decisions that are right for them.”

“I don’t think employees inherently want to make bad purchasing decisions. At the end of the day, they’re all just trying to get what they need to do their jobs.” — Katie Harris

It’s important to remember that decentralized spending doesn’t equal uncontrolled spending. In other words, you can empower employees to make decisions without compromising the financial health of the company. “It can be as simple as implementing a budgeting tool for each team to ensure departments aren’t spending more than their means,” says Toh. “I think this tool should also give finance full visibility so that they can see the transactions happening in real time and catch any that fall through the cracks or end up being out of policy.”

2. Adopt tools that prevent accidental overspending

The idea of trusting employees to make their own spending decisions might seem daunting to finance professionals, who often see employees making out-of-policy purchases. In fact, our report reveals that 78% of financial professionals believe that employees are completely unaware of company spend policy. And two out of three say that employees are more likely to not follow the policy than to follow it. According to our panelists, the secret to preventing out-of-policy spending is to adopt the right tools to provide more visibility for both the finance team and employees.

“If you don’t have one dedicated platform or dedicated place where purchasing is taking place, then it’s very difficult to actually track,” says Rivero. Finance teams end up asking about purchases “during informal conversations, and that’s not a systematic or proper way of doing it. But as long as you have one place where you can do it, where you are transparent and employees know where to go, that’s the most important thing.”

Toh doubles down on this idea. “I don’t think these employees are intentionally spending outside of policy,” she says. “It’s accidental. It’s easy to overlook a small rule, especially when you’re not making the same purchases every day. I think what’s important is having the tools in place… to prevent out-of-policy spending.” 

Tools that work to stop out-of-policy spend before it happens are not only beneficial financially — they also save finance teams from having awkward and frustrating conversations when employees overspend.

3. Have a clear, easily accessible purchase policy

Along with the adoption of the right tools, Teampay’s panel also highlights the importance of having a clear and accessible spending policy. Don’t bury your company’s spending policy in the employee handbook people receive when they’re onboarded and then never look at again. Employees can’t comply with what they don’t know. 

“You can’t really assume that everyone has read and internalized [the spending policy], even if you feel like it’s clearly spelled out.” — Katie Harris

“I think a lot of policies are written in a way that isn’t clear, and it’s hard to remember them. It’s hard to locate them,” says Wertman. Harris agrees with this sentiment, reminding us that even though finance professionals share spending policies, it doesn’t mean that all employees have read and internalized them.

“Let’s say you sent the policy out on March 1st, and now it’s August. And I’m trying to make my first-ever purchase at the company,” says Harris. “I feel like there were rules, but I don’t really know where they are. So, I’m just gonna ask my boss for her card so I can carry on and get what I need. Because, sometimes, if you don’t have the information at the moment, it’s really hard to go find it.”

Make sure your policy is readily available through an internal knowledge base or pinned to a Slack channel so everyone knows exactly where to find it at all times.

4. Leverage hard data to convince the C-suite to implement new technology

The technology to improve broken processes is available — the challenge is convincing key decision-makers it’s time to implement that change. Toh acknowledges that sometimes when it comes to the C-Suite, old habits die hard. Legacy employees tend to be key decision-makers, and they’re used to processes they’ve been using for decades. She points to the example of remote work as a way to show the benefits of something that might seem risky until you try it. “Ten or twenty years ago, we wouldn’t have thought remote work was possible. But with the right tools and technology, it’s possible to change processes.”

To convince the decision-makers at your company,lead with an argument for productivity. Teampay’s data shows that finance professionals are spending up to 30 hours per month on expense reports alone. Chasing down receipts and hounding employees for information isn’t just frustrating for finance teams; it’s also a waste of time. “Every hour that you spend chasing receipts is an hour that you could have spent on strategic planning and actually driving the company forward,” says Rivero. 

“Every single department, every single company is always looking for ways to be more efficient. A finance team is no different.” — Andres Rivero

Wertman also pinpoints accuracy in reporting and the importance it holds for CFOs. If finance teams rely on outdated processes — trusting employees to submit expense reports on time — that accuracy is lost. “I’ve worked at past companies where we relied on the employee submitting their report. Nothing is more frustrating than to realize travel went up to $5k in a month when nobody was traveling that month. And it’s because someone submitted their expense report two months late. But if they have a company card or a virtual card to make purchases, those transactions are hitting live, and they’re hitting during the right accounting period.”

5. Ensure employee reimbursements are an exception, not a rule

Companies shouldn’t be using their employees as personal credit lines. Yet, asking employees to front money is still extremely common, with companies paying an average of $32,000 a month in reimbursements. Our panelists believe the next generation of finance should leave this practice in the past. Not only do employee reimbursements pose extra work for finance teams, they also create a highly undesirable employee experience.

“It’s all about putting yourself in the shoes of the employees,” says Rivero. 

“At a previous job, my very first week, I had to travel. And it was not very encouraging when they said, ‘we need you in Brazil by the first of September, and we’ll reimburse you in two months.’ So that aspect is something you need to try to mitigate as much as possible, especially if you want to keep your employees happy and make it easier for everyone.” — Andres Rivero

In the age of the Great Resignation, companies need to consider how their purchasing process impacts employee retention. “Right now, I think employee experience is every team’s job,” Harris points out. “Every time you’re asked to [front your own money], you’re gonna be more and more irritated at your company. And that could fuel employee churn.”

Join the next generation of finance with Teampay

Automated, efficient, and productive — this is what the next generation of finance looks like. Move your company finance forward with an all-in-one purchasing solution that enables companies to request, approve, and track expenditures in real time. To learn more, watch Teampay’s Next Generation Finance virtual panel on-demand now.