Over the past few decades, spending management has developed and changed. Just ten years ago, keeping track of business expenses and reconciling them was “unbelievably manual,” according to John Young, CPA at Airbase.
The accounting department, which often oversaw such procedures, set workflows that the rest of the staff did not necessarily adhere to.
Accounting was always a concept that came up post-factum, according to Young. Making real-time decisions has been challenging since firms “experienced delayed closing due to a lack of understanding into the corporate’s financial situation.”
They are destroying silos.
According to Young, “These technologies were created to address pre-existing practices.”
However, accounting teams have started to adopt a more holistic approach to procedures in recent years, especially as the pandemic progressed, and have improved their comprehension of how staff members may categorize and label their expenditures (sometimes automatically) to achieve higher compliance.
Optical character recognition (OCR), one of the technologies that help automate these processes, has made great strides recently. This has a positive impact on the initial phases of data entry and processing. Not long ago, it had a 20% success rate when “reading” data.
Virtual Cards’ Ascendant
A consistent, unified view of where invoices, payments, and expenses “are” at any given time replaces the 30-day closure procedure as a consequence.
The introduction of virtual cards has revealed a fundamental shift in spend management where eCommerce may be automated because personnel no longer need to carry plastic cards and punch numbers on a checkout page.
But Young thinks that some education will be needed to properly integrate virtual cards into the industry because physical cards have historically dominated. And certain “authorized policies” may be embedded into such cards to highlight their advantages.
