As hardware, software, and AI evolves, so does the demand for the products that harness them—making technology a formidable industry specialization for accounting firms.
While tech companies face many of the same challenges as other organizations, their business model and fast-growth make them well-positioned to benefit from spend management.
A proactive approach to managing spend
For many accountants, expense management and spend management may refer to the same discipline: the process of managing after-the-fact expenses. However, there is a distinction.
Expense management often refers to managing after-the-fact expenses. It’s a process you’re no doubt familiar with. Employees incur an expense during the course of business. They (most often) pay for it with their own credit or debit cards. Then, after a set amount of time, they roll all of their expenses into a report, along with receipts, for reimbursement.
Accountants then receive the reports, code the expenses, check them against guidelines, and reimburse employees. It’s often a lot of heavy lifting—a time-consuming process made of data entry and requests for receipts or more information.
Most notably, the overall process of incurring, reporting, and reimbursing an expense can span across multiple months and extend the timeline for closing the books. By the time accountants have the data they need, it may already be 30 days old depending on when a report is filed. This makes it harder to provide accurate and timely advice.
Spend management focuses on viewing, controlling, and managing cash flows in real-time and in one location. When you move to spend management, you add proactive budget enforcement to the expense process.
Spend management for technology companies
When applied to your technology clients, here’s an idea of how spend management works.
Setting up Budgets and Corporate Cards1
Budgets are set up and physical and virtual cards are mapped to them based on variables such as departments, people, projects, or specific budgets. Your client can issue as many as many cards as needed. Your client sets limits for each budget and card, which helps controls spend. Your firm can assist by overseeing budgets, reviewing spending, and advising on cash flow.
Expenses
When an employee pays for a dinner or an invoice, that amount subtracts from their allotted budget. As soon as the transaction is charged, the employee receives a reminder on their mobile device to upload a receipt. If the transaction has not been automatically precoded, the employee at that time can add a code . Then they are done, providing codes and documentation and without having any out–of-pocket expenses. And all the information is synced with accounting software.
What if an employee needs more money and they’re not approved? Spend doesn’t have to come to a stand still. Employees can request more budget online or via a mobile app, which budget owners can approve or deny within minutes.
Even better - your technology clients can use Slack to have employees request more funds, meaning they can work where they like to work.
Automating and Analyzing Spend
Your spend management software syncs automatically with employee charge and virtual cards, meaning your client’s spend is available in real-time by department, team, project, or individual budget via a handy dashboard. You can catch unusual spend or abnormalities (for example, duplicate accounts/payments for software subscriptions). Reviewing the spend also helps you understand how budgets are tracking, and trends based on spend from previous months across any budget. You can also see what’s forecasted for future months to preemptively prepare for spend.
Your firm chooses how to collaborate with clients for this service. Often, accounting firms will help their clients set it up and assist with budgets as an additional service if requested. Once the spend management system is set up, they hand over day-to-day administration (for example, issuing cards, controlling budgets, etc.) to their clients and focus on areas such as advising on cash flow, month-end close, etc.
Why Are Your Technology Company Clients Ideal For Spend Management?
Your tech client’s businesses typically rely on common recurring spend such as Amazon Web Services and Google Hosting. They also grow their businesses assertively through online advertising like Google Ads. With BILL Spend & Expense, your clients can opt to use a separate virtual card for each vendor, protecting physical corporate cards and providing better fraud control and subscription management for online purchases. Virtual cards can be issued within minutes by authorized individuals and are safer in an online payments setting.
They can also enforce budgets without heavy lifting and delegate budget responsibility. With how quickly technology companies can grow, they’re interested in empowering employees to make decisions and drive projects.
By mapping cards to budgets, accounting firms can set guardrails for spend while employees have a level of autonomy over their budgets.
Spend management is especially accommodating for remote or hybrid employees, since they can spend anytime, anywhere or request more budget via a mobile app, online access or even Slack. And because spend is captured and reported on as it happens, employees and accountants can ditch paper expense reports.
Finally, card-based spend management can unite all spend and that spend can be applied towards cash-back rewards2 for the company. That means each expense tied to a corporate card from an spend management system is counted towards rewards. With recurring expenses like Amazon Web Services and other software subscriptions, online advertising, employee expenses, and more on a BILL Divvy Corporate Card, your tech clients can maximize their cash-back rewards.
It’s a win/win for you and your client. The client gets cash. And you get applause for helping your client’s bottom line and saving time when closing the books.
Why is Spend Management Good for Accounting Firms?
The benefits for your technology clients are plenty. But how does spend management benefit an accounting firm? Here are four benefits:
- Launch new services without straining resources - Automating spend management means the process is less labor and time intensive. If your firm is not currently offering spend management, this is an opportunity to introduce a new service and revenue stream without straining internal resources. This is an ideal way to attract new clients while strengthening client retention.
- Enhance advisory power - Real-time data also fuels your advisory services, putting the information you need for effective advice. You’re guiding the client based on current data, rather than data that might already be a month old.
- A quicker close - Ditch slower closes and move to a continuous close. The data you need to close your client’s books is already centralized, documented, and coded in a spend management system that syncs with Quickbooks Online, Sage Intacct, and Oracle NetSuite.
- Save the day - By taming your tech clients’ budgets, setting them up for cash-back rewards, and having more data for strategy and decisions, you prove yourself a valuable resource to your client. This opens the door to more referrals and long-term business.
Introduce Your Technology Clients to Spend Management
Ready to get your technology clients going on card-based spend management? Turn to BILL Spend & Expense.
1 Card Issued by Cross River Bank, Member FDIC. See respective offers for details.
2 See respective offers for terms.
