Spend Management: The complete guide for growing businesses

Business · 14 December 2022

What does spend management mean to today’s businesses?

Where it used to entail shoeboxes full of receipts to process manually, or sprawling spreadsheets to map budgets, technology has formed a raft of new features for financial administrators looking to gain a better hold on company spend.

But where do you start? With so many platforms vying for attention, we’ll help you boil it down to the basics.

💡 In this guide, we’ll cover:
∙ What is spend management – and why it’s important now
∙ How to start managing your own business spend more effectively
∙ The features you need to make life easier – for financial administrators and employees

Let's get into it.

The state of play

Before we talk about the what, it’s important to understand the why – and, crucially, the ‘Why now?’

The short answer is that global economic uncertainty is on the rise. For businesses, this raises the stakes for all decisions regarding spend. Where, and when, do we decide to scale back? And should we direct our spend elsewhere, or cut costs completely?

These are questions we analysed in detail in our recent blog. But the main takeaway is clear: companies are starting to get smarter when it comes to spending. And that doesn’t just mean how they’re spending – it means how they’re managing, mapping and forecasting spend, too.

What is spend management?

At its crux, the answer is simple: managing everything your business spends its money on across a designated period of time.

This, of course, is true – but take a moment to unpack exactly what that entails.

It encompasses everything from team budgets to individual business expenses, subscriptions to suppliers, company cards to travel logistics and much more besides. Often, that means multiple tools, access details and a need to move data into accounting software.

Then bring in the fact that the number of businesses operating internationally – whether that be through sales, supply chain, new markets or remote team members – continues to increase and you’re left with a picture as exhausting as it is complex.

Or so it used to be, anyway.

Now, you can manage all of this in one place. The number of apps that provide this service (disclaimer: Revolut Business is one) is growing, and with digital adoption doubling over the last decade, businesses are now following in the footsteps of consumers to ensure they aren’t left behind.

>> See how Wild used spend management to power 400% year-on-year growth

How to manage your business costs

So far, so big picture. But what does this look like day-to-day?

It’s simpler than you think. Let’s drill down into some use cases to shed some light on how you could manage your own business spend more effectively.

Reimbursing business expenses

Your finance manager could ask:

“Most of our expenses are paid for by employees, then reimbursed. It takes time to process – chasing submissions, lost receipts, reconciling transactions – each month, and it leaves our team members temporarily out of pocket.”

The spend management solution

Many people – including your team – are feeling the pinch at the moment. So instead of asking them to spend their own money up front and then reimbursing them after the fact, switch to company cards. In the past, this may have required a lot of manual admin (who can use the card? In fact, where is the card? Who used it last?), but not any more.

The solution: cards for all! Every team member that needs to spend can request a card – virtual or physical – and each card can have its own spending limit, or dedicated controls attached to it. It takes far less time to issue someone a card than it does to process a reimbursement claim.

All spend is then automatically tracked and categorised, and employees can upload receipts on the move and then discard them. If needed, cards can be frozen immediately.

How it looks for employees

Request a card → Use it for its purpose (a limited-time business trip, or ongoing use if necessary) → Upload receipts in-app, if required by admin → Submit expenses or claim

How it looks for administrators

Issue cards to staff based on nature of request → Set limits or controls (custom or preset by you, across the entire team) → Approve expenses after submission → Sync with your accounting software (in our case, Xero)

>> Learn more about managing expenses

Subscriptions and repeat purchases

Your finance manager could ask:

“Certain teams have their own subscriptions, or spend exclusively with one particular vendor. We process similar receipts each month, essentially repeating the same work – and have to ensure there aren’t any duplicate submissions, either.”

The spend management solution

These are the situations where virtual cards come into their own. Give team members access to cards that can only be used within specific categories or subscription companies, and view all outgoings – by card, vendor, spending category, date and more – in a personalised analytics dashboard. Digital invoices from your suppliers can be forwarded directly via email to be automatically processed.

Oh, and if you’re spending a lot with a specific vendor, those analytics will help trigger important questions: should we renegotiate our deal, look for another supplier, and more.

For employees

Request a card → Use it for designated purchases → Forward invoice via email → Repeat

For administrators

Issue cards to staff → Set limits or controls (custom or preset by you) → Monitor spending in real-time via Analytics dashboard → cancel an unwanted subscription immediately by deleting the virtual card that pays it

>> Learn more about Spend Management

Issuing cards for large teams

Your finance manager could ask:

“We’re a growing business with a headcount into the hundreds. It’s difficult to provide team members with company cards – let alone with the right spending privileges assigned to them – in a quick, secure way.”

The spend management solution

Whether you’re a team of 5 or 500, you can avoid the pain of management bottlenecks by assigning cards to everyone who needs to spend – instead of only a select few who spend on behalf of others.

For example, many spend management solutions will enable you to preset controls and limits – based on details like seniority, region, currencies and spend category – removing the need for manually granting specific permissions. If that’s still not quick enough, why not explore doing it automatically via an API card delivery?

For employees

Ace the interview, accept the job → Begin the onboarding process → Get a card with your budget on it

For administrators

Paste a comma-separated list of email addresses into your cards list → Choose the card they need → Equip it with the right spend controls

>> Learn more about cards

Managing project budgets

Your finance manager could ask:

“We’ve got a lot of projects running at the same time, each with their own budgets. It’s difficult to keep track of what’s going out, who’s spending it, and where to assign that spend.”

The spend management solution

Set up funding accounts for individual projects. Budgets are allocated to the accounts, and access to these accounts is determined by financial administrators and project leads – and cards distributed to those that need them.

All spend is viewed in one place, as well as forming a part of the overall company spend analytics dashboard.

For employees

Access to budget determined by project lead → Receive card with relevant controls → Spend where necessary to keep workflow moving, and vendors happy

For administrators

Create funding account containing dedicated budget → Determine admin access for relevant team members → Create cards (specific to funding account) for those that need them → Set spending limits → Monitor spend via analytics dashboard

So what’s next?

One thing we’ve learned is that managing spend isn’t simply a question of cost cutting, or channelling expenditure elsewhere. In fact, these are simply resulting factors of spend management – and, when done smartly, the decisions that lead to them will always be confidently made.

Take expenses, for instance; huge steps have already been taken to help make this process smoother. Adding relevant information and receipts to all transactions, then syncing it to your accounting software is an obvious simplification of the process.

But how can you take it to the next level? Company cards, combined with expense tracking, is just one example of how to unlock even greater time savings – and will empower your team as a result.

For employees, it provides a transparent way for them to manage individual and team spend – without the need for manual admin, or covering costs with their own money first.

For finance departments, unlocking a real-time view of all company spend is one thing. Being able to segment everything out, as well as set limits and controls on cards as you see fit, is another. And doing it all in one place? That’s a financial operating system that is simple, structured and secure.

Introducing Revolut Business

If you’re serious about smart spending, then why not book in a demo with our Sales team? One of our experts will talk you through how you can tailor our tools to the needs of your business – and much more besides.

Hit the button below to find out more.

All features mentioned above are available in all our global markets, and covered by our business terms.

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