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The employee-centric way to manage procurement spend

More usability coupled with customizable controls leads to increased compliance.

headshot photo of Milo Spirig

Milo Spirig

·

8 min read

8 min read


The employee-centric way to manage procurement spend

More usability coupled with customizable controls leads to increased compliance.

Payables-meta-data-image-1
Payables-meta-data-image-1

Why the employee experience matters.

Brex has disrupted the spend management category because we offer the first employee-centric, consumer-grade platform that enables businesses to manage all of their spend — from travel and expenses (T&E) to stipends to procurement — in one place.

Brex’s platform not only improves how businesses manage global spend, it’s loved by employees and controllers. We added new functionality to our platform to bring that same control and usability to procurement spend because of its significance within an organization.

After salary and benefits, procurement spend is typically the largest budget category for a business, and reining in out-of-control procurement spend must be a top priority. Things like runaway SaaS licensing, ghost invoices, and mountains of unexpected reimbursement requests represent spending that accounting teams hadn’t planned for, which further complicates the lives of accounts payable (AP) managers.

To prevent this, finance teams typically want more control over how employees spend. Traditional procurement spend solutions, however, go all in on the controls while sacrificing usability. Many even require a purchase order (PO) to ensure employees adhere to company policy.

But procurement spend typically involves a lot of infrequent, ad-hoc purchases for most users, and the PO process isn’t always ideal. Plus, did you know that on average, it takes 4.8 business days for a PO to be submitted and approved?

Taking nearly an entire workweek to basically get permission to make a purchase is problematic. It can slow the acquisition of business-critical needs — additional software seats, office supplies, company gifts, and more — which leads to lost sales and revenue. Such delays happen when employees are forced to use cumbersome products designed to inhibit spend rather than enable the right kind of spend.

Purchase cards (p-cards) solve this problem for modern businesses.

But even most corporate purchase card solutions, which are supposed to be more employee-friendly, were built around experiences that finance teams will love. At Brex, we started with an experience that employees will love. While different, each approach is ultimately designed to achieve the same goal — compliance.

With Brex payables, our automated AP software, we are the first to design a better, faster way to enable procurement spend through p-cards and bill pay software. Brex payables modernizes how orgs pay for and track procurement-related spend, whether teams are paying invoices or using p-cards for smaller operational spend. The goal is to reduce unnecessary obstacles to procurement purchases and empower employees everywhere to make the best financial decisions.

Read on to learn more about how we designed Brex payables to align with how organizations really want to manage their procurement spend, and the meaningful impact this provides to employees, finance teams, and the overall business.

Finance leaders want to put procurement spend on a card.

Procurement spend typically accounts for more than half of a company’s non-payroll budget. Even incremental improvements to this type of spending can directly impact the profitability and financial health of your company.

A 2023 survey we did with 300 midmarket CFOs, controllers, and finance leaders put the average spend for recurring vendor invoices at more than $300,000 a year. When asked about their preference for managing that spend, 47% of decision-makers prefer to pay those invoices from a corporate bank account. But 53% prefer to pay those invoices by credit card, for several reasons:

  • 31% say because it’s more secure. Card networks typically offer cardholders protection against fraud, and cards can easily be deactivated quickly to minimize the impact of unauthorized use.)

  • 25% say they want to earn rewards. It’s nice to get some return on the money you already spend.

  • 22% say card payments are faster. PO processes typically involve several approvals and are time-consuming.

  • 21% say it’s convenient. Every employee knows how to use a credit card.

What was really interesting was that 71% of respondents say they would be likely or very likely to issue corporate cards to employees if they had AP card controls or per-transaction spend limits. In short, these decision-makers are asking for more control over p-card spend before it happens.

They want to offer employees more convenient ways to make procurement purchases. There just hasn’t been a viable solution. So we set out to help finance teams do that in a way that works for both the employees doing the spending and the accounting teams doing the reconciling.

So how do advanced AP controls lead to a better employee experience for procurement spend? By enabling employees to freely — but also compliantly — spend.

Payables-blog-post-inline-image
Payables-blog-post-inline-image

A better employee experience = improved compliance.

We’ve seen through our own platform usage that when it comes to T&E spend, employee usability drives greater compliance. So we asked: Can a more user-centric process drive additional control and compliance for procurement spend?

Employees and finance teams have differing relationships with spend. Employees care little about the nuances around business spend — the type, which budget it comes from, or whose card. They are primarily concerned with what they need to spend on to solve a business problem. Or even that they can purchase those things in the first place.

But accounting’s job is all about making the numbers add up, and they need to know a lot more — who spent that money and where they spent it. Additionally, they need to know whether it was within budget and policy and whether it has the proper approvals and documentation.

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Payables-blog-post-inline-image-2

They typically solve this by purchasing separate solutions for each function — corporate card and expense management programs for T&E and procurement products for bill pay and p-cards. Many even bring in additional vendors just to tackle the request for payments and automate approvals.

However, sending employees to different products — one solution for travel booking, one for expense management, one for procurement spend, etc. — is the opposite of “employee-first.” This is how companies end up with five best-of-breed tools (travel, expenses, corporate cards, bill pay, planning) and employees have to learn how to use each of them to get anything done.

We took the opposite approach.

Modern organizations need advanced AP spend controls, multi-level approvals, invoice support, and automation. So we built all of that out for procurement spend on our unified platform, using a single software-backed card offering that simplifies the experience for finance teams and employees.

With Brex's new AP card controls:

  • Employees can request purchase cards for anything from recurring SaaS subscriptions or the upcoming holiday party.

  • AP teams can issue those cards and control spending with vendor, category, and per-transaction controls that only allow for pre-approved spending.

  • Finance teams can manage recurring and ad-hoc procurement spend together with T&E on the same platform.

This means any card — physical, virtual, or vendor-specific — can handle high spend volumes that typically happen outside T&E, accounting teams can issue p-cards without worry, and organizations can simplify how they manage all of their spend in one place.

It’s one solution for your entire company, with customizable controls and workflows for everyone, including travel managers, accounts payable, controllers, and employees who spend for their jobs. It’s also what decision-makers are asking for.

Control and usability in a single solution.

Companies really want a consolidated solution for T&E and procurement. In fact, they already treat current solutions this way.

A July 2022 market research survey, conducted in partnership with Qualtrics, of 398 mid-market decision-makers told us a lot about their spend habits. About 80% of companies with more than 200 employees use the same credit card for procurement and T&E spend. Additionally, 72% of companies with 500-plus employees said they prefer a bundled procurement and T&E solution.

Our own customers historically have told us that there just hasn’t been that single best-in-class tool for both procurement and T&E. That stems from the fact that the stakeholders are different. Whereas T&E is distributed across an organization, only a handful of employees need access to procurement tools.

So while it seems counterintuitive to take an employee-first approach since so few employees need to manage procurement, making the employee process for procurement spend just as easy as T&E spend vastly simplifies the work for accounting teams.

Through the power of Brex’s single-platform approach, finally track and manage T&E and procurement spend in one solution so it works for employees AND accounting. AP teams get the same controls they demand and employees get a user-friendly solution that controls procurement spend as easily as T&E spend.

Payables-Desktop-blog
Payables-Desktop-blog

Impact is all in the approach.

A lot of vendors can sell you a procurement solution with countless control mechanisms, but if your employees are skirting traditional processes because there’s too much red tape, the controls won’t matter. Brex’s employee-first approach to spend drives adoption, improves automation, increases compliance, and reduces the time needed to close the books.

So far, our approach seems to be working.

“We’ve seen a huge shift in accounts payable from being a back-office data entry function to a powerhouse of information that creates a decision maker and stakeholder,” says Tiffany Miller, Director of Accounts Payable at Empire Portfolio Group.

“I personally love how easy it is to close out expenses by Slack or text,” says Candice Chow-Gamboa, Chief of Staff at Heirloom, a direct air capture company that strives to permanently remove CO2 at a billion-ton scale. “We’ve seen the employee compliance rate skyrocket to 96% percent with Brex.”

And Sean Soper, Head of Accounting and Financial Operations at web3 developer platform Alchemy, says: “[Brex's] unified spend management is our version of procure-to-pay 2.0. It's a very modern way of running virtual cards, p-cards, bills, invoices — everything in aggregate within a centralized platform.”

“We’ve seen a huge shift in accounts payable from being a back-office data entry function to a powerhouse of information that creates a decision maker and stakeholder.”

— Tiffany Miller, Director of Accounts Payable, Empire Portfolio Group

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