Today’s spend management tools eliminate the headache of expense reports and chasing credit card transactions by offering real-time visibility into spending.
Tracking and predicting spending has become increasingly complex for nonprofits and small businesses, especially with the rise of remote work, international travel, growing supplier networks, and out-of-date processes. Economic uncertainty and tight budgets are driving executives to seek greater visibility and control.
According to a survey by CPA.com, the business and technology arm of the AICPA, 72% of small and medium-sized businesses seek a forward-looking approach to expense management, and 41% that outsource the function have seen meaningful time and cost savings.
Manual expense reports and bundling receipts after credit card statements close often delay reimbursements, create errors, and limit oversight. That is why organizations are automating the process with smarter spend management tools.
Modern spend management platforms include tools like virtual credit cards, which provide organizations with greater control and real-time insights into spending. More than half of those that use virtual credit cards describe them as “game-changing” for their organizations, replacing the frustration chasing down credit card receipts and policing overspending with simple yet advanced solutions.
Rather than treating expense management as an obligatory struggle, it may be helpful to take a wider view. Spend management, which extends beyond expense tracking, creates a more proactive approach.
Expense Management Versus Spend Management
Is your expense management system causing more problems than it solves? Consider the difference between looking back (expense management) and looking ahead (spend management).
Expense Management — When multiple team members share a corporate card, or staff seek reimbursement for out-of-pocket expenses, purchases are reviewed and recorded after the money is already spent, typically about 30 days later.
Staff must complete reports, gather receipts and meet deadlines, making the process stressful and time-consuming for everyone involved. Physical corporate cards and personal debit cards can also be lost, stolen or skimmed.
The ability to make quick cash flow decisions is a challenge using traditional expense management processes because information lags behind.
Spend Management — Spend management integrates a financial operations platform with virtual corporate cards – digital versions of a physical card – which are issued to employees with pre-set spending limits. Employees can request additional funds, if needed, adding a layer of control to the process. If approved, the card can be funded immediately.
A virtual card is connected to the company’s budgets and expenses are pre-coded, reducing administrative work.
As soon as a purchase is made, the employee is prompted to upload support or take a photo of the receipt, providing the necessary documentation right away. The process is convenient for the employees too, as the money comes from the company, not their pockets.
The cards are linked to a financial operations platform that pulls in all transactions in real time, so tracking is done on the spot, spending patterns are visible, and cash flows are much easier to forecast. Purchases also earn rewards that can be redeemed for cash back, gift cards, and travel benefits, similar to other credit card programs.
From Reactive to Proactive
While expense management focuses on controlling and reimbursing expenditures, spend management allows a more strategic approach to financial planning.
By adopting spend management tools, your organization can take control of all aspects of company-wide spending (in one centralized location), speed up processes and improve overall financial performance by gaining a clearer, more comprehensive view of where and how money is spent.
Simplify Spend Management – Starting Today!
Choosing the right financial management practices can seem daunting. No matter the size of your business or nonprofit, CBM’s accounting and advisory experts are here to help you take charge of strategic financial planning.
Solving clunky expense management challenges is just one of our specialties. We offer a comprehensive suite of services – from CFO-level oversight, forecasting and analysis to essential functions like bill pay, financial reporting and account reconciliations.
Make the shift from outdated processes to smarter spend management— saving time, money, and effort where it matters most. We’re ready to help you when you are!
Please contact Dominick V. Bellia via our online contact form for more information.
Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region.
