If you really know the music industry, you know that many tour managers and accountants are barely a half-step removed from the glory days of the abacus.
So many of them — along with their peers in other areas of show business — spend long hours counting paper receipts and going through a laborious, nearly ancient process of paying for, and recording, petty expenses. It’s not so much that they hold onto neo-Luddite philosophy, though some of them do. Rather, it’s that certain ingrained payment habits are simply hard to break.
The rise of freelance and on-demand labor — aka the gig economy — is threatening that analog, papercut-prone way of doing business. And that’s the main theme of a discussion that Toffer Grant, CEO of PEX, recently had with Karen Webster as part of the PYMNTS “CEO Conversation Series.”
PEX, founded by Grant in 2006, offers software-as-a-service workforce tools designed for businesses not typically served by enterprise SaaS spend management solutions. These companies include trades and other service businesses that require workers to buy supplies and spare parts while out on the job, as well as fuel for their vehicles. Increasingly, Grant told Webster, these solutions have evolved to meet the needs of the temporary, on-demand workforce that we now call gig workers, who may have the same ad hoc purchase requirements to complete their projects.
One such sector that exemplifies this need is the behind-the-scenes worker on concert tours and movie and TV productions. There may be no business like show business, Grant said, but there is also no business that has a bigger need to bring spend management into the 21st century for the local gig workers who support productions on the ground. Today, those expense management practices are defined by the two “Ps” for the worker – paper-based receipts and/or petty cash – and one big headache for the production manager tasked with matching expenses with receipts.
Indeed, if you have the odd motivation to follow around, say, the on-site manager of a TV production for a day, the odds are reasonably good that you will find, in Grant’s words, a person trying to make “sense of a pile of receipts or a bunch of chicken scratch on paper.”
Just securing the $20 needed for a pack of cigarettes vital to a particular actor or musician can involve a trip to the finance person for petty cash, followed by a bout of receipt-making — as Grant said he knows from his early days in TV production.
“These are not very highly paid jobs, so these workers don’t have a lot of disposable income,” Grant told Webster. “Having a corporately funded tool available takes a lot of risks and pain out of the mix for both the worker and the production management company.”
In a sense, trying to bring that payment process into the digital world represents a struggle for order, Grant said. “There is always a deadline, we are always running out of time, and that urgency creates chaos,” he told Webster.
In fact, certain forms of show business seem like the last place one would want any chaos when it comes to matters of payment and profit. “In the music festival business, you have three days to earn ‘X’ amount of revenue and meet your goals,” Grant said. When that headline band finishes its last encore, you can be sure the money people are still backstage settling the accounts.
Offering a central digital platform to handle receipts is not only about helping the backend production workers get home at an earlier hour — it’s about cutting down on analog mistakes that can threaten the proper accounting and collection of revenue.
The stakes are getting higher for moving further toward digital for work once considered untraditional. According to the new Gig Economy Index from PYMNTS, for instance, the gig economy has expanded well beyond rideshares and home repairs, and well beyond the occasional need for extra cash. In fact, the Index found, nearly 40 percent of the American workforce now makes at least 40 percent of their income via gig work.
That’s not all, according to Grant. The spread of sophisticated mobile and video technology has made it easier for more people to produce film, web and TV content, and companies such as Netflix and Amazon continue to aggressively create entertainment content. “This is more than just a narrow niche,” Grant said.
The people least capable of fronting money for expenses — not only temporary workers in show business, but also electricians, plumbers and other such workers — are the least capable of fronting the money for later reimbursement. That seems unlikely to change as the gig economy grows.