Non-payroll expenses are a drain on finance teams’ time and energy.
Gathering, collecting and reconciling expenses are often laden with paper-based processes, chasing down receipts detailing what employees paid, determining whether they adhered to company policy — and weeks or months after the fact, finding places where costs could have been controlled more efficiently.
Michael Budde, CFO of Banyan, told PYMNTS that item-level data can help cut down on those back-end processes, aid company belt-tightening and boost corporate bottom lines.
“When CFOs are thinking about time, about productivity, about how to focus teams around the core objectives of the business,” said Budde, “that granular information — the items or services bought, when, and for how much — is all transmitted as transactions happen rather than weeks after the fact can pay dividends.”
Cost Efficiency in CFOs’ Sights
The urgency to use technology to improve operations is mounting. Inflation seems poised to last well into 2023, and corporate belt-tightening has become the norm. In the current tough macro environment with many businesses preparing for a recession, “CFOs have identified cost efficiency as a primary strategic objective for 2023,” said Budde.
Automated, item-level expense data can cut down on manual expense management efforts of back offices, he said, while also enabling custom, flexible controls that ensure policy-compliant spend.
And it’s not just a perk for the CFO’s bottom line — audit departments stand to benefit significantly from item-level data access. For instance, supporting employee engagement through recognition spending is important, but it can be extremely challenging to understand whether line-item spending was for in-policy goods and services.
Banyan takes in the data gleaned from receipts submitted from merchants, big box stores and other enterprises, and “carries that data” over to FinTechs and banks to unlock a multitude of use cases, said Budde.
Most immediately, the granular insight offered up by item-level data can tell the CFO where the team is spending money today, he said, and by plugging in that data into expense management providers’ software (and platforms providing access to item-level receipt data courtesy of the Banyan network) the CFO can also identify where that money might be better spent.
Automating Information Flows & the Audit Process for Misuse
Budde also noted there’s money to be saved in simply automating the data flow itself. It costs roughly $58 in back-office manpower hours (as estimated by the Global Business Travel Association) each and every time an employee submits a hotel expense report. And, he said, 1 in 5 expense reports that are submitted have errors — which leads to additional inefficiencies, corrections, reimbursement delays and even a hit to margins (if the firm pays out more than is owed, so to speak).
Amid the great post-pandemic reopening, said Budde, the companies that stand most obviously to benefit from an item-level data network are the ones that are seeing an increased volume of travel. As the so-called road warriors are getting back on the road, hotels and rental cars are getting booked — and there are the all-important client meals.
Wielding corporate cards to pay for it all is simply par for the course. One might hope for integrity as those employees hit the road on behalf of their employers, but that’s not always the case. Budde offered up the examples where an employee might rent an exotic sports car during a business trip — or charge $2,000 on the card for dinner attended by just three people.
“If you’re powered by Banyan,” he told PYMNTS, “there’s no ways or areas in which a person can misuse a corporate card. There is an audit trail to support the integrity that all companies, and all executives want to see.” Flagging misuse also winds up having a positive ripple effect in making sure that employees are better aware of, and adhere to, corporate spending policies.
Consumers in Focus Too
Looking ahead, and thinking about other opportunities that lie with capturing receipt-level data, he said that card-linked offers (informed by spending at merchants) and consumer-level budgeting apps will be in focus in the coming months and years.
“We’re effectively [helping banks and others] create a coupon on the basis of using your credit card,” he said. After all, corporates aren’t the only ones who need some belt-tightening help in 2023 and beyond.