Digital Solutions Help Corporates Master Spend Management Chaos

Business-to-business (B2B) transactions remain mired in a paper-based world where finance teams have their hands full.

Quite literally — after all, paper checks and physical invoices won’t send themselves.

That’s why PYMNTS sat down with Aaron Bright, new business development at Galileo, Karandeep Anand, chief product officer at Brex, and Herman Man, CPO at Bluevine, to get their thoughts on simplifying B2B complexities and streamlining expense management through tech-driven solutions.

“Complexities bottlenecking current processes are typically around payment terms and pricing negotiation, invoice management and spending according to budget and terms, making the payments themselves, and reconciliation with your back office,” Man explains.

“Why all of this even matters from a business perspective is ultimately the company leaders are trying to stay on budget,” Anand adds. “The single biggest challenge in B2B payments is that they are so fragmented across the company that being able to get a good healthy view of what my budget is, and where my actuals are, is the business problem most people are trying to solve. And once you finish that layer, then comes up the most important question, am I getting the ROI [return on investment] on my spend?”

And with all the ingrained complexities and fragmented silos threading through the B2B ecosystem, it’s no wonder that CFOs and finance teams struggle to gain a clear view, much less a strong handle on their spend.

That’s why, as Bright says, “being able to utilize a platform that can actually help, with an architecture that supports approval hierarchies or budgets to different corporate hierarchy levels,” can help simplify expense management bottlenecks.

How Technology Can Revolutionize B2B Expense Management

As technology advances, the potential for simplifying B2B complexities becomes increasingly promising. Tech-driven expense management solutions can streamline processes, provide better control over budgets, and ultimately offer a healthier view of financials.

Only one question remains: Will CFOs embrace these innovations and unlock the full potential of their B2B expenses?

“The larger the company, the more departments, and the more frequent it is that the left hand doesn’t talk to the right hand because there’s no visibility,” Anand says. “And a lot of the efficiency of the dollar that can be spent comes from getting the right visibility [and translating that into spend efficiency].”

And it may seem simple, but operational transparency into spend can revolutionize the way businesses manage their finances as well as optimize their financial workflows and payments.

“The need for expense management to understand the spend, to understand how it maps back to policies and budget, is fundamental and really rudimentary,” Man says.

“It’s about rich data availability and visibility. If you can utilize that, then it will allow you to be able to budget more effectively,” Bright adds.

Tracking expenses accurately becomes challenging when payments are fragmented across the company and locked up in manual and paper-based processes, which is why digital and electronic commercial payments, and the real-time visibility into expenses they provide, offer such an attractive solution.

“We’re seeing more and more trends of people saying, ‘How do we embrace automation and digitization of the actual payments?’” Bright says.

The Digital Advantage

Digital payments offer the advantage of leveraging cards for transactions, providing businesses with enhanced visibility and control over their expenses.

This transparency allows companies to coordinate expenses across different groups within their organization, ensuring efficient allocation of financial resources with real-time visibility into expenses.

“You have the advent of FedNow. You have now the card rails. You have all these things. And there’s a lot of value to being able to see a real-time transaction going through,” Bright explains. “And it’s not a secret that if you’re paying someone to initiate a physical check or an ACH, that is an expense, versus if you can shift some of the payment to a card type of payment.”

“Once you go digital, there’s a lot of extra metadata that’s flowing between the systems so you’re no longer sitting and doing reconciliation and closing the books manually, because you already know what the invoice was, what the fees were, whether the payment was or was not settled, all of this is very quickly captured without human input,” Anand says. “And that’s important, because accounting teams just can’t keep scaling — you can’t keep having humans constantly in the process to pay out, track the payments, reconcile them, it very quickly becomes very error-prone.

“What organizations really care about is the operational efficiency savings and closing the books. If you can even save some eight- or 10-people’s worth of work at the end of the quarter and finish and close the books within 24 to 48 hours, that is priceless,” he adds. “There are two ways to monetize [digital payments], which is efficiency of the finance teams, and then actually efficiency of the payments itself.”

Additionally, Man emphasizes that, “having the ability to have centralized control from an admin” standpoint is so important. “It’s about having one single source of truth along the payment chain.”

“We do need a total spend solution in the market because that’s where the market’s headed now,” Anand says.

All three executives agree that by embracing and focusing on real-time management, centralized control, and rich data integration, businesses of all sizes can optimize their financial workflows, enhance efficiency, and unlock new opportunities for growth.