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Work-from-Home Trend Pressures SMBs To Improve ‘Out Of Control’ Spend Management

In the best of times, managing corporate spending is challenging, complex work. But amid the great digital shift, with a surge in employees working-from-home — whether they’re C-suite or sales reps — the task can seem Herculean.

“Sometimes it’s out of control — managing spend can feel like trying to hold water with your hands, and water, naturally, just wants to go through your fingers,” Aneal Vallurupalli, the chief financial officer of Airbase, told PYMNTS.

CFOs and their teams, he said, have had to adjust to remote work — which means conducting spend management from far-flung locations. The pressure is on, especially, for small to mid-sized companies to make the transition.

As Vallurupalli told PYMNTS, the shift to remote work has forced smaller firms to take “a deeper look” at the systems that are in place — and find out where the pain points lie.

Many processes and systems have traditionally been manual in nature — and thus have been time-consuming. But companies made it all work — because as workers were in close vicinity in an office setting, the tasks could be done relatively quickly, even if the infrastructure was not necessarily aligned.

In the remote environment, Vallurupalli noted, it’s all a bit different.

Bringing the Systems Together

“SMBs have had to learn, essentially, how to ‘pipe’ our systems together — whether it’s across AP/AR functions or finance/non-finance activities,” he said. As a result, finance teams and broader business operations teams are pivoting toward a closer examination of how they can enable remote work and make remote workers more productive. That scrutiny paves the way for SMBs to leverage tech-driven offerings such as online platforms and virtual cards (including those on offer from Airbase) to tackle expenses.

See also: Collaborations and New Card Rollouts Target Payroll, Business Travel  

“We do see a great impact there within the non-payroll side, where customers have our software, and with our spend management platforms, they are able to put more on cards with vendors,” said Vallurupalli. SMBs are also able to set up uniquely identified cards for each vendor. And more generally, he said the ability to have real-time visibility into spend allows company to gauge themselves against various benchmarks, such as how they’re spending against their CRM count.

Vallurupalli detailed to PYMNTS that Airbase’s spend management platform has approval matrices built-in, which in turn helps companies make faster decisions surrounding spend management.

The urgency is there, of course, to do more — and with speed. As PYMNTS research has shown, roughly half of more than 2,400 SMBs surveyed have opted not to pay vendors or other monthly bills when cash flow crunches hit hard. As many as 67 percent of respondents said they had relied on personal financial assets to cover cash flow gaps.

See also: Half of SMBs Manage Cash Flow Crunch by Not Paying Rent or Vendors 

Vallurupalli maintained that spend management platforms, with functionality that lets them combine expense management with invoicing, can help close that cash-flow gap.

With combined AP and invoicing, SMBs are dealing with vendors externally and paying them on time. With expense reimbursement, firms can pay employees on time for money that they were spending on the company’s behalf.

Looking ahead, said Vallurupalli, the digital transformation of SMBs’ finance functions will connect ERPs to data warehouses — because those warehouses have product-level and CRM-level information that eventually will be needed for invoices sent to customers.

“These tools de-risk your execution as a finance team, and make sure they spend company funds diligently and wisely,” he told PYMNTS.

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