How to manage company spending for remote teams
Published on March 17, 2020
The first things that newly remote companies think about is the software setup. Can you connect easily to one another?
You rush out and install Zoom, Skype, Slack, Slite, Notion, and any other platform that lets you decentralize work. Which is exactly the right move! Meetings, project management, and team communication are all completely different for distributed teams.
But too many companies skip over the less glamorous stuff. Video conferencing is great, but can you process invoices from anywhere? Can your team members book a flight or pay for their Salesforce subscription?
For a lot of businesses, financial processes are the last to be updated. Which might be fine if the company still operates like the internet never happened.
But once you’re dealing with remote teams, you can’t afford to keep things old school. Employees need the freedom to spend if they’re going to be effective.
So how can you keep control and visibility while also completely decentralizing spending? Just keep reading.
Common challenges for remote teams
The most common issues with going remote are fairly predictable. When you’re not in the same room with your team, all your daily habits become a little more complicated.
You can’t simply turn to the person next to you to ask that little question. You can’t walk into a room full of people and get their opinions. Both for managers and their teams, tasks need to be done more deliberately and more mindfully.
According to Hubstaff, the five biggest challenges when managing distributed teams are:
Language and cultural barriers
Tracking remote employee performance
A lack of trust and cohesion
And interestingly, we see all these same challenges (and more) when it comes to spending.
The biggest issues with traditional company spending are heightened for remote teams. Slow processes, face-to-face communication and a reliance on physical company cards just won’t cut it when you’re not in the same room with one another.
So let’s explore better ways to deal with your classic spending processes. Whether you’re already fully remote or heading that way in a hurry, you can still keep moving quickly and do your best work without compromising on security.
How to handle spending with remote teams
The number one enabler for remote teams is technology. We’ve left the days of telegrams and fax machines behind. Even email is now more of an external communication channel than an efficient way to reach your team.
And modern payment methods make company spending from afar just as easy as in-person. Here’s what you need to know to keep operational spending simple and dynamic for your remote team.
Having a robust way for all team members to pay online is probably the single best step you can take. They need to be able to subscribe to tools, buy office supplies, and book travel to head office (or elsewhere) from time to time.
But remote employees don’t have the luxury of wandering over to a manager to ask for a credit card. When it’s time to pay for that new computer monitor or online training session, how will they actually do so?
This is when virtual credit cards are indispensable. These offer a smart and secure way to pay for things online, no matter where in the world your employees may be.
Good virtual cards work as either one-off payments or recurring subscriptions. One-off cards can literally only be used for a single payment. Once the payment is executed, the card details are useless.
Subscription cards are used for recurring payments with the same supplier for the same purpose.
Either way, each payment has its own, unique card details. The cards are created for the specific payment in question, and can’t be used anywhere else. Which makes them far safer than using your classic company card all over the web.
How this works
A team member finds the flight, subscription, or other purchase they want to make.
They request a virtual card from their manager through the platform.
The manager is notified by email, Slack, or in-app, can see the payment request and supporting information, and can approve the purchase.
The team member pays, and attaches their invoice or receipt to the exact payment within the app.
At reconciliation time, the finance team has every payment, approval, and receipt all in one place, and can easily push them to the company’s accounting tools.
We’ll see shortly how asynchronous communication and automated approvals are so valuable to remote teams. In the above scenario, there’s no email chain or series of awkward conversations. Everybody has the information they need and can play their part when it suits them best.
Any company that relies on physical company credit cards is going to really struggle when going remote. Because most likely, you can’t give every remote employee their own card.
Which means that when remote team members need access to funds on the go, they’re out of luck. They’re going to have to pay with their own money and file expense reports, which is and always will be a bad outcome.
We’ll explore your options for smarter expense claims shortly. But is there a way to give every employee a company card without being terrified of what might happen?
Actually, yes. There are now smart, secure company cards that keep let companies put individual limits on each card, restrict the kinds of things employees can spend on, and that track every single payment in real time.
Spendesk debit cards are a good example. Here’s how they work:
Every remote employee is issued a card.
The cards have one-off, weekly, and/or monthly limits. And any payment above that limit needs approval from a manager (the manager is notified and can approve immediately through the app).
If the employee is travelling or out with a client, they pay with their card just like a normal credit card.
They take a photo of their receipt and match it to the payment within the app. Because they do this immediately, receipts almost never get lost.
Managers and finance teams can see in real time what’s being spent, and can freeze cards if necessary.
Most importantly, these cards are not connected to the company’s main bank account - instead they draw from a limited pool of funds. So there’s no risk of employees making colossal mistakes on the company dime.
So what if you aren’t ready for physical cards for every employee? Or perhaps you are, but are waiting for the cards to arrive.
Employees can still spend their own money as they did before. But we still would never advise relying on the outdated expense report process your teams know and hate.
Once again, technology has made paper expense claims an unnecessarily slow and tedious option. They force employees to wait long periods out of pocket, and offer absolutely no visibility to finance teams.
Instead, opt for expense automation. This digitizes the previously painful task of filling out Excel sheets, sending them by email, and waiting sometimes months to be reimbursed.
How this works:
A team member uses their own money for a business expense.
They immediately log their payment in the expense tracker app, and take a photo of their receipt.
Their manager receives a notification and can directly approve the payment, ask for more information, or refuse it.
Once approved, the payment details, approval, and receipt are passed to the finance team. They can choose to deal with it immediately, or wait until their regular expense processing timeslot.
The employee, manager, and financial controller can always see how payments are progressing and whether any information is missing. So there’s no need for extra communication back and forth.
Note: With Spendesk, the finance team can even reimburse employees directly from the platform. Which means expenses don’t become muddled up with payroll, and reimbursements can be made on their own schedule.
And all of these steps happen within the same platform. Meaning all information is available in one place, documents rarely get lost, and finance teams know how much has been spent in real time.
Invoices are another common way of spending - even if they aren’t normally thought of in the same breath as credit cards and expense reports.
If you don’t yet have a full-scale procurement team, the people who handle invoices first are frontline staff. For instance, your marketing team might find a freelancer to design some new materials. They know who they want and they have their budget, so it makes sense for them to deal with this transaction.
But once the freelancer has sent in an invoice, how does the marketing team handle it? Typically, they’d forward it to the finance team who then have to make sure it’s legitimate, arrange for payment, and manually enter all of the invoice details into their system.
And this whole process - once again - requires a lot of back-and-forth communication.
But with invoice automation tools like Spendesk, the process is simple.
How it works:
The frontline staff member uploads the invoice into the system.
The tool extracts all the details automatically.
The employee verifies that the system matches the invoice.
The finance team simply has to approve it for payment.
What would normally require an email chain and potentially lengthy waiting times can be done in seconds.
Principles for successful remote spending
Those were four modern spending processes you should have in place for remote spending. And when you’re setting them up, here are a few guiding principles to make them as a success.
We’ve already mentioned several times that the first thing that could potentially suffer is team communication. And while you may not consider communication as the most important aspect of company spending, it is in fact crucial.
Think about the amount of back-and-forth communication that occurs during a simple payment at work - approvals from managers, receipt requests from finance teams, and the often physical process of sharing credit card details.
All of that becomes a huge burden when you’re not in the same space. Which is why you need spending processes that don’t rely on managers and finance being on call for employees to spend.
Automated approval workflows
While we’re talking about communication, here’s a question to consider: does every single payment need to be studied before it can go through?
The fact is, most smaller work purchases are pretty mundane. You don’t need managers to look through them all, especially when they’re below a certain amount.
Automated approvals let employees spend immediately if the amount is below a pre-set limit, and if the type of payment is pre-approved. A coffee with a client might meet this threshold, while a flight or inter-city train probably won’t.
You should be able to set these terms - and update them - whenever you like. And reducing the unnecessary communication between remote team members keeps the company moving smoothly.
Real-time spend tracking
This is a lifesaver for finance teams. Not because you can’t trust remote team members, but because you have less ad hoc visibility over other team members. You can no longer control spending with your eyes and ears.
A spend management platform with all your payment methods attached is just what you need. Whenever a team member submits an invoice or makes an expense claim, you know right away.
Which means you can see outgoing expenses even before the money leaves your bank account. This lets you stay on top of budgets effectively, and ensure that everyone’s following the rules before it’s too late to stop them.
The key to good remote work is the right tools
As we’ve seen, all you really need to have a great remote spend culture is good technology. There’s no reason to stick with old fashioned, paper-based expense processes, and tired company credit cards.
In fact, that makes sense whether or not you have remote teams. A healthy spend culture will grow, scale, and work from anywhere.
You can set this up today, and you’ll be able to go fully remote at the drop of a hat without missing a trick. You won’t need any new training, updated processes, or frankly any change to your spend processes.
Which is a wonderful way to future-proof the company and keep your precious funds safe.