Spend Management Got More Granular and More Important in 2023

Where a business spends money tends to define its go-forward strategy.

But often where enterprise spend disappears to is opaque, with some departments sending checks to their vendors, others using electronic transfers, and employee reimbursements handled on an island.

Fortunately, 2023 saw the rise of data-informed spend management controls, including the growing adoption of virtual cards and other payment innovations, that increasingly brought transparency — and oversight — to the spend management landscape.

After all, given the challenges of today’s shifting macro environment and the fact they are unlikely to abate in the New Year, finance teams no longer have the luxury of taking company spend at face value — and instead are turning over every available rock to cut costs and unlock capital.

And businesses relying on manual or entrenched spend management processes are now finding themselves increasingly vulnerable compared to their peers who have more fully embraced digital spend programs and virtual cards.

That’s because no one wants to be stuck manually filing reporting and reconciliations while other businesses are done with just one click because all their payment data and input is captured automatically, without the need for human input.

Digital spend management solutions are the way for faster, more secure, and efficient payment processes — and this past year saw a radical transformation of their capabilities.

Read more: A Tight Economy Calls for Spend Management Automation

Granular Enterprise Spend Data Informs Better Decision-Making

PYMNTS Intelligence has found that virtual cards and digital spend management solutions can help finance departments close the books faster while simultaneously protecting against fraud.

And a drumbeat of marketplace announcements in the last month of the year have underscored just how important gaining a granular level of insight into enterprise spend is for organizations.

This week alone, Expensify added a budgeting tool to its financial management app for businesses allowing admins to set monthly or annual budgets for teams, departments, employees or the company as a whole, as reported on Wednesday (Dec. 20).

Expensify also recently launched a new integration with Booking.com for business travel that allows business travelers to automatically upload travel receipts from Booking.com into Expensify, eliminating the need for manual data entry and reducing potential errors.

On Tuesday (Dec. 19), Uber for Business announced new integrations with expense management providers Brex and Ramp, allowing receipt matching for Uber rides and meals to be automated, helping companies simplify expenses and save time.

Elsewhere, Conferma Pay and Mastercard expanded their partnership to enhance expense management and hotel reconciliation for employees and corporations, enabling multiple mobile virtual card payments, providing a convenient and secure travel payment experience.

It may seem simple, but as these marketplace advances show, establishing greater operational transparency into employee and departmental spend can transform the way businesses manage their finances, helping to optimize growth by simplifying expense management bottlenecks, streamlining processes, providing better control over budgets, and ultimately offering a healthier view of financials.

See also: Small Steps, Big Change: Unlocking Growth by Modernizing B2B Payments

Making the Way Payments Were Done Historically Ancient History

PYMNTS Intelligence has found that with the rise of digital payments, employees increasingly expect business expense reimbursements to come sooner — without waiting to receive and deposit a check.

On the other end of the spectrum, remotely issued virtual cards have emerged in the corporate world as a popular, easily deployable solution where no reimbursement is necessary.

“In today’s operating environment, being reactive leaves firms at a disadvantage. Fortunately, virtual cards are changing the game for businesses by letting them proactively — and easily — control their spend,” Dan Hanks, vice president of global product development at i2c, said in an interview with PYMNTS.

Companies are increasingly recognizing the importance of expanding corporate card programs and integrating mobile virtual cards to regain control over expenses and enhance employee experiences, leveraging digitization to improve cash flow, reduce errors and simplify controls.

“The largest corporations in America are using some very old, very reliable monolithic systems to manage their treasury function,” Ernest Rolfson, CEO and founder of Payments-as-a-Service solution Finexio, told PYMNTS.

But 2023 witnessed a strong thaw in historic, manual enterprise spend. And that trend of digital transformation will only continue as generational shifts increasingly impact corporate America.

“This is the first generation of digital natives, and they prefer digital payment methods over traditional ones,” Jacqueline White, president at i2c, told PYMNTS.

“Business workflows need to be optimized around the payment,” Katelyn McCarthy, vice president of strategy and business development at Discover Global Network, told PYMNTS, adding that, “the payments sector will continue to experience growth in digital payments, and there will be opportunities in a couple of different areas.”

The ability of virtual cards and other digital spend management solutions to unlock new growth levers and optimize financial workflows and payments may also find a boost from other concurrent innovations, including artificial intelligence (AI).

PYMNTS looked at the role AI can play in the spend management space earlier this year in a conversation with Jamie Anderson, chief revenue officer at U.S.-based global spend optimization firm Emburse.

He said AI could be transformative, assisting firms that have collected years’ worth of data on their platforms to better grasp spending at a more granular level, and establish policies based on a previous year’s spend or forecast future outcomes.