Welcome to #BasBites – your source for bite-size finance and procurement info for your busy life. This blog tackles a war that’s been raging since the beginning of business – the battle between finance and marketing over spend compliance.
I’m in marketing and all too familiar with this epic battle. Just writing it makes me cringe, BUT WHY? Marketers are some of the most creative spenders I know – they constantly live in a world of “not enough” and often do make gold out of a pile of…
So – why the issue? I believe there are two reasons:
Marketing operates so differently from other departments that it’s difficult for finance to understand why marketing can’t just follow processes like everyone else – even if the processes exist in an e-procurement solution that does not effectively get the marketers what they need quickly to do their jobs.
Visibility of return on spend is very difficult for many organizations, especially when dealing with long complex buying processes. We’ve seen a lot of organizations try to tackle the second challenge. Even at Basware, we’ve implemented processes for campaign code creation, naming conventions, tracking URLs, tech stacks and even campaign attribution systems to show the value of our marketing spend. But the fact remains the same – the buying processes within e-procurement solutions must fit with the way marketers (and other departments) already work, or finance will continue to struggle with non-compliant marketers and that return on spend will never be completely visible or accurate.
Marketing is often many small purchases spread out across many vendors (the long tail of the supply chain) that require varying payment terms from due on receipt to NET 30 and so on. Vendors are often used just once, especially when you’re dealing with marketing departments that do a lot of events. Additionally, there are regularly occurring variable costs like online advertising that must be budgeted annually and vary monthly. Layer on top of that the requirement to report spend against the campaign process marketing is using to report on ROI in problem 2 – the frustration and aggravation between marketing and finance just grows.
SO – how do we begin to repair the relationship between finance and marketing – really between finance and budget owners?
Provide spend visibility: Allow departments to spend how and where they need to and tie those expense systems into your backend to allow for proper budget coding. Use the skill set within your AP department to help other departments, like marketing, accurately forecast and plan budgets.
Automate as much as possible: Marketing is using so many systems and tools to manage campaigns, as are many other departments; do your best to architect workflows that integrate those systems within the e-procurement solution to capture the information you need while also reducing the time and effort on the budget owners.
Give mobile access: Making it easy for budget owners to see their spend, approve requests and manage budgets from their mobile phone or tablet will lead to greatly increased adoption of your finance processes and use of e-procurement solutions that drive compliance.
Last but not least, simplify the vendor onboarding process: Whether vendors are used once or multiple times, have large invoices or small, require credit card, wire or check – make the process of adding and managing those vendors easy on the budget approver to ensure compliance and easy for the user to select the vendor they need in the e-procurement solution.
In short, finance and budget owners need to work together and consider how technology can streamline processes and help organizations spend smarter. Read Forrester’s take on automating business processes in e-procurement solutions in The Forrester Wave™: eProcurement, Q2 2017, where they note “Basware’s focus on automating process and minimizing manual approvals is an important differentiator, because most of its competitors still emphasize outdated multistep, manual approval chains.”