B2B Payments

Cash Management, Compliance Intersect For Mid-Market Expense Management


Middle-market businesses are in a tight spot: They are still facing intense cash flow pressure to remain successful, yet have grown enough to take on new burdens of a larger organization. When it comes to expense management, that means mid-sized firms need the insight into corporate spend, both for budgeting purposes and for legal and compliance purposes.

The best way to help a mid-market company achieve that dual-sided demand, said Abacus CEO Omar Qari, is to arm these businesses with real-time data visibility.

For Abacus, that means integration with existing ERP and back-office platforms — the most recent of which to collaborate with Abacus is Intacct — so that data from employee expenses can be gathered as those expenses incur.

“If you look at the mid-market, companies are working more closely together, and I think it’s reinforcing this trend around real-time expenses,” Qari recently told PYMNTS. “Finance teams can step beyond entering data into the system and get to a point where they can start using this data to gain more meaningful insights. And those insights are most powerful when you can get it to them in real time.”

Executives no longer have to wait until the end of the month, or when an entire expense report is filed after an employee travels, to assess how corporate spend is aligned with budgeting goals or to assess profitability and financial positions amid new projects or marketing campaigns, for instance.

On a compliance level, Qari explained, integrating expense data in real time enables accurate and up-to-date information, allowing managers to check those transactions against corporate expense policies and to route those individual transactions to the appropriate personnel for approval.

There is another component to how mid-market companies approach their expense management solutions, however, and that’s to ensure that employees can use a system correctly and easily. Electronic payments, Qari noted, have supported that ease-of-use component, especially when it comes to workers using their own cards.

Real-time data capture can mean faster approvals and next-day reimbursements — especially since Abacus uses its own payments processing platform, the executive said. That supports workers’ confidence in using their own cards for corporate purposes, though Qari added that he has also seen an uptick in the use of virtual card technology for employees to make subscription purchases for the company. All of this enables a more responsible corporate credit card policy, he said, with fewer cards landing in fewer employee hands — and employees not having to access corporate credit card information when they use virtual cards.

“Mid-market companies are essentially taking that as an opportunity to recuse their outstanding corporate liability by having fewer corporate card programs outstanding and encouraging their own employees to use their own cards to pay for business expenses,” explained Qari. “Employees feel comfortable because they know they can get paid back quickly.”

Control is top priority for mid-market firms when developing a payment policy for employee spending, he added. Businesses need control on a merchant-by-merchant basis, sometimes on an employee-by-employee basis, and certainly over transaction values.

“That’s going to be a big trend over the next few years, where companies have the payment flexibility to empower a VP of sales or marketing, or even someone more junior on the team, to make purchasing decisions,” the executive said.

Combining real-time data analytics with a hybrid of electronic payment solutions can support the complexities of mid-market demand when it comes to spend management. It’s a unique position for a company to be in, but as payments and data technology evolve, expense management service providers are more able to meet mid-market needs.

“The mid-market, from what we’ve learned, is focused on two main things,” Qari recently told PYMNTS. “First, from the employee experience, they’re looking to get a simple, straightforward way to get the expenses created as fast as possible. But now that they’re no longer a small business and they’re in the mid-market, they’re looking to have a higher degree of control and flexibility around the types of approval flows, expense policy and audit controls, as well as the flexibility with which they can manage that information.”



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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