The rich stay rich, and get richer, not by increasing their income, but by controlling their expenses. Spend management might not be an obvious option but it’s always worthwhile.
Thejo Kote calls it like it is: companies have a problem managing their spend. Too many systems, usage-to-spend ratio misalignment, inefficient use of tools: it’s overwhelming. Fortunately for us, his first-hand experience inspired him to found Airbase.
Make spend management a thing
Thejo realized that spend management only received attention ‘when there’s a gap’ in executives’ schedules. By then it’s too late and a business may have haemorrhaged out ghastly amounts in non-payroll spend.
Using Airbase is a direct way to prevent this, or address it if it does happen. Airbase is that software-like finger on the pulse of your company’s end-to-end spend.
There’s no excuse for avoiding spend management, going forward.
AP, expense and spend management: same, same, but different.
Thejo knows that terms are used interchangeably so he makes it easier for us to understand the differences:
AP systems typically manage invoices, approvals thereof, and subsequent payments.
Expense management systems are devoted to managing employee reimbursements.
A spend management system, like Airbase, incorporates both of the other systems. Regardless of where or when the spend occurs, it’s visible and therefore valuable.
“Spend management brings together every non-payroll dollar and the experience around how that money is spent.” — Thejo Kote
How Airbase enables better spend management
Every business has a spending cycle of sorts: funds are requested for various purposes, run through approvals then spent and accounted for. Even staff expense claims can’t escape the preceding approval process.
Now consider the entire business: several departments running a multitude of systems, spending money everywhere from marketing budgets to office stationery. If you had to visualize those transactions, you’d have a fractal with your business at the nucleus, and this isn’t even yet considering all the payment methods which branch out even further.
Airbase keeps every branch of the fractal connected, giving you true sight into your company’s spend. Why does this matter?
- You can switch out stand-alone products and plans for bundled services.
- You can integrate, automate and reallocate resources between processes.
- You can draw a direct link between a change in spend patterns and business profitability.
Does Airbase complement or replace existing systems?
Customers decide, and that’s what makes this such a flexible solution. More than 50% of Airbase customers use the end-to-end solution, but there’s a choice of elements to start with.
“Nobody’s gonna move if you can’t deliver a complete replacement for all of the features and workloads that they need and depend on.” — Thejo Kote
Why is payroll spend excluded?
Don’t fix what isn’t broken, right?
Payroll isn’t where spend management pain originates. Remember, Thejo’s been through this so he can relate to customers directly. Since payroll is a well-cared-for niche, it doesn’t need to be fiddled with anymore.
The spend management marketplace
Every company spends money. By default, the spend management marketplace happens to be the entire economy. Airbase segments it by business scale, working with mid-market businesses because:
- They’re nimble and quick enough with adoption and implementation.
- They require less effort to move the needle by the same amount as for an enterprise: more intense results in less time.
Every product release adds another set of moving parts to the spend cycle of every business involved, making consolidation more beneficial but also more necessary.
Having worked hard at educating the market about spend management, the reward for Thejo is that it’s now a more commonly used term and a better-understood concept. More people are joining the conversation and the marketplace and there seems to be a healthy future in store for it.
The spend management identity crisis
Where does spend management fall: finance or software? Both are integrated from an Airbase perspective, but Thejo’s view has always been predominantly from the software viewpoint. It provides a completely different lens and approach to solving customer problems — in a good way.
Airbase customers are known to reject certain credit products from their FSPs in favor of other products that fit into their use of the Airbase system. Now that’s what you call influence.
They’re adapting for what makes their clients more efficient and cost-effective. It’s a graceful dance between two schools of thought that are evolving constantly as we all progress into a new era of business.
The further along we move, the more consolidation Thejo believes we will see, be it through M&As or new entrants to the market changing the way that things are done.
Until next time!
Listening on a desktop & can’t see the links? Just search for Payments Innovation in your favorite podcast player.