How to get better spend visibility and what to do with it

Getting access to clear, real-time spending data can unlock loads of benefits for organizations like yours. From pinpointing financial inefficiencies and optimizing spending to making informed decisions and improving profitability, transparent spending data can make a massive difference to your business’s financial strategy.

But while expense visibility is vital for tracking, managing, and reporting on spending, it’s not always easy — especially if you use multiple disconnected solutions and try to connect the dots.

A recent IFP Spend Management Pulse Report highlights the challenges many organizations face, and this article addresses some of the biggest.

Over a quarter of companies lack real-time visibility into data

Alongside other challenges, including human error, time wasted on reconciliation, and ineffective software, 28% of medium-sized companies need help with real-time spending visibility and data.

And despite 51% stating their overall spend management practices were ‘very good’, 24% say they’re incredibly concerned about corporate spending.

To deliver an impactful and effective spend management strategy, you must master the delicate balance between empowering employee spending to support agility and growth while reducing overspend and out-of-policy spending.

Only 28% of employees are empowered to spend

When questioned about spend control and empowerment, 50% of financial leaders shared that all spending must be pre-approved.

For many CFOs and financial leaders, the obvious solution is pre-approving all spending with processes like Purchase Orders (PO). PO systems can greatly benefit bigger spending but aren’t always the best fit for smaller on-the-go expenses.

But the ideal scenario would be to leverage a solution with PO, reimbursements, and corporate cards (with built-in controls) all in one. By using a comprehensive solution which covers all of these processes, you can ensure that all your bases are covered; larger spending creates no risk, and smaller or project spending can stay agile.

You can better empower employees, too, with corporate cards that feature limits, controls, and automated approvals, letting your employees spend without constantly having to re-read policies.

43% of companies want to improve spend visibility

Want to reduce concerns about overspending? You need real-time visibility into your spending data. And many other finance teams agree: 43% (small business and 35% (large business) of financial leaders say they prioritize improving spend visibility in their organizations.

How do these companies plan to improve spending visibility? In a nutshell, by investing in spend management initiatives. 22% of companies plan to invest between $500,000 and $1M to improve their spend management processes with tools and other initiatives.

Financial leaders are seeing the importance of using the most effective tools for spend management, but how do they know which to choose?

Simply put, the right spend management solutions should give organizations real-time visibility across company-wide expenses or multi-entity management spending data, streamline all financial processes to save hours and even days (from receipt data capture to real-time reconciliation), and help capture spend in a way that makes accounting data flow seamlessly into a chosen ERP or accounting software.

How to achieve unrivaled spend visibility

Spend visibility is paramount; it’s the root of all business decisions. Without this visibility, you can’t plan, forecast or grow your business.

Inefficiencies in spend management will cause delays in approvals, a decrease in employee productivity, and can increase errors throughout the spend management process. Leaving you open to fraudulent expense claims, incorrect tax information, overspending, and more.

"We rely on the customizable class settings within Payhawk to distinguish between venues to analyze performance. Whether it's categorizing between venues or categorizing it into the right general ledger code, it's extremely helpful in terms of how we allocate spend," says Andrew Jacobi, VP of US Finance at State of Play Hospitality.

"At the end of the period, we look at two things. First, were we able to forecast our spend properly? For this, we put Payhawk directly in the hands of our venue managers so they can report on what they're spending money on. This approach means they can track spend against their budget and ensure they're meeting it across each general ledger category. Then, at the end of the period, we look at variance to budget — seeing whether a spend category exceeded or came in under budget. Payhawk allows us to spot if there's overspending in specific places up and down our P&L very quickly. For example, if we see that we're spending too much or more than expected on DJs in a particular venue." Andrew continues.

At Payhawk, our comprehensive spend management tool keeps you in complete control over spending across all your entities without compromising user experience or creating inefficiencies.

Card management and reconciliation

Card linking and real-time card feeds transform expense management by providing real-time visibility into corporate credit card spending and enabling automatic, real-time transaction notifications on existing credit cards. When employees use their linked credit cards for purchases, each transaction is automatically recorded and spenders are notified to submit a receipt. This eliminates the need for employees to keep physical receipts or manually submit expense reports. The transaction details are immediately available, enabling on-the-spot submission and categorization of expenses.

This seamless integration not only speeds up the reconciliation process but also ensures accuracy by reducing the potential for manual entry errors. Combined with our OCR technology, this real-time data capture and synchronization with native ERP systems facilitate a comprehensive and automated approach to credit card reconciliation.

Smart receipt data capture

Our Optical Character Recognition (OCR) technology means employees take a picture of their receipt from within the Payhawk app, and necessary receipt or invoice data is instantly extracted and categorized as a receipt or invoice so it can be correctly processed by accounting.

Automating this part of the process reduces errors and reduces employee time spent manually copying data, and once uploaded, the receipt data is automatically reconciled against bank account transactions.

Real-time visibility and integrations

Making short-term and long-term financial decisions requires real-time insight into spending. And with our intelligent expense management software and direct integrations, you have the insights at your fingertips. Integration with your ERP or accounting systems means your data is updated instantly; everyone works from the same data, and there’s no room for miscommunication.

Multi-entity management

Payhawk's Group Dashboard streamlines multi-entity management, offering a centralized view of expenses, including bank transactions, reimbursements, invoices, and subscriptions. Using the dashboard, you can easily identify top spenders by team and entity and get a clear picture of cash flow across entities and currencies. Plus, low-balance alerts let you take quick action before you get into any sticky situations.

Spending controls and corporate cards for employees

By issuing employees their own Payhawk corporate cards, you make expensing accountable. You can set card limits and create spend policies to keep track of spending, reducing overspending, all while giving employees the freedom to spend within a framework.

Spending controls are controlled from a centralized dashboard, so if there are any worries about card activity, cards can be frozen within the app in seconds.

Leon Steenbrink, CFO at procurement marketplace Mercell Nederland, says: “My favorite [Payhawk] feature is having the ability to assign spend policies to employees. I like it because it empowers employees to perform their job function without asking for permission to spend money that they have already budgeted.”

Custom approval workflows and expense approval filters

Set your own custom workflows for certain spend types or spend requests and bring approval chains in line with company spending policies — no matter how complex they are. This gives you better control and flexibility over your spending processes, ensuring all company spending is within policy and keeping unnecessary or duplicate costs to a minimum.

Our expense approval filters mean you can filter expenses by status (approved, pending, etc.), giving finance managers increased visibility over expenses helping better manage cash flow and adhere to budgets.

Subscription management

Twenty-nine percent of business spending is on invoices, which means if there were duplicate or dormant subscriptions you were wasting your money on, you need to know about them. With our subscription spend management, you can uncover hidden costs quickly and efficiently.

Assess monthly subscription fluctuations and instantly pinpoint problem areas to act fast and reduce overspend.

Your next steps

Learn more about the spend management challenges facing finance professionals like you, including spending controls and visibility, by downloading the Payhawk Spend Management report. Or, if you’d like to see Payhawk’s spend controls in action, book a demo today.