Time well spent: why digitising expenses will liberate CFOs and staff

Who enjoys expense claims? Not the staff who have to submit them, nor the teams that have to process them, and certainly not the CFOs who have much better things to do than approve them. At a time when finances may be squeezed, continually having to gain oversight of spending is a distraction for pressured CFOs, who would rather focus on the bigger picture.

“The CFO’s role is moving towards being the strategic business partner of the CEO,” says Anita Szarek, Global CFO of spend management solution Pleo. “As a CFO, I want to spend the majority of my time focusing on building strategy and being engaged in business development. This means basic functions like cost control and profit-and-loss accuracy need to be smooth. I don't have time to run controls and approvals; for that reason, I need to have real-time data and information visibility.”

Expenses are a necessary evil – staff must travel or buy equipment at short notice – and these costs can often be hidden from sight until it’s too late to see how rapidly they’ve accumulated, particularly owing to legacy accounting systems that involve manual cross-checking of receipts and invoices. Pleo’s latest research shows that 7 out of 10 UK employees (71 per cent) have failed to get receipts reimbursed in the past year, with UK workers missing out on as much as £3,187 in unpaid expenses over the course of an average career. With the cost of living crisis deepening, is it time to close the books for legacy expense management.

Pleo’s spend management solution digitally processes expenses, and issues smart virtual and physical company cards to staff. Its bank-level encrypted cards work anywhere that accepts Mastercard, and functions on mobile payment systems such as Apple Pay. As soon as a card is used, admins can view the details of that individual purchase, as well as company-wide financial oversight, insights and analytics. This helps businesses gain instant visibility over all of their spending – while CFOs concentrate on the big stuff.

Pleo is suitable for both microbusinesses and SMEs, scaling smoothly as the business grows. It integrates with all the major accounting packages, so data can be exported with a single click. Since launching in 2015 the Danish-based company has enabled more than 20,000 businesses across Europe to overhaul their expense systems and democratise the concept of the company credit card.

One of those is Whereby, a global video conferencing tool favoured by Spotify and Netflix. Founded in Norway in 2013, the company has a distributed workforce across 15 locations, and a flexible work policy. COO Jessica Zwaan introduced Pleo when she joined the company two years ago. “I chose to digitise our expenses because I see a traditional expenses system as hindering my ability to focus on what matters,” she says. “Instead of my managers spending time retrospectively approving and looking at costs, I’d rather they were looking forward and enabling good decision-making. There is such a huge cultural shift between blocking or challenging decisions and empowering and supporting good decision-making; this was the path we decided we’d be on the side of.”

Until now, expense filing has tended to be slow, error-strewn and costly, and the shift towards remote and hybrid teams exacerbated the problem. “With the old way of doing expenses there was always a big delay with expense recording management, and many decisions were too late,” says Szarek. “Pleo offers speed of execution: CFOs can immediately see what expenses they have, and they can start making fast decisions. It changes their role from the old-fashioned kind of control-and-command role to a more strategic one of being a true people partner, with more time for coaching and building forward-thinking teams.”

The typical approach to expense claims also means they are a regular source of friction. Staff would often pay out of their own pockets, waiting weeks to be reimbursed – potentially incurring interest charges – only to have submissions queried. The potential for fraud is always there, but scrutinising employees creates resentment. No one likes to feel untrusted, meaning some staff might actively avoid filing minor claims.

Businesses that automate expense management have the opportunity to approach things differently. Pleo conceived its system with the aim of empowering staff to approach spending intelligently, and improve the way companies operate by devolving more decision-making to team members. It has resulted in a positive attitude to frugality, thanks to regular feedback on performance benefits.

“We have moved away from simple cost-cutting,” says Szarek. “What is more important is having flexibility on business decisions and on spend decisions. With Pleo’s cards, these are very much distributed to the employees, who feel empowered as a result. So basically, we don't have centralised procurement, because centralised procurement requires long contracts and long negotiations. With the Pleo way of spending money, we can make decisions on optimising expenses more swiftly. And, with analytics, we can decide very quickly what we do and we don't do in the field.” Zwaan had introduced the software at businesses she’d worked for previously and, each time, she saw the same positive impact. 

“Our staff can make fast decisions, and feel able to do the right thing by the company, while our finance team is in full control over all company spending from a centralised tool. It enables control mechanisms without impacting individual autonomy or culture – which has huge positive shifts for managers and teams.”