Every day, perhaps without even realizing it, most of us already use embedded finance. From ordering coffee via an app to booking a taxi with our phone, embedded finance has completely transformed the consumer payment process. But many businesses are yet to integrate a financial solution into their own infrastructure, even though this comes with many benefits – both expected and less obvious.

An introduction to embedded finance

Embedded finance comes in many forms. One which I work with every day is spend management automation. Rather than relying on disconnected manual processes, automating spend management allows a business to manage spending and expenses in one system from request to purchase and accounting. This usually means employees spend on physical or virtual cards and capture payment information, like VAT, in an app, instead of paying out of pocket and filling out paper forms. Finance teams can approve requests, view purchases, and manage budgets from a web console. And many spend management systems integrate with accounting software, making it easy to export reports for reconciliation.

Better results in less time

Some of the benefits of embedded finance are more obvious than others. It probably comes as no surprise that scrapping expense forms and petty cash in favor of an app and company cards saves teams time and effort. Not only does this make day-to-day spending easier but it eliminates the month-end crunch that ties up so many finance teams. A recent study conducted for Soldo by
Coleman Parkes Research shows that each year about 2% of company revenue is lost on poor business spending controls, and 30 hours per employee is lost on inefficient manual processes.

Using one system with a web console gives finance teams full visibility over spend across the business in a way that’s not possible with multiple systems that don’t work together. Getting a complete view of what teams are spending means finance teams can budget and plan more effectively. It also gives them a single view of travel expenses, subscriptions, and online ad spend all in one place for better control over cash flow and profit.

As we navigate through uncertain times, it is important that businesses give individuals and teams full flexibility. Imagine being able to buy home-working equipment at short notice or jumping on public transport to meet a client without having to track down a shared corporate card. Spend management automation gives employees the agility they need to thrive in the new normal.

New technology supports faster scaling

A less obvious result of finance automation and integration is the positive effect it has on a business’s ability to scale. When businesses rely on manual approvals processes, teams waste time waiting for new equipment or software, projects get delayed, and work grinds to a halt. Something that no business can afford in the current economic climate.

In contrast, automating spend management means teams can request, approve, purchase, and log payment information in one quick and easy system. This means there’s only one source of truth. And removing the need for manual data entry eliminates mistakes caused by human error. Accurate data means accurate forecasting, which leads to better decisions and improved strategies. Teams are better able to spot trends and make the most of opportunities, and they can identify problems early – not just at the end of a financial period. This all makes faster scaling a reality.

Transforming finance roles and the finance function

When teams aren’t bogged down with repetitive admin or time-consuming processes, they are freed up to focus on tasks that add more value to businesses. While some might worry that introducing new technologies will replace finance jobs altogether, it actually results in a pivot from data handling to more engaging roles focused on reporting and planning.

These changes for individuals also lead to full-scale change within the finance function. No longer seen as simple number crunchers, they can take on a more integrated, cross-functional role to shape business decisions, influence change, and develop strategy.

This also has implications for the role of the CFO, which becomes less about accountancy and more about looking to the future. With the help of richer, real-time insights, they can take on a more influential position within the C-suite. But their role as a team leader also changes. As their teams become more highly skilled, the CFO’s focus shifts to developing talent, fostering collaborative and innovative mindsets, and succession planning.

The positive impact for individuals

Without the burden of data processing, finance roles become more rewarding. But this also means that finance professionals have more time for personal training, mentoring, and development. This is an essential change as we continue to steer a path through The Great Resignation.

The impact of the COVID-19 pandemic is still being understood. But what we do know is that it’s focused attention on employee wellbeing, work-life balance, and business purpose like never before. With skilled workers in high demand, it is essential that organizations offer a brilliant day-to-day experience to keep existing employees and attract new talent. Demanding long working hours at month end, offering only repetitive tasks, and making simple processes frustrating and time-consuming will only turn employees away. Luckily, all of these can be avoided by embedding financial operations.

It’s time to unlock new technologies

Embedded finance, which includes spend management automation, brings expected benefits as processes become quicker and easier. With more visibility and control, teams can get a better grip on their cashflow, maximize profits, and plan more effectively for the future. But it also results in some less-obvious benefits too. Without the admin burden, finance teams can take on a more strategic role, while finance professionals can use their time on more rewarding tasks. This all works to accelerate business growth while also shoring up an organization’s foundations. That’s why, as we look towards a turbulent future, embedded finance is key to gaining a competitive edge.