Embedded Finance Tracker® Series Report

The Data Driver: Harnessing Real-Time Data for B2B Expense Management

October 2024

Effective B2B expense management is crucial for any firm conducting B2B transactions, as overspending can quickly erode profit margins. Leveraging real-time spending data can be a powerful solution for keeping expenses under control.

PYMNTS
01

Data insights are essential for B2B expense management, as they offer accounting staff a holistic view of spending patterns. With this information, teams can make better expense decisions and control costs.

02

Accurate data is crucial for effective B2B expense management, but legacy payment processes can undermine this data collection. Paper checks and manual data entry increase the risk of human error, making data less reliable.

03

Companies are increasingly investing in data visibility tools to control spending. These tools streamline expense procedures and support better financial management.


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    B2B expenses are a regular part of everyday corporate operations and a core component of accounting teams’ portfolios. These teams must ensure corporate spending stays within budget and aligns with projections, or costs can quickly spiral out of control. Unfortunately, many still rely on manual data entry and paper receipts to track expenses. This increases both workloads and the likelihood of errors.

    Leveraging real-time spending data can significantly enhance B2B expense management. Data-driven insights provide businesses with a lens through which to analyze and understand their spending patterns in real time. Data visibility tools, such as expense management software incorporating analytics, can help firms enhance transparency and spend control, enabling them to stay on budget and remain financially stable.

    Real-Time Spending Data Improves Decision-Making

    Data insights are essential for B2B expense management, as they offer accounting staff a holistic view of spending patterns. With this information, teams can make better expense decisions and control costs.

    Data analytics drives effective expense management.

    Analytics and reporting tools give accounting teams real-time insights into B2B expense patterns, organizing costs by employee, project, category and more. This allows accountants to pinpoint problematic trends and make more informed corrective decisions. For example, these tools can indicate whether an employee consistently exceeds their expense limit, allowing managers to address this directly instead of issuing companywide reminders.

    Data analytics

    gives accounting teams real-time insights into B2B expense patterns.

    Data analytics also allows accounting teams to automate much of this expense management decision-making. For example, these tools can set spending limits per department and automatically decline any transactions exceeding those limits, preventing overspending. They also can suggest improvements to accounting processes, boosting efficiency and overall financial health.

    Emburse recently introduced an online travel expense tool.

    Travel expenses are a perpetual headache for accounting teams, as employees’ spending decisions sometimes bypass or stretch company guidelines. Emburse’s new tool aims to streamline the expense process and ensure data integrity and compliance, offering more accurate insights into travel expenses. The company is also enhancing its existing expense management tool with increased automation and artificial intelligence (AI), next-generation optical character recognition (OCR) and automated expense item creation. These capabilities will provide corporates with even better data insights for managing B2B expenses.

    Legacy Payment Processes Impede Data Accuracy

    Accurate data is crucial for effective B2B expense management, but legacy payment processes can undermine this data collection. Paper checks and manual data entry increase the risk of human error, making data less reliable.

    Many corporates still rely on manual processes for expense management.

    48%

    of firms say they spend too much time on expense reconciliation.

    According to a recent report, manual expense processes remain prevalent in markets like the United Kingdom and Germany, where 50% of businesses still rely on pen-and-paper systems. What is more, nearly half of employees are required to manage their own expenses. In fact, five of the six countries surveyed reported an increase in the number of workers managing expenses. As the number of employees managing expenses rises, so too does the likelihood of data entry errors.

    Other problems stemming from manual processes include time wasted on expense reconciliation and ineffective software that fails to catch data entry errors. Moreover, 41% of mid-sized companies report resistance to process changes, further complicating efforts to address these challenges. This is often due to employees being reluctant to admit mistakes, making them disinclined to embrace large-scale expense management improvements.

    Manual expense management is obstructing construction firms.

    A recent study of construction companies highlighted the negative impact of manual processes. Roughly half of firms surveyed reported devoting excessive time to reconciliation, and 56% encountered wasteful spending. Among those that experienced wasteful spending, 36% believed that overspending cost them as much as $1,000 per quarter, while 6% estimated it cost them more than $5,000 per quarter.

    Some construction businesses reported using multiple expense management methods simultaneously, including accounting software (48%), expense management software (33%), spreadsheets (36%), email (33%) and more. Incredibly, 13% admitted they had no formal process in place to manage spending.

    Corporates Prioritize Investments in Data Visibility

    Companies are increasingly investing in data visibility tools to control spending. These tools streamline expense procedures and support better financial management.

    Data visibility tools enhance firms’ operational efficiencies.

    A recent survey revealed that 43% of small companies and 35% of large companies are enhancing the visibility of their spend management processes. These investments aim to achieve better internal spend control, improve efficiencies and minimize risk. To this end, companies are leveraging a variety of tools to improve visibility, including corporate cards and expense management software.

    So far, these investments are proving effective. The same survey found that 51% of respondents rated their organization’s spend management effectiveness as very good. Corporates are also adopting cloud-based solutions and automated tools to further optimize their B2B expense management.

    43%

    of small companies are increasing the visibility of their spend management process.

    Galileo recently added Mastercard Smart Data to its expense reporting solution.

    Galileo has integrated Mastercard’s web-based expense management solution, Smart Data, allowing its FinTech partners to offer enhanced expense reporting and analytics to their business clients. The system automatically ingests detailed purchase information into enterprise resource planning (ERP) or expense management systems. This improves spend visibility and allocation while simplifying expense management processes. It also enhances the ability to control spending and generate reports, thereby facilitating more effective expense data visibility.

    Investing in Advanced Data Visibility Tools to Optimize B2B Expense Management

    Data management tools offer unprecedented visibility into B2B spending and expense patterns, allowing businesses to identify areas of overspending, negotiate better supplier deals and optimize procurement. These solutions can uncover hidden insights and trends that human analysts may overlook, enabling more informed decision-making and strategic planning.

    Investing in these solutions can also drive significant cost savings and improve financial performance. These tools can automate many aspects of expense management, reducing the time and resources required for manual data entry and reconciliation. Additionally, they can help ensure compliance with company spending policies, prevent fraud and minimize reporting errors. By streamlining expense processes, businesses can focus resources on more value-added activities, boosting overall operational efficiency.

    Finally, real-time spending data and insights enable companies to be more agile and responsive to market conditions. Up-to-date information on spending trends and supplier performance can give companies a significant competitive advantage in the current market environment. These tools help businesses identify opportunities for cost reduction and negotiate better terms with suppliers. By integrating spend data with other business intelligence systems, companies can gain a holistic view of their financial health and make more strategic decisions about their future investments and growth strategies.

    About

    Galileo is a leading financial technology company whose platform, open API technology and proven expertise enable FinTechs and emerging and established brands to create differentiated financial solutions that expand the financial frontier. Galileo removes the complexity from payments and financial services innovation by providing flexible, open API building blocks and a secure, scalable, future-proof platform. Trusted by digital banking heavyweights, early stage innovators and enterprise clients alike, Galileo supports issuing physical and virtual payment cards, mobile push provisioning and more, across industries and geographies. Headquartered in Salt Lake City, Galileo has offices in Mexico City, New York City, San Francisco and Seattle. Learn more at galileo-ft.com.

    PYMNTS INTELLIGENCE

    PYMNTS Intelligence is a leading global data and analytics platform that uses proprietary data and methods to provide actionable insights on what’s now and what’s next in payments, commerce and the digital economy. Its team of data scientists include leading economists, econometricians, survey experts, financial analysts and marketing scientists with deep experience in the application of data to the issues that define the future of the digital transformation of the global economy. This multilingual team has conducted original data collection and analysis in more than three dozen global markets for some of the world’s leading publicly traded and privately held firms.

    The PYMNTS Intelligence team that produced this Tracker:
    Managing Director: Aitor Ortiz
    Senior Writer: Andrew Rathkopf
    Content Editor: Joe Ehrbar

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