Spend management advisory: Top six questions answered

There are many reasons why your clients may encounter challenges when trying to manage their cash. Often, it’s because proper tracking and controls aren’t in place. Taking a reactive approach to expenses, like waiting until after a purchase was made to find out that the purchase wasn’t needed, can greatly impact budgets and future financial opportunities.

But there’s good news. Technology has presented firms and clients of all sizes with an opportunity to improve how they manage their cash.

Modern spend management platforms like BILL Spend & Expense give your clients the tools to proactively monitor cash flow as money is actually being spent, as well as set and monitor budgets for employees and departments. For your firm, spend management is an in-demand service that can help you set the foundation for your advisory practice while helping your clients get a better handle on managing expenses. Here are some of the most common questions about spend management services I receive when working with firms, along with the opportunity this service can provide to your firm and your clients.

What is spend management?

Spend management is the ability to view, control and manage a business’s cash flow (including expenses) in real time within a single, centralized location. It is driven by technology to capture the expense at the time of transaction. With spend management, budgets are preset, and controls are in place so credit card spend is accounted for prior to being spent.

Spend management technology includes a corporate card linked to a software platform that offers visibility into client spending. Firms who adopt this technology gain insights into spend patterns, client budgets and overall financial health. This strategic approach facilitates smarter decision-making and enhances opportunities for advisory discussions.

How is spend management different from expense management?

Spend management focuses on the big picture of your clients’ finances, while expense management focuses on tracking day-to-day transactions and financial activity that has happened in the past. The goal of spend management is to keep expenses controlled, stay within preset budgets and eliminate the use of expense reports.

How can offering spend management services benefit my firm?

Offering spend management services can provide several benefits to your firm:

• Improved financial visibility into client financials
• Process optimization
• Deeper conversations with clients that result in better retention
• Opportunity to grow margins through new service offerings

When adding a new advisory service, a major challenge is conveying its benefits to internal stakeholders. As you engage in discussions with colleagues, emphasize spend management as a low-effort, high-reward service that can enhance staff efficiency and boost firm margins. Some efficiencies firms experience with spend management include:

• Automation - Eliminate transactional tasks and operational obstacles in expense management, working towards a continuous close. Freeing up more time for client conversations and growth.
• Standardization - Using technology that works for you and your clients allows convenient access and simplified spend controls with real-time categorization and budget controls. This provides your firm an opportunity to scale.
• Integration - Effortlessly sync transactions between BILL Spend & Expense and your accounting systems, eliminating the need for manual data downloads. Your internal advisory team can now create customizable workflows and access data in one central location.
• Reporting - Modernize your advisory services by catching abnormalities when they happen through custom reports. Enhanced reporting details allow you to drill down into spending by department, team, project or individual budget.

How can offering spend management services benefit my clients?

There are a number of ways that offering spend management can benefit your clients.

BILL Spend & Expense’s budgeting software syncs automatically with employee corporate cards, stopping overspending from happening and giving decision makers real-time visibility into spend by department, team, project or individual budget.

Each employee gets a corporate card, with virtual cards available to make payments even easier and more secure. Pre-defined budgets in the platform allow for more intuitive and detailed spend control. Mobile reminders are also sent when a transaction occurs, so there’s no more hunting down receipts. One of the best parts—no more expense reports!

When an employee makes a purchase, the BILL Spend & Expense solution is trained over time to recognize the transaction’s vendor and suggests the proper coding. The employee still has the opportunity to edit the app’s suggestion before finalizing the transaction.

BILL Spend & Expense also provides the ability to input custom fields on expenditures and tie them directly to your accounting system with numerous industry integrations.

What security features are built into the BILL Spend & Expense solution?

There are several security and data management features built into the BILL Spend & Expense solution.

• The BILL Divvy corporate card uses merchant category code blocking which enables you and your clients to only allow a specific type of merchant or vendor to charge that particular card. This security feature prevents someone from stealing the card number and using it with an unauthorized vendor.
• BILL Divvy corporate credit cards are backed by BILL’s partner bank, Cross River. Since these cards are Visas and MasterCards, the BILL Divvy card features the same fraud protection as other cards affiliated with the Visa and MasterCard payment-processing network.
• Administrators of the platform can set individual budgets for each employee or account so they can’t go over the spend limit. If there are erroneous charges or an employee decides to go rogue, the admin can shut off the card within minutes.

What are the next steps to getting started with offering spend management services?

If you’re looking to learn more about offering spend management services at your firm but aren’t sure where to start, begin by watching this short video, What is Spend Management. Next, review our 5 Steps to Spend Management Advisory whitepaper for more on how to define roles and responsibilities, guidance on creating client budgets identifying an ideal client, and how to price and package spend management as an advisory service.

About the author: Kimberly K. Blascoe, CPA, leads CPA.com’s CAS 2.0 practice transformation programs, focusing on helping firms establish and grow optimized CAS practices through consulting, practice development and training offerings. Prior to joining CPA.com, Kim spent more than 30 years in public accounting, which included leading the CAS practice for a Top 20 firm.