- Author: Damon Hauenstein, CFO | Weel (Previously DiviPay)
- Posted: October 26, 2022
Why company spending is everyone’s responsibility
Giving everyone, from the new intern to the CEO, the freedom to make purchasing decisions makes good business sense.
That doesn’t mean relying on your team’s goodwill. Finance is ultimately responsible for monitoring expenses and ensuring teams stick to their budgets. But spending all your time approving granular, individual finance requests doesn’t prevent irresponsible spending from happening in the first place – proper systems to implement guardrails do.
Creating a culture of ownership
So, instead of thinking about how the business will tackle irresponsible, out-of-policy spending, CFOs must first help their teams understand why they should treat company dollars with care.
Firstly, something that has been really effective for us is taking the time to explain your business model and company goals with the wider team. When we did this at Weel, the feedback we got from our teams was overwhelmingly positive. They were more in tune with our daily operations and how the business was performing—and much more likely to think twice about their spending. The finance team won’t have to push an edict, and your bottom line will be better off.
Don’t think a culture of ownership works in practical terms? Consider the old way of doing things, where employees either ask for permission to use the company credit card or for forgiveness for doing the wrong thing.
If a business has only a small group of people who can spend money, employees have to go to those who review the request, submit a purchase order request and follow up with them just to make sure it’s been paid. It’s often a cumbersome and time-consuming process.
Finding systems that scale
Naturally, as any business grows, you bring in more team members and widen the scope of trust. You start to spend less time in the weeds on every project or expense.
A key theme that comes out of our conversations with customers is that, in smaller businesses, the finance systems are probably more nascent, so things are done on-the-fly to keep the business agile in the early days.
But over time, that risk starts to increase. Because everything is ad hoc, you don’t have the discipline and controls to promote a healthy spending and savings culture.
We often have customers come to us who are looking for a solution. They might have had an expense that slipped through the keeper or had a particular incident where there was a rogue transaction or something that pushed into a grey area.
Thankfully, there are plenty of modern tools, like Weel, that enable employees to use their own virtual company card to pay for things like coffee, travel, team social events and subscriptions.
The problem with credit card sharing
But when we spoke to other small and medium-sized businesses in Australia outside our customer base, we found that many don’t trust their employees with a corporate card or expense allowances.
It’s no wonder. We still get business owners coming to us using their personal credit card for expenses. Often they’ll keep photocopies of the card to share around the office, which can quickly become an administrative nightmare. And should a fraudster get hold of the details, the card has to be reissued, and every payment and subscription linked to this card collapses.
The smart solution to spending
Our founders Daniel Kniaz and Russell Martin built Weel to address this level of mistrust and help keep businesses moving at the same time. Our platform allows finance teams to issue virtual cards to employees instantly and set more granular controls, budgets and reporting workflows. It’s a more sophisticated solution to shared spending responsibility: one that addresses control, visibility and fraud concerns associated with traditional credit cards.
Since launching in 2017, our company has experienced rapid growth and has processed over $250 million in transactions and attracted thousands of paying customers.
We cover payments out of the business: Think instant virtual cards, bill and subscription payments, spend controls and budgeting, a real-time transaction feed and powerful accounting integrations.
From the employee’s perspective, the platform makes it easy because purchasing can happen on the go. From the finance team’s perspective, it’s fully digital, so there’s no need to deal with paper receipts. It also synchronises with accounting platforms like Xero, QuickBooks and MYOB, so all the information is fed into the systems.
Finding the spending and saving ‘sweet spot’
When you have robust controls in place, like card rules that restrict specific merchants, spending categories and weekly or monthly allowances, trusting employees with company funds becomes easy. It’s about finding balance and identifying a ‘sweet spot’ that enables you and your teams to get on with things.
At the end of the day, there’s no way a CFO can be across every decision and every dollar that goes out the door. But CFOs can help nurture a strong culture of empowerment and responsibility that keeps spending and cost-reduction on the right track.