In August 2019, Uber made a small, but
– it was spending $200K a year on balloons.
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Even for a large and successful business this figure was pretty shocking.
Their CFO agreed and changed the company’s policy.
But what had actually happened here?
How did a digital-first, data-obsessed company like Uber lose sight of employee spending?
The answer is simple – it fell victim to spending sprawl.
is the result of unchecked, tactical spending
that happens within every business.
spending takes many forms.
– an intern runs out to buy a new laptop or office supplies.
– a CMO pays for an event, books flights or renews a SaaS subscription.
they all have one thing in common. They don’t leave much of a paper trail. There are few contracts and few supplier relationships.
We call this variable spending and it’s an especially big problem for dynamic, rapidly-growing businesses.
More people means more spending. And when you’re focused on growth it’s easy to ignore spending policies and miss things.
Tracking variable spending just falls to the bottom of the collective “to do” list.
But this opens you up to an incredible amount of risk.
Variable spending can account for up to 20% of a typical business’ spending1. That’s a huge chunk of profit potentially draining out of your business.
1. Accenture, Getting a Grip of Tail Spend, 2014
And the profit drain is only part of the problem. When you can’t see what’s been spent, you can’t see:
Opportunities to improve efficiency
Non-compliance with finance regulations
Irritated employees struggling to spend company money or reclaim expenses
There’s an obvious question here – if this is
such a big problem, why aren’t businesses
doing something about it?
traditional spend and expense management systems aren’t designed to track this type of spending.
Powerful procurement platforms track and manage large, regular, conventional purchases.
They don’t account for ad-hoc spending made at the discretion of individuals.
And traditional expense management solutions are more of a hindrance than a help.
You’re always looking backwards and can only see a small part of the whole picture.
In fact, traditional solutions actually create three meaty problems:
Stale data: You have no real-time view of spending.
Asynchronous reach: You’ve got no way to control rogue spending when you do spot it.
Admin overload: You have to manually trawl through bank statements and spend data to gain even a basic understanding of variable spending.
what’s the solution?
The obvious answer is:
You rigorously enforce policies, clamp down on rogue spenders and restrict access to company money.
But too much control can be a bad thing. There’s a reason your people are making all these purchases – they see them as necessary, and most of them will be.
Clamp down on spending and you’re likely to disrupt business operations and damage morale.
The real challenge is to balance control with agility.
You need to empower people across the business to spend, while retaining control.
We call this Variable Spend Management and it makes all kinds of things possible.
Here are the big three benefits:
Greater efficiency – as you can cut down on spend-related admin
Better policies and processes – as you have the insight to refine and improve workflows
Agility – as you can move at the pace of the business and stop looking backwards
You’re not just solving a huge, draining problem for your business, you’re empowering your people to work more productively.
real-time spend data is incredibly valuable.
It can help you make better decisions on everything from budgeting to campaign optimisation.
This is your chance to stop spending sprawl in its tracks and become a more productive, agile and
Download our eBook “Introducing Variable Spend Management” to learn how to get started.Download Now
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