Sunlight is the Best Disinfectant for Your Company's FinancesBy Rebecca Morrison
Here are the top tools and techniques to help finance teams keep everyone in line
Here’s a common problem I’ve noticed while working in the finance departments of various tech companies over the last 15 years: budgets get rolled out across the company, but budget owners don’t have the ability to track and manage their spending in real time.
Without real-time visibility and tools to help employees manage spend, corporate budgets will continue to be little more than aspirational targets. And it will only get worse as your company grows.
So what can you do?
Old school expense management is keeping everyone in the dark
Even when budget owners keep close track of their spending via receipts, some expenses can’t be accounted for until after the books have been closed and expense reports have been created, leaving budget owners in the dark about their spending while there’s still time to change it. This opaqueness leads to frustration for both budget owners and the company’s finance department.
Budget owners are in an impossible situation. Because they can’t track their spending in real time, budget owners either overspend and get in trouble with the finance department, or significantly underspend due to the fear of overspending and feel frustrated that they “lost” this money. Rather than feeling empowered to use their budgets to benefit their teams, budget owners feel like they can’t use the money that was allotted to their department.
When budget owners overspend, the finance department has to use their time policing and reworking budgets, rather than focusing on new projects that could grow the company’s bottom line.
Shine a light on your company’s finances
The million dollar question is, how do you ensure that everyone at your company stays on budget? Achieve this goal by providing visibility through tools that let your company’s budget owners, finance team members, and employees see and manage their spending in real time, rather than weeks after the books have been closed.
Benefits of corporate financial visibility
Everyone at the company benefits when spending is transparent and visible in real time.
When the finance department can see spending as it happens they can help budget owners stay in control of their spending. The finance team can also create expense reports much faster when all spending is already accounted for as soon as the books have been closed. And, when budgets are tracked in real time, the finance team can help provide creative strategies to help budget owners limit overspend and get back in line.
With real-time visibility, budget owners can spend strategically and with confidence, rather than having to second guess every purchase they make. Visibility gives budget owners peace of mind that allows them to spend less time and energy worrying about spending, and instead dedicate more effort to the things that they were hired to do.
When employees understand their employer’s budget and expensing guidelines and can easily adhere to them through tools that increase spending visibility, they feel like valued members of the process, rather than just rule followers. When employees feel like they are part of the bigger picture, they are engaged at work, which ultimately leads to higher retention rates.
Reporting on finances in real time helps the entire company feel more involved in the financial state of the business. This transparency helps every team member shape their behavior based on outcomes, instead of on top-down financial controls. When the whole company is involved in the financial process, everyone can make decisions proactively rather than reactively.
Financial disinfectants: Tools of the trade
According to a survey by FEI, the number one priority for financial executives in 2019 is adopting new technologies.
Tech is making it easier than ever for finance teams to set spending limits, track spending in real time, and empower employees to spend within their budgets. Here are some tech tools your company can adopt to add visibility to its finances.
Managing overall spend: Brex and Divvy
Brex and Divvy are changing the conventions of corporate credit cards. Employees receive virtual credit cards via an app that also lets them track and manage their expenses in real time so that they can pace their spending. Account holders can also upload receipts via text or email, simplifying bookkeeping for the finance department.
Account administrators can set spending limits for each card holder. They can also see spending in real time, by department and by card holder. Brex’s and Divvy’s apps integrate with expense management software, expediting expense reporting at the end of the month.
Managing corporate travel spend: Lola.com
For companies that send their employees on the road, a tool like Lola.com can make corporate travel spending transparent and more consistent.
Finance executives can use these platforms to create a corporate travel policy that sets spending limits (or guidelines) for travelers. Real time reports reveal who has spent how much on travel. When the books close, Lola automates expense reports for your corporate travel spend.
Road warriors can book travel with peace of mind, knowing that what they see on the platform fits within their team’s budget. Travelers see all of their options, not just the cheapest flights and hotels, so that they can take advantage of loyalty programs they belong to.
Let the sunshine in
Traditional budgeting and spending methods are frustrating for finance departments, budget owners, and employees. Fortunately, tech is revolutionizing corporate expenditure by making real time spending data accessible to all.
These new tools reduce overspending, empower employees to make purchases confidently while staying on budget, and engage the entire company in the company’s financial wellbeing.
Financial visibility through real time spending tools like Brex, Divvy, and Lola.com are a win-win-win-win for budget owners, finance departments, employees, and companies.