It is well understood that finance professionals spend a great deal of time on numerical tasks. Less apparent is the frequent communication that finance teams have with the rest of the business. And while some of this is strategic—like using financials to tell the company story to investors or sharing financial plans for the future—some is extremely frustrating, especially when it comes to employee spending.
Finance is tasked with enforcing the corporate purchasing policy, which often requires conversations with employees about submitting expense reports on time, attaching receipts, or why certain purchases fall outside of policy. These are awkward, frustrating, and all too common.
1. The “That purchase isn’t in policy” conversation
Policy compliance is a major headache for most organizations. 58% of companies with a purchasing policy in place said their employees’ understanding of the company’s policy is “decent but in need of improvement” and 20% say comprehension is “minimal.”
That means finance professionals are spending a lot of time reminding employees about policy or reprimanding them for out-of-bounds purchases that have already been made. This is frustrating for finance teams who have to explain yet again why a particular purchase wasn’t approved and for employees who don’t want to take time out of their day to find and read through the company purchasing policy.
Fortunately, with proactive policy controls, conversations about what is and is not within policy can be a thing of the past. Embedding the corporate policy into software allows finance teams to guarantee that purchase requests are routed correctly, which ensures that the appropriate approvals are obtained before any money is spent. And intelligent software limits purchases to the pre-approved amount, so employees can’t spend out of budget.
These controls proactively guarantee compliance with policy, rather than placing a burden on employees to reference siloed policies before making a purchase or finance teams to retroactively admonish individuals who spend out of bounds.
2. The “Do you have the receipt for that?” conversation
Asking employees, “Do you have the receipt?” is as much a part of an accountant’s day as eating lunch. Lost or missing receipts are a huge headache for finance teams, with 53% reporting that their single biggest pain point is “employees losing paper receipts/submitting without receipts.”
Every missing receipt is a lost data point. Finance teams have to choose between spending time chasing down employees for receipts or conducting best-guess accounting to close the books with incomplete information. Often, they end up doing both.
Imagine if you never had to ask employees for receipts again. With purchasing workflow automation, you don’t. After a transaction occurs, employees are automatically prompted to upload their receipt and submit it directly. And the finance team won’t have to remind them; the software will.
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3. The “Can you explain this purchase?” conversation
Most accountants have had the experience of closing the books at the end of the month, going through the credit statements, reviewing each purchase one by one, and realizing something doesn’t quite add up. An unfamiliar vendor name here, a weird dollar amount there.
In most cases, finance only becomes aware of these transactions at the end of the month, weeks after they actually took place. By this time, employees may have forgotten the rationale for the purchase, and there is little that can be done after the fact even if they do remember.
By coding purchases upfront instead of after the fact, transactions are explained and categorized during the initial request, and that data is automatically passed through to your general ledger in your accounting software. This means finance teams will no longer have to hunt down employees to figure out why purchases were made. They can rest easy knowing that, since every transaction was pre-approved, the rationale was validated.
4. The “Does anybody know who bought this?” conversation
Chances are you’re familiar with credit card frisbee, even if you’ve never heard the term before. In offices that still rely on a handful of corporate credit cards to make purchases for an entire workforce, those cards are often passed back and forth between employees and used by multiple different individuals. By the time month-end close comes around, it is often very difficult to figure out who bought what. Sometimes even the principal cardholder doesn’t know what their card has been used for.
This lack of a clear trail is especially frustrating because it often involves multiple conversations with different employees just to figure out who the right person is, after which another conversation is often necessary. This kind of detective work takes time away from other strategic tasks and is an unnecessary waste of time.
Distributed spend management software is built for all employees to use. Everyone has the ability to request company money within their existing workflow. This makes shared corporate cards a thing of the past. With the right controls in place, finance can empower all employees to spend company money—knowing that those purchases are being governed by a rules engine they customized and tied back to an individual employee.
Talk less about overhead and more about growth
Finance teams are at their best when they’re working strategically, using their unique ability to translate numbers into action to help chart the company’s path forward. But most finance departments spend less time than they’d like on those big-picture strategic activities—and more than they’d like on back-and-forth about expense reports.
With distributed spend management software, that’s finally starting to change. Pre-approvals guarantee control, and upfront coding allows employees to categorize transactions before they happen, so finance knows exactly who is spending what and why. All together, this eliminates the need for expense reports.
Technology makes it possible for finance teams to have complete visibility into spend happening across the company—from purchase requests to transactions—at the click of a button. This means less back-and forth, no chasing down employees for information, and fewer awkward conversations, so finance teams can focus on more strategic work that moves the company forward.