We all know it’s been an uncertain few years for almost everybody across the world, both politically and economically.
In the UK, first there was the Brexit referendum, with subsequent years seeing Brexit deals being drawn up, rejected, and drawn up again. The withdrawal date shifted on a regular basis, finally happening in January 2020. At the same time, the US elected its 45th president in Donald Trump. And then we witnessed the most tumultuous election cycle in decades and the country installed Joe Biden as its 46th president in January 2021.
Then of course the world was brought to its knees by the Covid-19 pandemic, affecting our health, the economy, jobs, schooling and our everyday lives.
So it’s not surprising that organisations have had to adopt new approaches to their business decision-making. Not least to do with business spending.
The importance of spend management
Put simply, spend management refers to the processes used by a business to control its spending. This can be anything from office equipment and technology costs to employee travel and any expenses incurred. Anything that a workforce needs to do their job and do it well.
With the pandemic constraining people to their homes, spending in these areas became almost non-existent. But as we start on the road to leaving the pandemic behind, businesses will need to start spending again. Keeping a tight rein on variable expenditure, such as business travel and expenses, is the most logical tactic.
When business travel starts to come back in earnest, how will companies decide whether a trip is worth making? For frontline staff, like commercial teams including sales and customer success, how can they do their revenue-generating jobs effectively if they aren’t permitted (due to costs, not restrictions) to make business trips? Rejecting expense claims further serves to frustrate other staff to the extent that they lose focus on vital operational tasks that contribute to business growth.
So how do you know which expenditures are actually essential to sustaining revenues and business growth? How do you make sure your business processes and procedures are proportionate and designed to support profitability?
Taking advantage of intelligent expense management
This is where intelligent expense management helps you control and prioritise spend to ensure that business travel expenses are a financial driver, not drain, especially in times of economic uncertainty. Here are five ways it can help.
1. Forecast potential spending problems
Expenses management systems that tie spend to customer and revenue data such as that held in your CRM give you comprehensive analysis of all expenses data. As a result, you can make more accurate financial forecasts on how much it costs to acquire and retain customers. You can also monitor ROI against sales forecasts and drill down into team, customer and employee data to understand how costs relate to revenue, adapting policies and spending limits, if necessary, in response to business priorities. You can pinpoint teams and projects where overspending is an issue and focus on improving profitability.
2. Better still, prevent overspending – and then educate
The same intelligent expenses management technology should enable you to automatically track, report and analyse all expenses management data in real-time. With instant visibility of spending, when patterns of overspending start to occur, corrective action can be taken to minimise financial risk. Dynamic expenses policies based on tangible business outcomes should also be in place to address the root causes, preventing further overspending. You’ll also know if you need to find alternative suppliers or routes in response to changing organisational requirements or whether it’s a question of educating employees to make smarter choices.
3. Reduce losses to finance and time
Automated expenses management also eliminates the human errors that often lead to financial losses such as overpayment or miscalculation from manual expenses data handling. In addition, a single source of truth for simplified expense management means there’s no need for rekeying and data exports that can undermine reporting accuracy. An example here is VAT reclaim. Companies are missing out on over $30 billion of potential VAT refunds every year, due to improper receipt capture and VAT processing.
You also reduce the amount of time your finance team spends on processing employee expenses. With less mundane admin, your people are more productive and can focus on higher value work. Fewer staff can achieve more increasing productivity levels in the long run.
4. Improve compliance
Set and automate limits and rules within your expenses management system. That means you can easily flag any non-compliant requests. If they’re justifiable, you can quickly enable an expenses investment with a clear understanding of the potential ROI, so you don’t undermine or delay business-critical sales efforts. If non-compliant expenses requests don’t support ROI, you can intervene to reject them and recommend compliant alternatives.
Legacy expense processes often mean employees record their spending on spreadsheets, which are amalgamated and reviewed by the expenses team. As well as taking a lot of time, this increases the opportunity for fraud through errors in approval, corrections and reimbursements.
5. Support revenue generation
Steering a course of prudent travel and expenses management in the context of customer deals helps protect your organisational finances without cutting off the flow of sales opportunities. With intelligent analytics in a unified travel and expenses system, you can understand customer acquisition costs and model the number of visits typically required to close a deal. You can set expenses policies to allow for these vital customer engagements to take place, with full visibility of the projected ROI.
“You have to spend money to make money”
The first major usage of this phrase was in 1891 by industrialist George Eastman during an interview with the New York Times. Regardless of its origins, one thing remains clear: businesses need cash to make more cash.
Economically everyone’s had a tough time of it recently so businesses are naturally going to continue to save on costs – not encourage them. But when your competitors are getting out there again, will you get left behind?
Recently JP Morgan leader Jamie Dimon talked about how some of his bankers lost out on a deal because “the other guys visited and ours didn’t.” So business leaders are going to need the right data to be able to make the right decisions on who gets to travel, why and for what purpose – if they’re to remain competitive.
SalesTrip attributes every travel expense to a business outcome and delivers trusted insight into ROI immediately. It helps you manage expenses proactively, meeting live business needs for individual employees and management whilst being vigilant to block overspending and responsive to valid expenses investment that drives business growth.