Spend management software is a must-have for CFO evolution

A variety of forces are forever changing the function of the CFO role – and it’s happening fast, and right now. The increasing complexity of business, the democratization of the C-Suite, and a global pandemic are all factors driving that change. CFOs are trying to keep up, but in many cases they’re not adequately equipped with the tools and support they need. 

 CFO respondents in Pigment’s The State of FP&A 2024 reported:

• “55% of finance leaders lack the visibility into the basic business strategy and data needed to provide strong org-wide strategic guidance.
• 98% of finance leaders are putting off important strategic work due to tasks such as administration, data collection, or reporting.
• 64% of finance leaders feel pressure to evolve their role beyond perceived number crunching and advise on business decisions ahead of time.”

What’s driving the shift to automated spend management?

Traditional expense management practices like manual reconciliation and receipt chasing make it impossible to get an accurate picture of real-time spending. CFOs are stuck reviewing spending after it happens, which can wreak havoc when it comes to complex project- and team-based spending.  

Manual, fragmented processes also consume valuable time and mental energy that CFOs could be dedicating to strategic initiatives. As finance leaders move beyond traditional tasks to provide real-time, proactive guidance, the demand for immediate spending visibility becomes critical.

Another major, competing demand is the current talent shortage in the finance and accounting space. According to the AICPA 2023 Trends Report, bachelor’s degrees in accounting have been declining between 1-3% per year since 2015, with a more dramatic drop of 7.8% from 2021-2022. Bloomberg reports that the U.S. has 340,000 less accountants than 5 years ago. And CFOs are definitely experiencing the effects of this drop: in a poll of 234 CFOs by Gartner, the majority of CFOs reported hiring and retaining employees as their most difficult task.

As finance functions grow in scope and CFOs continue to grapple with talent shortages, leaders need solutions that can scale with their organizations and support long-term, strategic financial planning. And the ability to integrate with existing financial systems (ERPs) is essential for real-time insights and streamlined month-end reconciliation.

In order to make this leap, finance teams need to shed the manual, time-consuming processes of yesterday’s spend management process in favor of automated, integrated spend management software. 

Related: A smarter way to track expenses across multiple construction projects

How spend management software meets CFO objectives

Robust spend management software offers a variety of functions that CFOs and their teams can use to save time, increase productivity, cut costs, stretch corporate funds farther, and gain visibility into the organization’s spending. 

These functions combined can help CFOs and their teams shift time from manual work to strategic business guidance, get creative about reducing spend across the organization, and have confidence in their financial data and recommendations.

Automation and AI alleviate manual workloads

Automated reconciliation, powered by AI and data integration, is becoming central to spend management solutions. By automating repetitive tasks, such as data entry, receipt capture, and report generation, CFOs can save time and reduce error rates, enhancing both operational efficiency and data accuracy for long-term financial decision-making​​​. Offsetting this manual workload also frees up valuable headspace needed for strategic planning.

PEX’s expense management platform offers features such as Receipt Capture, Auto Tagger, and AI-based Receipt Matching, allowing CFOs to put the onus of data entry on the platform. Using PEX’s automation and AI functions, one PEX customer in the logistics and supply chain industry was able to cut receipt chasing by 95%. And according to participants in the PEX Customer Success Webinar 2024, they saved on average 4.01 minutes getting receipts from employees per transaction and 3.47 minutes uploading receipts per transaction.

Related: Why simplifying expense management makes a big impact on cash flow

Visibility increases decision-making capacity and confidence

Modern spend management tools are increasingly favored for their ability to offer CFOs real-time visibility across projects and teams. By reducing reliance on outdated reconciliation practices, integrated tools enable finance leaders to track, control, and analyze spending instantly, helping mitigate overspending risks and ensure financial transparency across departments​​.

PEX’s cardholder purchases are recorded in the platform in real time, and CFOs can run a variety of reports to track spending based on their customized needs. With automated integration to ERPs like Sage Intacct and QuickBooks, CFOs can connect financial data seamlessly and achieve a timely financial close. 

With PEX’s integration to accounting software, Family in Christ Community Church was able to reduce 5 hours of monthly data entry to 20 minutes of data review. And for PEX customer Southwestern Behavioral Healthcare, real-time expense tracking allowed them to monitor employee spending throughout their spend threshold. 

Automated frameworks safeguard compliance and security

For CFOs in industries with strict regulatory demands, spend management software that simplifies compliance is a top priority. Automation tools that categorize expenses accurately aid in aligning transactions with accounting standards, reducing audit risks and improving financial transparency​​. 

PEX’s Auto Tagger function allows finance teams the ability to preprogram expense codes into the platform. Those expense codes or tags will auto-populate based on the merchant and type of transaction, saving time on data entry and limiting the opportunity for errors. And Auto Enforcer allows PEX admins to block corporate card usage until employees submit the required expense details. 

Joshua M., PEX Customer and G2 Reviewer, shared how AutoTagger simplifies his work: “No one asks me for budget codes anymore (they’re autocomplete in the app).” And Kelli M., PEX admin and G2 Reviewer, says that “the best feature of PEX is the Auto Enforcer.”

Customized controls limit employee spending.

Spend management software allows CFOs to set custom spend controls and budget limits for different teams & projects. CFOs can prevent unapproved spending from happening, oversee expenses in real time, and deactivate cards as needed – ensuring that spending aligns with strategic goals​​​.

The advanced approval policies and custom spend rules in the PEX platform enables CFOs to create a series of rules for expense approval and spending. Approval rules can be set per department, purchase type, or tag, and they can also be set to auto-approve. Custom Spend rules can restrict spending by merchant type, day of the week, physical location, or even cardholder group.

According to the PEX 2023 Customer Survey, 60% of customers saved money using spend rules. Sarah C., Director of Administration and G2 Reviewer, shared that PEX is “especially beneficial to limit the types of spending. For example, only spending on fuel or hardware stores.” 

Corporate and virtual cards expand working capital and improve supplier relationships.

Companies are shifting away from viewing working capital as a cash flow stopgap. Instead, they use it strategically to support growth, as evidenced by a 16% rise in working capital’s strategic use in 2024. Virtual cards now play a critical role in improving cash flow management and capturing early payment discounts from suppliers – without straining cash flow​​​. Companies using physical corporate cards or virtual cards for early payments report stronger supplier relationships and better pricing.

Corporate cards allow finance teams to issue and manage digital payments easily, supporting flexible spending without compromising security. 

Johnny Gerant, Finance and Systems Manager for CultureWorks Greater Philadelphia, said “One of the benefits of the virtual [vendor] cards was we can actually group different accounts based on subscriptions and I can easily cancel if something happens so it gave me a lot of control.” 

Related: Why simplifying expense management makes a big impact on cash flow

CFOs must adapt – or be left behind

Historically, the CFO role has been a reactive one – analyzing spend after it happens and chasing receipts and details post-transaction, with little (if any) current or future insight. Today, companies are asking much, much more of their CFOs. Reliance on historical financials is not enough to keep companies afloat, especially in cutthroat industries where margins are low or one compliance mistake can put them out of business. 

Today’s C-suite leaders want strategic recommendations based on what’s happening now, not last month or last year. They need to stop fraudulent spending before it happens – before it’s too late. And they need to get creative about leveraging different sources of capital to stretch their cash flow dollars farther.

PEX’s spend management platform supports CFOs as they adapt to the emerging needs of the C-Suite. By transferring manual workloads to automated processes, creating rigid, pre-programmed frameworks to control spend, enabling real-time visibility into org-wide spending, and offering flexibility in working capital and how to spend, PEX helps CFOs make the transition from number cruncher to business advisor.

Want to learn how PEX can help transform your company’s spend management practices? Contact us today for a customized demo.