Smashing ‘Spend Management’ Silos Gives SMBs Holistic Digital View Of Finances

Poor expense management can sink a company – especially when costs spiral out of control and when far-flung internal operations don’t provide a holistic view of where the money goes.

Thejo Kote, founder and CEO of Airbase, said that for larger firms, business spend management has become a “category” of B2B enterprise software, marked by names such as Coupa, SAP and Oracle, among other companies. But for smaller and mid-market firms, there has not been a similar level of service geared toward the comprehensive, holistic management of business spend.

“It’s all been siloed,” he said – and firms have to contend with all manner of non-payroll expenses such as marketing and software, food and travel, and contractors that are spread out across corporate card spending and purchase orders.

“Accounting and payment teams are receiving invoices” that are being processed on systems like Bill.com, “and employees are spending their own money and trying to get reimbursed,” Kote noted – and that’s tied to a dedicated system like Expensify.

Add it all up, and there can be anywhere from five to six different systems running at once to grapple with requests and approval workflows. But there’s a strategy that can make things work a lot better, and can address the pain points within expense management without forcing managers to toggle between apps and run manual processes.

A Single Platform   

“You can bring all of the company’s spend into a single platform,” Kote said, adding that “if you can bring the complete life cycle of how money is spent – from requests and approvals to payments, to accounting, automation and operations, all the way through to recording them correctly in the general ledger,” then all of the pain points can be alleviated.

Automating the flow across a platform also eliminates the manual processes in the back end that can lead to mistakes, slow down the month-end close, and take time away from actually running the business. Executives and various teams have to log into every system and download data separately – and finance and accounting professionals have to follow up with people to get data on transactions that happened in different systems.

“It’s death by a thousand cuts,” said Kote. “Every part of the company suffers in a different way. It’s just a really bad experience overall for employees who want to spend money, for managers to approve the spend on a day-to-day basis, and for the finance and accounting teams, who must make sure everything is recorded.”

Against that backdrop, he said, there is no reason that corporate cards should be a separate category of product that companies work with, that bill payments should be separate from invoice processing, or that none of it should be connected to ACH or check payments.

Better financial infrastructure can help break down the silos and make it possible to centralize expense management, Kote noted. That centralization, particularly through platform models, will ultimately be the default expectation of the market, he said.

Airbase recently announced a $60 million Series B fundraising round that valued the firm at $600 million, and said the proceeds will be used to hire more people and develop technology, while expanding scale and scope. “We’re going to be more aggressive in terms of how we invest in our product. And we’re doubling the size of our product team to do so,” Kote told PYMNTS.