The workforce is growing increasingly diverse, comprising a mix of remote employees, freelancers, and in-house workers. In many cases, their survival depends on it. But with distributed talent comes spend management challenges, especially for companies with a centralized purchasing department.
As Gabrielle Picard, Accounting Manager at Toast, said at the Agile Finance Summit, “To enable remote and flexible work, we needed systems that allow for sources of truth in areas with a decentralized employee base. This ensures that we’re putting out timely and accurate financials without everyone being in the office or working the same hours.”
By updating finance processes to reflect the changing workforce, businesses will increase their agility and be better positioned to meet the demands of the current market.
Centralized purchasing doesn’t support distributed teams
Centralized purchasing was built around the idea that full-time, in-office employees were the norm. Nowadays, remote and freelance workers are the rule, not the exception. Remote work has grown 91% in the past decade. Recently, after the pandemic forced entire companies to embrace this model, 74% of CFOs said they plan to shift at least 5% of former onsite employees to permanently remote positions post-COVID-19.
Employees are spread out across different geographies, time zones, and working hours. They operate from different departments in different levels of the organization. And yet, they are all bound by their work on behalf of the same company—and their need to make business purchases in order to do that work as efficiently as possible.
In order for the distributed spending model to increase finance agility, companies must enable systems to manage this new way of purchasing. Instead of routing purchases through a centralized department, all employees are given smart, policy-driven access to company funds. This bottom-up approach to spending empowers all employees to spend confidently and compliantly, wherever they are.
The rise of B2B ecommerce
As talent becomes more distributed and technology becomes more developed, employee buying behaviors are both changing and increasing. A 2019 report found that 75% of B2B product purchases were made online. With the recent shift to remote work, that number has only grown.
Traditional models that rely on shared corporate credit cards no longer work in a virtual environment. Remote employees are not able to pass these physical cards around, nor are freelancers who may work shorter hours, sometimes outside of the typical 9-5, than their full-time counterparts.
A common alternative, having employees use personal cards for business expenses and then submit for reimbursement after-the-fact, leaves many workers feeling like the company piggy bank. This reactive approach means Finance often has to issue reimbursements retroactively for purchases they didn’t even know had been made.
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Control spend without sacrificing speed
Leveraging virtual cards and cloud-based purchasing workflows enables freelancers, remote workers, and full-time employees alike to access company money from anywhere. Requiring pre-approvals and setting spend limits ensures that all purchases are made inside policy and budget.
Embedding the request process into employees’ existing workflows makes it easier for employees to comply and increase the speed at which they are able to make a necessary purchase. This is especially beneficial for remote and freelance employees working limited hours across various time zones.
When finance teams have proactive oversight into spending, they can ensure that money is spent appropriately before it leaves the company bank account. This allows all employees to leverage their autonomy in a controlled way that doesn’t slow them down.
Know what’s happening, as it’s happening
According to a PYMNTS survey, more than 60% of CFOs say they don’t have total visibility into company spend. Maintaining visibility is challenging enough when all employees are in the same physical space; it’s even more difficult when remote and freelance workers enter the mix.
Instead of waiting to receive monthly expense reports and credit card statements to understand company spend, adopt cloud-based software with automated reconciliation to see purchasing as it happens. This allows Finance to investigate out-of-bounds purchases as soon as they happen, develop better budgets and forecasts, and ramp spending up or down as needed.
The right spend management software also creates a dashboard with key metrics on company spend. Armed with real-time data on cost drivers and approval patterns, the finance team can provide more accurate reports and make better, smarter financial decisions.
Improve business agility
Full-time staff, remote employees, and freelance workers are all vital to a company’s operations, so it is important to make sure that the company purchasing process works equally well for all of them. This allows for truly agile finance even with a distributed workforce.