The Invisibility Cloak: the problem of being unable to see intra-month spending

Remember the Invisibility Cloak in Harry Potter? Harry used his cloak as a force for good to outwit his adversaries. All very worthy …

Sadly, in the business world, invisibility is not a redeeming feature. In fact, the less visibility you have of your finances the more likely it is that you will struggle to understand where it is your money is going.

Visibility is about having a real time understanding of the costs in your business and their impact on your profitability. In finance, certainty is valuable, uncertainty is often catastrophic.

Traditional accounting practices can be problematic

Many companies lack visibility over their spending because they continue with traditional accounting practices, many of which can be error prone.

The problem with relying on manual payment methods alone is that they’re difficult to scale and vulnerable to fraud.  They include shared corporate cards and petty cash. (Read our petty cash blog here.)

With traditional payment methods it can prove very difficult to track who makes specific purchases, which creates a lack of accountability, and low budget control.

Clunky manual processes usually lack real time data

Manual processes rely on human beings and are inevitably fraught with variation and error.

The process is often conducted differently according to which particular person is implementing it, causing inconsistency and irregularity. And the results are not always visible in real time, making problems tricky to spot. 

All of this means that your business can be forced to manage its finances reactively, constantly chasing and resolving exceptions and anomalies. The better way is to monitor, manage and control finances proactively, which requires them to be more visible, in real time.

How can my company achieve real-time visibility of our spend? 

Spend management applications are an important element in improving visibility of your company spending.

Smart software from Expend, integrated into your company’s operation, enables you to harness powerful automation capabilities to help manage spending in real time. It provides high levels of control and visibility, and therefore means that your finance function is working more effectively.  

There are a number of ways in which expense management solutions can support improved visibility.

Employee payment cards

Prepaid employee payment cards enable specific colleagues to access the funds they need without the control issues caused by a shared company credit card.

You can set spending limits on specific purchases, restrict ATM withdrawals or online transactions, and even block spending in certain sectors, such as pubs or bars. 

Card spend is immediately visible, with approval levels controlled locally. So, for example in a larger team, different colleagues could have various levels of approved spend, depending on their job function and purchasing requirements. Available balances can be quickly reviewed and easily topped up. 

And with a mobile app, spend visibility is improved by the smart capture of receipts, through mobile devices. So, there’s instant reconciliation of purchases, ruling out the ‘lag’ caused by chasing down receipts through expense claims. 

Integration improves visibility

Expense management reaches new levels of visibility when the data from Expend is exported to accounting packages such as Xero and QuickBooks. This eliminates the need to re-key or transfer data from various teams, instead, there is real time integration providing in-the-moment visibility and high levels of accuracy.

More importantly, teams can see the latest status of the budget, making automated spend analysis and financial visibility a practical and achievable outcome for businesses of all types, rather than simply an aspiration.