Why operating expenses are hurting your bottom line
June 1, 2021
By Adriana Amato
Every business has unavoidable operational expenses that are necessary for making sales and generating revenue. Yet, many organisations lack the appropriate tools to properly understand how their operational budgets are being spent and which expenses can be easily avoided. Lack of visibility is obscuring transactions across expense categories and resulting in excess spending that harms overall profitability. Archaic systems matched with aging physical corporate credit card programs constrain finance teams’ ability to identify where spending occurs.
While many operational expenses are obvious and necessary, from office rent to essential office supplies many more avoidable expenses are hidden in plain sight. Excess operational spending like unnecessary travel and entertainment costs is a significant issue across organisations. However, they remain hidden in broad categories that provide minimal insight into the actual spending that’s happening.
One of the biggest issues faced by businesses across industries is the ability to identify expenses that are leading to growth vs. those that are simply a cost burden. Yet, without the right tools, it is nearly impossible for leaders to understand how their teams are spending operational budgets, nevermind which transactions can be avoided with minimal impact on sales or growth targets.
Shining a spotlight on expenses with smart corporate cards
In the past, existing physical corporate card programs have been responsible for hiding spending on operational expenses through slow access to transaction data and minimal merchant information. When transactions occurred, a slow trickle of transaction data was combined with broad categories that were manually selected by individual team members, as they processed their own expenses. The result was extremely poor quality data that leaders couldn’t depend upon when making critical operational decisions.
Now, smart corporate cards are changing everything for businesses by shining a spotlight on operational expenses. The broad categories of entertainment or travel are no longer sufficient with improved access to data delivering a more granular view of spending. Automated categorisation and merchant data is delivered as soon as transactions occur providing leaders with new levels of visibility. Expense rules can be quickly created to assign specific categories to individual merchants. Senior leadership teams can now easily identify patterns in spending and reduce avoidable expenses.
Faster decisions with total transparency
In 2021, the pace of business is increasing faster than ever before and decisions now need to be made in seconds rather than days. Organisations that can develop a complete understanding of which expenses are operation-critical have an opportunity to secure a unique competitive advantage. Similarly, organisations that fail to properly understand their spending are unable to respond quickly when needed. Total transparency of operational expenses is allowing leaders to understand essential spending at a glance and respond effectively as external market conditions rapidly shift direction. The businesses that have invested in smart corporate card technology can view, understand and control expenses in real-time, while the others will be left behind.
Prevent excess spending before it occurs
Smart corporate cards are changing the way that expenses are managed by allowing finance teams and business owners to define budgets and control spending before expenses are incurred. Unprecedented levels of control are delivered through robust merchant and category selection to ensure alignment with intended spending. For example, funds allocated to a specific category or merchant for the purchase of office furniture cannot be used to purchase grocery items. Industry-leading smart corporate card technology allows finance teams to view purchases in real-time with rich transactional data available as soon as payments occur, rather than after statements arrive.
The abuse of company funds by employees for personal gain continues to create challenges for businesses and not-for-profit organisations alike. Physical corporate card programs lack the technology, features and automation needed to adequately reduce spending risks and monitor purchase history. The visibility provided by smart corporate cards allows spending that falls outside of standard patterns to be identified and addressed long before large liabilities are incurred.
"One of the biggest issues faced by businesses across industries is the ability to identify expenses that are leading to growth vs. those that are simply a cost burden."
Recover thousands of hours with full expense automation
Each month thousands of hours are being lost to cumbersome expense processes that needlessly consume the talent that businesses have hired to complete more important tasks. Finance teams are distracted from their unique role to assist other departments and senior leaders waste hours on manual data entry. Expense processing is the ultimate productivity killer for the entire team.
Smart corporate cards are reversing the expense burden by automating processing and simplifying user interaction. When a payment occurs it can be automatically exported to existing accounting software with smart rules instantly placing the transaction in the appropriate category.
Join the industry leaders using smart corporate cards today
Australia’s fastest-growing businesses have revolutionised their expense processes with smart corporate cards. Book a demo today to understand how Weel can help your team reduce operating expenses and save thousands of hours every month.
Here’s how smart corporate cards are different
- Finance teams or managers create a smart corporate card in seconds with any budget. Funds are restricted to specific categories or merchants, ensuring that spending aligns with the intended purpose and eliminating any potential misuse.
- Once created, smart corporate cards are sent to team members to install on their smartphone instantly - ready for immediate use.
- When a purchase occurs, team members quickly reconcile the transaction on their smartphone in the field.
- Finance teams have complete visibility of transactional data as expenses are incurred, allowing early intervention if necessary.
- Expense data is automatically exported to existing accounting software saving finance teams thousands of hours every month.