Background:
Welcome back from what we hope was a restful, celebratory 4th of July holiday. We are a week into Q3 and we want to ask you - do you know what your cash flow projections look like? We really hope your business ledger doesn’t look like this anymore.
Using the trusty Excel spreadsheet is of course a great start…but how does all of that data make it into your sheet? Is your staff still collecting and submitting piles of receipts for business expenses? Are you manually importing invoices into Quickbooks and matching them to checks paid in your bank account? What if we told you there is a better way using…modern software.
In this recipe we’ll cover tools like Ramp, Mercury, and Airbase and how they can transform your entire finance function. These tools help streamline expense management, automate financial workflows, and even provide real-time insights and reporting on key financial metrics. All of these combined empower you to better manage your cash flow.
Shopping List:
1. Expense Management and Corporate Credit Cards:
Brex:
Overview: Brex offers corporate cards tailored for startups with higher limits and no personal guarantees.
Unique Feature: Rewards program, in lieu of straight cash back Brex has partnerships and other arrangements with many companies, especially SaaS companies. You can unlock immediate savings or other rewards simply by using your Brex card to make the purchase.
Ramp:
Overview: Ramp provides corporate cards with built-in expense management, focusing on helping businesses save money. Ramp is a “charge” card which means you cannot carry a balance.
Unique Feature: Unlimited 1.5% cash back. Ramp is the upstart in the field and has chosen a far simpler approach to retention, just hand back some of the processing fee. This is great news for helping to manage business cash flows.
2. Comprehensive Spend Management:
These platforms are more crucial for larger, distributed teams where individuals have many different needs. In terms of spend, approval, or even reporting. These nuances will require tools more powerful than those coming from the credit card companies above.
Overview: Divvy combines modern credit cards with expense management software, offering real-time visibility and control over spending.
Features: Budgeting tools, real-time expense tracking, automated expense reports, and integrations with most popular accounting software.
Divvy is a part of Bill.com so if you’re already a customer of Bill, take a look at Divvy.
Overview: Airbase offers an all-in-one platform that combines spend management, bill payments, and corporate cards.
Features: More customizable approval workflows than Divvy, and deeper integrations with ERP systems.
3. Banking and Financial Operations:
While Brex and Ramp do offer some basic banking services, if you’re a new business or tired of antiquated bill pay or wire transfer interfaces from legacy banks, consider switching to a newer bank. Bear in mind these banks don’t have any physical branches. That will definitely take some getting used to, but the modern platform means modern convenience. You have all the banking features available anywhere you have WiFi.
Overview: Mercury is a modern banking platform designed for businesses that want to better integrate their bank into the rest of their financial stack.
Features: No fees, virtual and physical cards, integrations to other tools (including those mentioned in this post), and reporting / cash management tools.
Differentiator: Mercury focuses on providing a seamless banking experience tailored for businesses who want to integrate their bank to the various tools from payroll to credit cards to expense management to your KPI dashboards or reporting tools.
Overview: Bluevine is also a modern banking platform that is designed for more traditional businesses looking to move away from their legacy bank.
Differentiator: Offers many of the same features as Mercury but it’s worth nothing that they do offer interest on their accounts where Mercury offers none. If your business carries or grows a cash balance and you want your bank to be modern, take a look at Bluevine.
Cooking Instructions:
1. Identify Your Business Needs:
We do believe a simple first step of rolling out Brex or Ramp instead of classic corporate cards will get you a leg up, it’s important to take a step back and find specific pain points for your business.
The most common ones are expense tracking, budgeting, bill payments, or banking services.
Example: If you’re a few hundred distributed employees strong and you need comprehensive spend management and bill payment solutions, Airbase might be a suitable choice.
2. Choose the Right Tools:
While this recipe lists a few modern bank account solutions, you may not need to go that far today. Be fair with your needs assessment.
Fost most businesses, we recommend starting with a modern expense and card solution like Ramp. This will allow your expense data to flow through from the card into Quickbooks. Say goodbye to manually submitting and categorizing expenses!
3. Set Up and Integrate the Tools:
Once you pick the tools, you will have to spend some time up front setting rules, budgets, and people up correctly.
For example in Divvy you can assign cards and spend categories to specific budgets. Then as a manager you can see the spend across each of these areas
4. Start automating!
All of these tools have a variety of built in automations. Set them up and say goodbye to the mundane of sending approvals to the right teams, categorizing software licenses versus office meals.
For example in Airbase automatically send Sales team Salesforce expenses to the IT team:
5. Unlock New Data Insights:
Final Touches:
Feedback Loop: Encourage feedback from your whole team on the tools’ performance and usability, and make adjustments based on their input.
A well running finance function keeps good controls and maintains visibility, while not slowing down business operations. Leveraging these tools will give you these benefits as well as improve visibility in your cash flow, cash positions, and accounts payable. Take your finance function to the next level by using these tools and the data they provide to actively manage your cash flow and cash positions. For example, with better visibility of outgoing payments, you may find areas to consolidate vendors or optimize payment schedules.
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