When you think about employee expenses, you tend to think of people getting reimbursed for flights, hotels, meals and other travel-related items (T&E spend). In reality, the amount of expenses submitted that are directly related to travel - such as hotels, flights, and car rentals - was only about a third of total employee spend even before Covid. While overall volumes of employee expenses have reached their pre-Covid levels, travel remains low, with only about 16% of employees’ expense receipts are travel-related.
So, what is this extra spend? Spend managed centrally i.e Invoice volumes weren’t impacted much by Covid ..Some of it is related to at home working, such as reimbursement of mobile and home internet bills. But much of it falls into a middle ground between personal expenses and traditional invoice-based spend, which has seen an increase of about 30 percent over the past two years. This could include cloud software subscriptions, Google or LinkedIn ad campaigns, filing fees for anything from legal cases to patents. They’re all typically done either on personal or corporate credit cards, and the soonest that finance knows about it is when a card bill comes in, or an expense report is filed.
The lack of visibility on these generally larger ticket items can cause several problems for the finance team. It’s far harder to see if there are areas of inefficient spending - are multiple people buying individual licenses for software when there is already a corporate account? It provides out-of-date information - an expense may be submitted several weeks after the spend is incurred. And most importantly, there is no way to proactively control the spend - once it’s done, the money is gone.
This is where our new solution, Emburse Spend comes in. Emburse Spend is a card management solution that makes purchases easier to make, track, and control. Instead of making purchases independently, users can request a card be created specifically for that transaction or purchase category. Budget holders are able to immediately issue virtual cards, which can then be used for the purchase by the requestor. These cards are all managed via a dashboard, and can be restricted by areas including spend amount, category, and date. Purchases are recorded in near-real-time, so budget owners can see who has spent how much, and on what.
This creates huge opportunities for spend optimization. Let’s take a marketing team as an example. If a GoogleAdwords campaign is working well but the budget is almost exhausted, funds can be shifted from a lower-performing activity, without the concern of exceeding the overall marketing budget. If several designers are looking to buy a subscription to Adobe Creative Cloud, would it make sense to look at a corporate license? These benefits are in addition to giving team leads the capability to control spend before it’s made, instead of having to question an expense a month or more after it’s taken place.
Not only does this deliver huge benefits to the finance team, but it also makes for a great employee experience. No need to incur spend on a personal card and then wait for it to be reimbursed. No need to request an invoice and go through the submission and approval process. Team members can make a purchase within minutes of submitting a request through the Emburse Spend dashboard, and then simply forward the receipt to Emburse Spend. Reconciliation is completely automated. And no back and forth with finance teams further saving time and helping your relationships.
In addition to the “soft” benefits of spend visibility and control, centralizing all of this spend on corporate cards also generate rebates, which can lead to many thousands of dollars of added value for the organization. The ability to close books earlier by automating transaction reconciliation and accounting processes can also reduce stress among the accounting team.
As increasing levels of business spend are falling into the unmanaged gap between T&E and invoiced purchases, department heads will be under more pressure to improve their visibility and control over budgets, to provide more timely insight and avoid overspending. Emburse Spend can eliminate those concerns at a stroke.
If you’d like to learn more about how Emburse Spend can help your organization, get in touch and schedule a demo today.