It is an exciting time for growing companies. Technology innovations of the past decade have completely transformed the way that people do business, increasing efficiency, maximizing productivity, and streamlining processes like never before.
But within the general wave of progress, some areas of business have been left behind. Technology has streamlined some processes and left others in the dust, leaving teams with archaic tools to manage the challenges of the digital era.
Spend management is a prime example. While technology has evolved the way that companies spend money, little has been done to change how companies manage that spend. Here are just three of the many innovations that have pushed business purchasing forward—and the challenges that finance teams using outdated tools face as a result.
Once upon a time, companies only hired people who could commute into the office every day. Collaboration was only possible if individuals were in the same physical space and could communicate face to face.
This is no longer the case. Collaboration software like Slack and Microsoft Teams, as well as video conferencing platforms like Zoom and Google Meet, have facilitated long distance collaboration between individuals in different locations across the globe.
This opens up the talent pool, so companies can hire the best people no matter where they are located. This includes full- and part-time employees, as well as contract workers.
As a result, teams are becoming increasingly distributed—and thus, so is business purchasing. The different locations of your workforce, combined with increasing employee autonomy, means that workers across departments and geographies are spending company money rather than a central purchasing department.
Digital payments and e-commerce
While e-commerce tends to get discussed primarily as a consumer-focused innovation, it’s had a major impact on office life as well. Over one million businesses use Amazon Business to shop for everything from office supplies to food and beverages.
With the launch of Amazon Business in 2015, Amazon brought the convenience and cost savings of e-commerce to the office.
The introduction of digital payments and e-commerce has played a crucial role in the democratization of spending decisions at the office. Now anyone at a company can buy their own tools or book their own travel and hotel accommodations, using a corporate credit card or personal credit card with reimbursement request.
When purchases can be made with the click of a button, it is not uncommon for employees to spend company money without first obtaining the proper approvals to do so. This is especially true given the fast pace at which business is conducted. Spending decisions are often made in real time, and when the technology exists to accommodate this purchasing behavior, rogue spending can become a major problem.
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Largely facilitated by technological apps and websites, on-demand services are easier to purchase than ever before. Companies today are taking full advantage of the convenience of the on-demand economy, with much of the spending happening in three main areas:
- Food & transportation. From Uber rides at work events to ordering DoorDash for a late-night work session, teams are taking advantage of many of the same creature comforts at the office that they do at home.
- IT & web hosting. With the advent of cloud computing, IT costs have shifted from hardware bought in advance to server space purchased on demand.
- Professional services. Vendors like Upwork and Fiverr have made it easier to hire on-demand talent in everything from video production to design to legal consulting.
A growing network of on-demand services exists to serve businesses needs from legal to sales and marketing to customer support. (Source: CloudFactory)
On-demand services bring all kinds of advantages for businesses, making it easier to stay flexible and scale teams affordably as they grow. But these services have fundamentally changed the categories of possible business purchases. That means a new type of spend to account for, and one that is scattershot in nature.
Today’s businesses purchasing isn’t what it used to be—and that’s a good thing! Technology now allows employees to buy exactly what they need as they need it to do their jobs successfully.
But these technologies are only as good as the policies and processes that companies have in place to manage employee spending. Without proactive controls in place, real-time purchasing can become a huge headache for finance teams.
Companies need spend management tools designed for how teams work today. This includes:
- Intelligent payments that limit a card’s budget to the approved amount
- Proactive controls that code your purchasing policy into the software to ensure compliance
- Automated reconciliation that eliminates tedious manual labor and allows real-time visibility into spend
- Scalable systems that can grow with the company and its purchasing needs
The past few decades have seen evolutions in technology that finance teams of earlier eras could only dream of. It will be exciting to see what the next few decades of financial innovation will bring.
Teampay solves for the above challenges and more. Book a demo today!