Transforming Back-Office Functions Lets Firms Move Forward With Certainty

Innovation across the payments sector has taken off over the last decade. Driven by automation, speed, security and convenience, electronic payments advances are reshaping back-office workflows and transforming processes historically viewed as static administrative functions.

And with the news this week that digital banking startup Mercury is layering software onto its bank accounts, giving its business customers the ability to pay bills, invoice customers and reimburse employees, the benefits of emerging digital innovations across procurement and spend management are top of mind for businesses.

“Every scaling company needs financial software to run their business. But today, the critical tools that help teams do seemingly simple tasks like pay bills, manage employee spend, and send invoices are needlessly complex … finance teams have to use multiple tools to run these workflows,” Mercury Co-founder and CEOImmad Akhund said in a Tuesday (May 7) news release.

It isn’t just Mercury looking to unlock new efficiencies by leveraging the power of data in payments and procurement, either.

Also this week (May 8), Expensify announced it was adding travel booking and management capabilities to its financial management platform for expenses and corporate cards.

An ongoing wave of innovation is reshaping how organizations approach procurement and manage their expenditures, promising unprecedented levels of agility, transparency, and value generation — all pivotal benefits when measured against the uncertainties of today’s operating landscape.

See more: Digital Solutions Help Corporates Master Spend Management Chaos

Emerging Innovations Are Transforming Business Operations

The core functions supporting administrative functions around expense management and treasury management have not changed, but how those functions are performed and the additional value that can be added around them is continually evolving.

Traditional methods of managing expenses are being replaced by digital solutions that speed up reimbursement times and minimize the risk of human error, Edwin Poot and Jonathan Vaux, global chief technology officer and head of propositions and partnerships, respectively, at Thredd, told PYMNTS in an interview posted in April.

For example, by embracing artificial Intelligence (AI) and machine learning algorithms, businesses are finding they can harness the power of data in optimizing procurement and spend management strategies.

Through the analysis of historical spending patterns, market trends and supplier performance, AI-driven predictive analytics can provide actionable insights to guide strategic decision-making. Predictive models forecast future demand, enabling proactive inventory management and negotiation of favorable pricing terms. Moreover, AI-powered spend analytics identify cost-saving opportunities and detect instances of maverick spending, driving greater compliance and accountability within procurement processes.

After all, given the challenges of today’s dynamic macro environment, finance teams no longer have the luxury of taking company spend at face value — and instead are turning over every available rock to cut costs and unlock capital.

Read more: A Tight Economy Calls for Spend Management Automation

Embracing Innovation for Future Success

“The largest corporations in America are using some very old, very reliable monolithic systems to manage their treasury function,” Ernest Rolfson, CEO and founder of Payments-as-a-Service solution Finexio, told PYMNTS.

But no one wants to be stuck manually filing reporting and reconciliations while other businesses are done with just one click because all their payment data and input is captured automatically, without the need for human input.

PYMNTS Intelligence has found that virtual cards and digital spend management solutions can help finance departments close the books faster while simultaneously protecting against fraud.

“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?” Karandeep Anand, chief product officer at Brex, told PYMNTS last summer.

And PYMNTS has increasingly found that  virtual cards are emerging in the corporate world as a popular, easily deployable solution where no reimbursement is necessary.

“In today’s operating environment, being reactive leaves firms at a disadvantage. Fortunately, virtual cards are changing the game for businesses by letting them proactively — and easily — control their spend,” Dan Hanks, vice president of global product development at i2c, said in an interview with PYMNTS.