Businesses Embrace The Growing Importance of Spend Management

Thejo Kote, founder and CEO of Airbase, shares his experiences with how 2021 has transformed spend management. “Companies are waking up to the fact that if they don’t change their approach, they face an increasingly archaic world of slow, manual processes,” he says. Read more of Kote’s insights, along with those of 32 other executives, in “The Way Payments Are Now Done.”

2021 was a very interesting year – not only for Airbase, but also for the spend management sector as a whole.

Just take a look at recent activity in this particular area of FinTech — we’re seeing a significant shift in payment systems for company spending. This has been made possible by the opening up of the payment infrastructure, allowing software companies to build deeply integrated workflow products. Companies are waking up to the fact that if they don’t change their approach, they face an increasingly archaic world of slow, manual processes.

This has been reflected in the millions of dollars invested in the industry, with the likes of Airbase, Ramp and Brex raising impressive figures in their respective funding rounds. I believe the world is becoming aware of what spend management software is, and that’s seen a major shift in how companies’ payments routines have shaped up in the last year.

The growth in the sector is no surprise to me. The problem spend management solves is something I witnessed myself, and it’s what inspired me to create Airbase to address the need for one platform to manage all company spend.

I started the company as a response to something I saw too much of while running my first business: well-educated people sacrificing vast amounts of their time doing low-value work. My talented finance team got bogged down in the chaos of approvals, reimbursements and repetitive, manual bookkeeping tasks. What’s more, inefficient processes and inadequate tools meant that I could not get an on-demand, real-time view of what we were spending as a company.

As I learned more, I came to realize that the status quo for accounts payable (AP) in small and midmarket companies was broken. Using the concepts that are central to our product design approach at Airbase, we have taken a holistic view of the entire process, and have developed a deep understanding of our users’ needs to solve the problem.

Spend management frees up time from manual tasks and provides the tools for finance and accounting professionals to contribute insights, analysis and strategic thinking, making them more valuable to their companies. We’re seeing an upward trajectory of companies adopting a spend management model to provide an intuitive, complete platform for all non-payroll company spend.

Our network is frustrated with legacy systems and processes that create high levels of manual work, slow monthly closes and ineffective cost controls. The rise in remote workforces triggered by the pandemic further magnified those frustrations. Companies have grown accustomed to a remote working approach, and the efficiencies created by a consolidated spend management platform have offered a competitive advantage to globally distributed teams.

This year has shown that my preexisting concerns surrounding the broken systems within companies and how they manage their spend are valid. Now, the rest of the world is rapidly starting to take notice — and this is just the beginning. Spend management is a crucial innovation whose time has come.