Opportunities in Spending: Three Key Topics from the “Beyond the Norm: Building Loyalty with Expense Management and Corporate Cards” Webinar
Recently, Torpago joined Marqeta for a webinar titled “Beyond the Norm: Building Loyalty with Expense Management and Corporate Cards.” During the one-hour session, the panel discussed the state of spend and expense management, opportunities for new companies, and each company’s respective product offerings.
Here’s a look at three of the main topics discussed by the panel members about opportunities in the spaces of spend management and corporate cards.
The current state of spend management
The panel agreed that the current economic climate has led to significant changes in how businesses manage spending. The shift to remote work, increased scrutiny on spending, and supply chain disruptions have created a challenging environment for finance and business owners.
Traditional checks are no longer feasible due to remote work, necessitating efficient online systems with rich data sets for quick approvals. At the same time, access to capital has become more difficult, leading to increased scrutiny of all forms of company expenditure.
This focus on profitability has resulted in more complex processes and increased documentation for every dollar spent, with businesses entering "survive now" mode, tightening budgets and scrutinizing their financials more closely. However, reductions in staff and more complicated organizational structures have created a perfect storm where businesses need more staffing to execute this heightened level of scrutiny properly and are thus looking for solutions to a multitude of problems.
Lack of a “one-size-fits-all” solution
Unfortunately for these companies, particularly SMBs, while there are many spend management solution providers, there is no one-size-fits-all solution. The market is saturated with platforms that only solve part of the puzzle, leaving significant gaps in coverage.
Further complicating matters, using various software systems has led to data silos, resulting in more manual work for already stretched accounting teams. In essence, they seek comprehensive, efficient solutions that can handle their complex needs, but are currently faced with fragmented and time-consuming options.
Challenges maintaining the appropriate level of friction
The panel emphasized the importance of maintaining a balance in friction. If a solution is too complicated, employees might opt to use their personal cards instead, resulting in lost data and control for the company.
Limitations inherent to many legacy providers, such as inflexible, one-size-fits-all policies, add to the difficulty of controlling spend. These policies often don't account for the different spending needs of various roles within the company. Additionally, obtaining custom reports from these providers can be slow, leading to reconciliation issues.
Opportunities for new products
The limitations and challenges of many of the existing solutions on the market provide an opportunity for entrepreneurs to develop new products that improve the spend management experience. The panel looked at opportunities from both the administrative side as well as from the employee side.
From the administrative side, there are three key opportunities. First, providing solutions that align with diverse spending policies. Secondly, enabling ease in adjusting these policies over time. Third, providing real-time insights that make it easy to enforce these policies and can help monitor spend upfront without the need for constant internal audits.
Additionally, existing solution providers can better serve their customers by adding payment functionality to their products, particularly if they serve niches with less-sophisticated financial infrastructure.
On the user side, the big opportunity is rolling out a card-based program with built-in spend controls. This approach reduces friction and alleviates the financial burden on employees who might struggle to cover out-of-pocket business expenses. Modern employees, particularly Gen Z, are less inclined to front costs for their employers. Providing them with a company credit card gives them the freedom to manage their finances without tying personal expenses to their employer.
Advantages of leveraging virtual cards and digital wallets
The panel also discussed how virtual cards and digital wallets like Apple Pay and Google Wallet have improved the corporate card experience, particularly for SMBs.
Virtual cards are a handy tool for recurring charges or business-level transactions such as large inventory orders or SaaS subscriptions. Executives no longer have to fret over reaching their limit due to other expenses, making these cards a convenient "set and forget" solution.
And when combined with a digital wallet, virtual cards allow users to start spending within minutes of approval without waiting for a physical card, as digital wallets are not just limited to online purchases but can also be used in brick-and-mortar locations with contactless payment facilities. They offer immediate purchasing power to employees and serve as an excellent solution when someone is in a bind (for example, they left their card at home during a business trip).
Level up your spend management and credit card program with Torpago
We created Torpago to address many of the challenges discussed by the panel – and to help businesses take advantage of modern technology, such as virtual cards and digital wallets. With flexible spend policy rules, robust spend controls, reimbursement processing hundreds of integrations, and an easy-to-manage credit card program that includes physical and virtual cards, Torpago helps startups and small businesses get the most out of their financial teams. Request a demo today to learn more about our platform and how it can help your business improve spend management and enable employee spending.