B2B Spend Management Gets Closer Look Amid Economic Clouds

The economic uncertainty that characterized 2022 will continue to drive digital transformation in 2023.

So says Adriana Carpenter, CFO of Emburse, an expense management and accounts payable (AP) automation platform. Many of her company’s clients are expected to still be looking to optimize revenue, she said, especially given the size and importance of the business-to-business (B2B) payments category and continued management focus on fiscal health.

PYMNTS sat down with Carpenter to discuss her thoughts on the past year, and to gauge her outlook for 2023.

Business Futures Hinge on Data

For a CFO attempting to predict future revenue streams and a treasurer developing a liquidity management model, strategy performance hinges on data accuracy.

According to Carpenter, many companies don’t have the resources or expertise necessary to glean critical expense and payment data and transform it into actionable insights.

“The data that exists within companies is at the heart of everything that drives better decision-making,” she said. “Historically, and very commonly, companies do not have a data strategy or data governance models to harness that data and to be able to layer on the tech that’s available to drive better decision-making,” she added, noting the need for companies to make data, data governance, and strategy a priority if they want to capture its full value.

2023 May Shake Out the Tech Agnostics

As we approach the new year and businesses are faced with a mix of gloomy unknowns including high inflation, economic volatility, rising interest rates and possibly even a recession, the tendency to conserve and preserve are stronger than the desire to spend.

That uncertainty, she said, is inspiring businesses to reevaluate how they use their resources — from technology to data — in certain areas with an eye towards boosting and stabilizing revenues.

Unfortunately, she said, that also means that companies are drilling down into their expenses and looking for ways to optimize their earnings while mitigating low-priority or frivolous expenses.

“[Businesses see] the criticality of enabling technology to navigate and survive what is coming, and what is coming is a lot of uncertainty,” Carpenter said. “The only way to manage that uncertainty is to have plenty of reserves available so that you are comfortable through whatever comes your way. Using technology to drive cost optimization is not only a smart thing to do, but it has also become necessary.”

Those businesses clinging to legacy methods of managing B2B payments and expenses may find themselves at a crossroads, facing competitors leveraging new technology to solidify their advantage.

“Companies want to optimize operations to really jump ahead of their competitors. And I think today’s environment, that technology that exists, makes it easier than ever for companies to do this.”

Evaluating Technology Through a Financial Lens

For businesses seeking to drive revenue, optimize decision-making, and boost their competitiveness, Carpenter believes there may be a single approach to winning on all fronts — committing to digital transformation across data, operations and accounts.

According to Carpenter, “leveraging technology and being able to think about it from a finance lens” is key to unlocking more value from an existing business model. “It drives visibility; it drives accountability, it provides preventive controls and allows you to control spending before it happens.”

Carpenter says that the most competitive companies are now focused on digitally driven modernization of their operations, from data management to expense monitoring.

“For these companies, their priority is digital transformation. For those that haven’t already started down that journey, they need to make sure that this is what they’re doing. Now, in order for that to be successful, you can’t forget about people and the upskilling of the teams that need to be able to use this new technology. And so, I think there [also] needs to be a priority around skillsets of employees to be able to harness the tech that’s available.”