Preapproval, Virtual Cards: Spend Under Control

Plastic cards. Virtual cards.

Dan DeVall, vice president of business development at Airbase, told PYMNTS that the work-from-home movement has led to an environment where finance teams need not choose between plastic or virtual cards.

Turns out that a holistic approach — leveraging both conduits of corporate spend — and the visibility that rich data from tangible cards or digital ones provides can help companies more wisely manage corporate spend. And they offer a range of flexible features that help all stakeholders working remotely, in office, or face-to-face with partners and vendors — call it the equivalent of B2B omnichannel.

The conversation with DeVall came against a backdrop where 80% of buyer-supplier transactions could be completed electronically by 2025.

DeVall said B2B transactions themselves have become commoditized, and the adoption of electronic payments must come with something more compelling than the reduction of the transactional cost itself.

The pivot toward electronic payments, he said, becomes ever more plausible when buyer-supplier relationships become collaborative. “When you consolidate everything,” he said, when data is shared end to end and spend management becomes easier with the aid of applications, “you are eliminating multiple systems that create bottlenecks and reconciliation issues for buyers and for suppliers.”

For the employees themselves — the ones out in the field, so to speak — preapprovals across platforms (with the benefit of spend management software) are critical.

However: “Not all pre-approvals are created equal,” he said.

There’s a tradeoff between prioritizing the speed of payments and the ease of purchasing.

The answer lies with leveraging software workflows that are embedded within the approval processes to make it convenient for every end user.

That intuitive workflow comes via automated flows where employees choose their preferred methods of interaction — email, mobile applications, even Slack.

“This changes the dynamic, which was typically slowed down when you had to ‘force’ approvals. You’ve created an agile approval process,” he said, “especially when you involve a corporate card as part of it.”

Consider the fact that employees are submitting 31% more expenses than they were passing along to their finance departments before the pandemic. And roughly 90% of those employees are expensing items and services that are used as part of the great shift toward working from home (computers and peripherals, for example).

Work from Home is a Permanent Fixture

As work from home has become a more permanent part of our careers, companies are finding it imperative to allow employees to best choose what “works” for them while still ensuring their purchases conform to corporate policy.

Corporate cards, especially virtual corporate ones, DeVall said, give employees the right tools to buy what they need to get their jobs done — right at the time those expenses become critical.

He offered up the example of a new employee who might be coming onboard with a $500 allowance to satisfy their work-from-home needs. With (virtual) corporate cards in hand, companies can ensure that spending caps are in place and digital receipts can be uploaded that show how much was spent on mouse, keyboard and monitor.

“The finance team,” DeVall said, “can be reassured that the purchases are within budget, that they have the right budget approvals, and the accounting is coded correctly for the transaction.” If there’s a violation, he said, the cards can be programmed to require a second approval — or the employee needs to ask permission before they can go ahead with a transaction.

“The software, effectively, becomes the ‘bad cop’ that makes sure that employees are compliant,” added DeVall.

That automatic compliance, he said, eliminates much of the manual work that had traditionally been shouldered by finance and accounting teams. As he told PYMNTS, “virtual cards with spend management allow you to let employees get what they need while ensuring that they’re within policy — that they have the right approvals and the right controls for the back office.”

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NEW PYMNTS DATA: THE FUTURE OF BUSINESS PAYABLES INNOVATION STUDY– APRIL 2022

Plastiq - The Future Of Business Payables Innovation: How New B2B Payment Options Can Transform The SMB Back Office - April 2022 - Learn how all-in-one payment solutions can help businesses streamline B2B transactions and remove AP and AR management frictions

About: While over half of SMBs believe that an all-in-one payment platform can save them time and improve visibility into cash flows, 56% believe that the solution could be difficult to integrate with existing AP and AR systems. The Future Of Business Payables Innovation Report, a PYMNTS and Plastiq collaboration, surveyed 500 SMBs with revenues between $500,000 and $100 million to explore how all-in-one solutions can exceed SMBs’ expectations and help future-proof their businesses.

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