Controllers Council recently held a roundtable panel discussion entitled Smarter Spend Management for Lean Finance Teams, sponsored by RAMP.
Our expert panelists were Nwokedi Mbanugo, Global Controller at TALESCALE, and Audrey Carrol, Senior Accounting Manager at RAMP.
Following are key takeaways to this discussion. If you are interested in learning more, view the full webinar archive video here.
Question: What role(s) or function manages spend and expense management in your F&A department, and how does this function interact with other departments in the company?
Audrey: Our AP specialists are handling everything from vendor onboarding, processing vendor invoices, reviewing all our over 1,200 employee ⁓ credit card transactions and reimbursements, ultimately ensuring that all our payments are made accurately and on time. And then that role communicates with department leaders across the business just to make sure that invoices and other expenses are coded to the appropriate departments and are ultimately being coded to the correct budgets. That kind of leads into our FP&A team where they oversee our budgeting and forecasting. So, they’re also working with those department leaders to understand what each of those teams, what their spending needs are for the year and are creating realistic budgets. And then my accounting team, we work closely with them to monitor those the actual expenses versus the budgeted expenses just to control overspending, under spending, ultimately just making sure we’re aligning with the strategic goals.
Question: What are your spend and expense processes or workflows?
Nwokedi: All of our bills flow through AP, which is my preference because it allows us to keep better tabs on what the expenses are. After the bills come into AP, we get them uploaded into RAMP and get a manager approval. Once the manager approves, either myself or one of the accounting managers, we’ll send out payment via RAMP. So straightforward process, which is one of the reasons why we switched to RAMP. It gives us better visibility and gives managers visibility into what they’re spending monthly versus just relying on previous approvals or contracts that we know need to be paid. We have not moved over our reimbursement process over to RAMP yet, but right now, we use Expensify for all expense reimbursements.
Audrey: I kind of like to view things as a pre-spend control and in a post-spend control. Our pre-spend controls, I’ll talk specifically about the credit cards, we allow all of our employees at RAMP to have these RAMP virtual and physical cards. And so one thing that we can do to really monitor and kind of limit what employees are spending on, such as setting a dollar limit, allow certain merchants or categories to be approved or blocked, or certain time periods on the card. Every transaction that’s been used on the cards, our RAMP system is automating those expenses or auditing those expenses for compliance and automatically flagging any out of policy transaction. We don’t have to spend time reviewing every single employee card transaction. We can just kind of spend the time looking at the ones that the system flagged as non-compliant to our policy. And the managers get notified of us as admins get notified. So, it really helps us save a lot of time just focusing on the items that are requiring a little bit more attention.
Question: Does your organization automate or use automation or AI for spend and expense management?
Audrey: One is issuing corporate credit cards to our employees, which eliminates employees from needing to use their personal card and creating an expense report to get reimbursed. These credit cards will create transactions that go directly into our system. Also, we use text receipts, where we can take a picture of that receipt, text it to RAMP and RAMP can automatically assign it to the appropriate transaction in my in my record.
Then something that’s cool with the vendor management section like kind of that AP world is that we send automated requests anytime we upload a new vendor in the system so that they can enter their own bank account and tax information directly in the system. The system also is quick with notifying us if there’s any potential duplicated invoices.
Nwokedi: Two of my favorite features as it relates to RAMP is the receipts app and the categorization of spend. I just like that automated part of the RAMP process so that we don’t have to do that or review those expenses monthly. I remember a time in accounting where we did have to do that monthly and automating these processes that I’m talking about right now was just a dream
Question: Do you have established policies for spend and expense, and how are policies managed?
Audrey: We have documented in very detailed policies across multiple types of spend, know, employee travel spends, requesting new vendors or contractors spend. We maintain all these documents in kind of like our internal company library, but we can also upload and do upload, you know, especially the travel policy into the RAMP platform; employees are required to sign off any new employee. And then anytime we make a change to the policy, employees are required to let us know that they’ve read it, they understand it, and ultimately sign off on it. Then we have configured our expense management system to know our policy and be able to automate when transactions are not in accordance with the policy.
Nwokedi: We do have established policy, but we try not to be so rigid with expense policies because things do happen. Sometimes you go a little bit over. I think since the review process is quite manual for me right now that I’m able to give thresholds. Within a certain threshold, if I don’t see it as a big deal, I’ll go ahead and approve it. If it’s out of policy and it’s over my threshold, I reach out to the employee, make sure their manager is aware.
I’ll add one more point kind of less away from employee spend and a little bit more on the business spend is buying a new software subscription or contractors that are needed. Our policy is that a purchase order is created, requested and approved before the service is started.
Question: How will spend and expense evolve in the next 3 years?
To view our panel answers to this question and more, view the full webinar here.
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