A new age: Automated compliance for all company spend.

You’ve made certain that every operating unit has clear policies to control the risks that are created when employees engage a vendor and agree to pay for products and services. Some examples of these policies might include:

• Finance has clear expense policies in place, including what documentation is required and who needs to approve new purchases. 
• IT requires SOC reports for new software vendors.
• Procurement has guidelines on preferred vendors and pricing for certain purchases. 
• Legal has requirements for certain conditions in the contracts that you enter into. 

But how can you be sure that every employee, anywhere in the company, complies with these policies? They would need to know that they exist in the first place, and when they are applicable to them. And even if they are aware of the policies, tracking compliance across multiple stakeholders, all using different systems, is a truly difficult challenge.

Policies without compliance are just words on a page, and compliance without evidence is like trees falling in the forest. 

Employees are expected to know what the cross-departmental requirements are, how to fulfill them, and finally how to document that they’ve been fulfilled.

When we talk about compliance, we begin with the expectation that the policies that are to be complied with exist to protect the company’s capital and its reputation. Policies protect against:

• Fraud and unnecessary spending.
• Losses that stem from the use of unsafe software. 
• Losses from overspending on products and services. 
• Losses from badly worded legal agreements.
• Reputational loss from engaging with unacceptable vendors.

Obviously, the protection isn’t achieved by the policy, but from compliance with it. So, how can we ensure that all employees comply with all policies? 

Compliant spending ensures efficient policy adherence, so you can rest assured that any purchase aligns with your company’s budgetary goals and overall spend culture. 

Compliance also requires detailed information about all spending, which is essential in the event of an audit. Your company’s strategic goals need a foundation of correct and complete information for reporting and forecasting. That means capturing all transaction details for all stakeholders. 

How rule-based policies help compliance.

Relying on human oversight for airtight compliance is inherently risky. It also places an undue burden on managers and the finance team when they are forced to “police” employees to make sure spend requests are compliant. To ensure compliance, finance team members have to do things like chase down lost receipts and try to find a missing contract for the legal team’s approval. A lot of this doesn’t happen until after a purchase is made, further adding to the workload and to the risk. 

Airbase’s Guided Procurement module eliminates the risk of non-compliance with a central intake process driven by rule-based policies. If, for example, an initial purchase request indicated it was for a software solution, the request can be routed through Jira to the IT team for review and approval once an acceptable SOC report is received, and through the legal team to ensure the contract is reviewed for required terms.

Try Guided Procurement in an interactive demo → 

A rule-based platform like Airbase lets the system enforce compliance right from the beginning of a spend request — even for corporate card spending. Configurable, automated workflows drive processes like routing, documenting, approving, and reminding. And a complete audit trail is automatically created for easy reference. By removing ambiguity around company purchasing policies, rule-based platforms have the power to transform spend culture and put finance into a more collaborative role. 

Michael Zheng, Head of Finance at Affinity, describes the shift that happened after the company switched to Airbase:

​​“Airbase has shifted the conversation around spend. What used to be a post-expenditure questionnaire, ‘Why did you spend this?’, is now a collaborative planning conversation, ‘What will you need to spend on in the short and the long-term and how will it benefit the business?’”

Automated documentation compliance. 

Finance teams waste a significant amount of time chasing employees for documentation associated with a purchase, like receipts (necessary for tax purposes) and vendor details. A guided intake process proactively prevents problems with missing vendor information by collecting it up front. And, with a rule-based methodology, the system can prompt employees for missing receipts. 

When approval workflows are built into every purchase, a complete record is dynamically created for every transaction. That includes:

• The initial request.
• Purchase orders and corresponding invoices.
• Payment details.
• Tax information.
• Contract information.
• Required documentation for other stakeholders. For example, IT security may need visibility into every software purchase. 

A spend management platform with a rule-based guided procurement process guarantees that employees comply with your company’s guidelines for purchasing. It also records each stage of every transaction, including requests, approvals, transaction details, and supporting documentation. This eliminates the need for reconstructing events and searching for evidence to ensure compliance.

Find out how Airbase modern spend management enforces compliance in an easy-to-use platform, without the lengthy implementation and steep learning curve of a heavyweight solution. Book a demo to see firsthand how you can automate compliance!