Why enterprise expense management is broken, and how SaaS platforms can fix it.
Managing employee spend at scale is a growing pain point for enterprise finance teams. With rising transaction volumes, decentralised cost centres and strict compliance demands, the traditional reimbursement model is showing its age. In fact, recent research reveals that 81% of UK employees have been left out of pocket by expenses processes, this is a clear sign that existing systems aren’t fit for purpose.
For SaaS developers, this presents a timely opportunity. By embedding expense management features such as company-issued cards directly into existing workflows, your platform can help enterprise customers streamline financial operations, reduce fraud risk and improve employee satisfaction all without adding another standalone tool to the stack.
In this article, discover what’s going wrong with enterprise expense management today, what finance leaders really want, and how embedded finance can give your SaaS platform a competitive edge.
How are corporate finance professionals coping with global employee spend? Based on recent surveys, it seems the answer is not very well. SaaS developers are ideally placed to change this.
From compliance woes, through to the sheer logistical challenge of dealing with scattered cost centres, the larger the organisation, the harder it becomes to get a handle on employee expense management.
Most enterprises recognise this. Ask a bluechip CFO if they would like to optimise expenses management, and they will answer in the positive. But ask them (or their IT team) how they like the idea of yet another standalone banking & finance application to add to their already sprawling tech stack, and the response is usually somewhat less enthusiastic.
For SaaS developers, this is an opportunity. Yours is probably not a “transaction” (and certainly not a corporate banking) platform. But in all likelihood, it has already proved its mettle in serving the needs of multi-entity, multi-user businesses. Embedding expenses payment and management functionality into your offering is a win-win. It means larger customers get a more streamlined, enterprise-friendly way to handle employee spend, within a framework they already use and trust. And for your platform, this additional feature provides an effective hook for extending your enterprise customer base even further.
Discover more about the expenses management challenge facing enterprises, and how your software can address it.
Expenses management as an enterprise pain point: how real is the problem?
For organisations of all sizes, the traditional way of handling expenses management still tends to follow a reimbursement model. Employees pay out for items from their own pocket. There’s lots of annoying form-filling for the employee claimant, followed by equally frustrating checks and queries for the finance team to deal with, before the employee eventually gets their own money back.
It’s not hard to see why this is inefficient. It’s also an area where the rule that scale magnifies inefficiency definitely applies. The bigger your customer, the more likely it is that they are struggling with their legacy expenses management processes.
Specific reasons why larger companies struggle with this area include the following:
Transaction volume and variety
The problem:
More employees means more transactions; all of which need to be processed, tracked and audited. Compared to smaller businesses, there’s usually a wider range of transactions to handle, too (anything from inter-branch travel, through to client entertainment).
Reimbursement for each month’s round of expenses typically involves a multi-stage process: submission of a claim form (and accompanying receipts), review by a finance admin, back-and-forth verifications, budget holder approval, and finally, payment processing.
What enterprises are lacking:
In a word, efficiency. It’s hard to improve a system that is fundamentally flawed. In an ideal world, enterprises ought to be able to replace legacy systems with a better alternative; one where employees can buy what they need without having to spend their own cash – and where the whole rigmarole of claim submissions, reviews, and reimbursement can be eliminated altogether.
System complexity
The problem:
In an SME, you’d expect to see a single expenses management workflow in place. It might not work especially well, but at least everyone is on the same page. Across different business units and cost centres, enterprises are more likely to have multiple procedures in play – perhaps even with subtly different rules on who can claim what.
What enterprises are lacking:
Assorted tools, and idiosyncratic ways of doing things in different parts of the business all store up problems and extra workloads, especially when it comes to data sharing, reporting, and reconciliation. Enterprises need consistency: a single, standardised system for expenses management that can be adopted across all parts of the business.
Compliance
The problem:
Larger organisations tend to face stricter scrutiny from tax authorities and auditors, which means precise record-keeping is an imperative. With sprawling organisations however, the harder it becomes to police possible misuse of funds and prevent fraudulent claims.
What enterprises are lacking:
Enterprises need a more robust system; one that reduces the possibility of miscategorisation, erroneous claims and actual fraud. Auditability is also a priority; namely, real-time visibility on who is spending what.
Expense cards: a better model for enterprise (and their employees)
Company expense cards offer a more efficient alternative to the traditional reimbursement model of expenses management, especially for enterprises. With this, businesses can generate and assign credit or debit cards to employees, enabling them to draw from company funds instead of their personal money. All of this is managed within a framework of spending controls set by the company.
As well as eliminating the problems associated with reimbursements that arise for corporate finance teams, the expense-card model is also very good news for employees. Recent research from Weavr suggests that 81% of UK employees have experienced being out of pocket with works expenses for over a month. A quarter of workers have lost more than £100 because employers have failed to reimburse them.
The last thing enterprises want is to be on the wrong side of stories about staff members suffering as a result of being used as an unofficial line of credit by their employers. 83% of workers told Weavr that they considered the expense card model to be a better, fairer process. A similar number said a robust process is critical when discussing their company with prospective employees.
SaaS Developers in the Driving Seat: The Embedded Finance Advantage
The expense card model is an attractive one for enterprises and their employees alike. So why are so many larger companies still stuck with legacy processes?
For many, the idea of introducing yet another entirely new framework into their already complex tech stack is not an attractive one. Yes; they would like to optimise expenses management, but the inevitable disruption involved in onboarding and integrating a whole new “expenses management platform” is considered not worth the hassle. They do not necessarily want to build out a solution themselves, and neither do they want to take a chance on an offering for a fintech whose offerings are geared largely to the SME market.
But what if the functionality enterprises are looking for – including employee expense cards – could be accessed via the tools they know and trust already, whether it’s ERP, CPM, HR, niche operational planning tools – or whatever application your business offers? This is where the opportunity arises for SaaS developers.
Through Weavr’s embedded finance model, you can access a pre-built expenses management solution for enterprises, fully supported by our embedded payments experts. Using this as a foundation, you can also build out precisely the features that your market intel indicates that your enterprise customers are looking for. Just a few possible examples of this include the following:
- Freedom for your enterprise customers to issue physical and/or virtual cards
- Custom card design
- Analytics and reporting capabilities that align with similar capabilities offered elsewhere on your platform
- Individual, team, departmental and regional budgets
- Bespoke approval workflows, profiles and expense categorisation options
In short, embedded finance helps make optimising expenses management a viable possibility for your enterprise customers. Integrated seamlessly into a platform they are already familiar with, and handled side-by-side with the activities through which many of those expenses are incurred (e.g. project management, business travel, client relationship management, or HR), enterprise customers can access precisely the functionality they need to improve their processes in a way that’s both intuitive and trustworthy – and which doesn’t involve adding another standalone tool to their tech stack.
Meanwhile, embedded finance offers SaaS developers a viable, cost-effective way to build out a bespoke ‘enterprise-friendly’ expenses management offering. The result? A useful way to reinforce your platform’s USP, and enhance its attractiveness in the eyes of potentially lucrative enterprise customers.
Ready to explore how embedded expense management could work in your SaaS platform?
Speak with a Weavr expert to see how easily you can integrate enterprise-ready expense features – including spend controls, virtual cards, and real-time reporting – directly into your software.
Or you can learn more about our expenses management embedded finance solution.
Disclaimer: Financial products are issued by licensed partner Electronic Money Institutions. Availability and terms of use may vary depending on the issuing institution and jurisdiction.
