By Ian Johnson, SVP Market Development at Soldo
Earlier this month, Rishi Sunak became the UK’s next prime minister after Penny Mordaunt dropped out of the Tory leadership race in the eleventh hour. Despite businesses seeing the former chancellor as a safer and more cautious pair of hands, the new Prime Minister has been greeted with numerous challenges in the early days of his role. The unprecedented rise in inflation to spiraling energy costs – both of which will need his immediate attention – is understandably making it harder for businesses to operate.
For many, they are having to find solutions themselves to simply keep the lights on or see some sort of growth. In any case, what will be essential is full visibility and control of spending across the entire business, in real-time. This is why it is worrying to find, in a recent survey we did into tech sector spending, that 43% of finance teams spend at least half a day a month processing company spending – that’s a lot of time that could be saved. Having a complete picture of spend will give them the confidence and flexibility needed to adapt to any situation – needed in the current climate of uncertainty.
Old school manual methods don’t cut it anymore
Many finance teams are held back by legacy technologies that don’t integrate with each other. This results in data being stuck in silos, so it’s hard to track down, make sense of, and even harder to verify whether it’s accurate and up to date. What’s more, legacy data often means manual processing which is time-consuming and pulls finance teams away from strategic work.
It may not come as a surprise to learn that, according to our recent survey, two-thirds (64%) of finance teams do not use a spend management platform, while a third state they make purchases on behalf of their company every week – that’s a lot of spend that has to be entered manually. Without real-time visibility of spend, finance leaders are in the dark as to how much money is leaving the business at any one point – rather they have to wait until the end of the month to tally up all expenses, for example. This is a dangerous situation for any business looking to keep tabs on its purse strings.
Digitising spend: the key to gaining visibility and saving costs
The research found over a third (38%) of businesses with over 1000 employees said their department spend is between £1,000 – £10,000 per month, with 26% relying on petty cash to make purchases. Without some form of automation in place, tracking this large amount of spend involves a lot of manual input and paperwork, including spreadsheets, paper receipts, reams of bank statements, and reimbursement forms.
Shockingly, our research found that a third (32%) of workers are paying for goods and services with their own money and rely on reimbursements from their companies. Lengthy expense processes are an extra pressure in an already difficult time financially for people in the UK, which can even dissuade employees from fully claiming and expensing receipts. With numerous challenges facing employees from the rising cost of living, businesses should look to stop out-of-pocket expense payments and make sure they’re not adding to an employee’s financial pressures. With the right spend management software, you can make light work of these tasks. By using technology, companies can save time on expense processing, so employees aren’t left having to pay out of their own pockets.
Supercharging employees with automation
Finance teams should aim to work with automation rather than compete against it. When businesses get the right mix of human and automated work, processes are more efficient, and individuals are freed up to focus on more useful tasks like data analysis or forecasting.
The data they are using also becomes more accurate and more reliable when there’s no chance of manual data entry errors. This means more precise predictions. And because the data is richer, decision-making is better too. Processing spend manually is extra pressure in an already difficult time, so automatically tracking and uploading purchases made on company cards with spend management tools removes this burden from both employees and finance teams.
With prices continuing to rise, pay rates plateauing, and a recession looming, business leaders must find ways to take control of spending and support employees regarding payments like expenses. Automation is a key step towards this, for finance leaders to effectively manage, plan, or forecast. And when the good times return, they will be in an even stronger position to enjoy sustainable growth.