How Your Agency Can Better Track Employee-Intiated Spending

This blog is an excerpt from GovLoop’s recent guide, “Tech Priorities for a Modern State and Local Government.”

Legacy systems and processes affect almost every facet of government. While you probably know the negative ramifications legacy systems can have on security and efficiency, you may be less aware of how old processes are having a direct negative impact on government spend management.

In particular, processes surrounding employee-initiated spending are in need of an update to have more efficient and holistic spend management. Essentially, employee-initiated spending is anything an employee is empowered to spend money on that their employer is responsible to pay. This spending could be for office supplies not requiring a purchase order, an employee’s local mileage costs, or any costs associated with international business trips. This kind of spending is inherent to all sectors, but as state and local governments face decreases in funding, it becomes increasingly important for them to understand and control employee initiated spending, which impacts the overall financial health of their agency.

To better understand these challenges and how state and local governments can overcome them, GovLoop sat down with Matt Gibbons, Senior Director of Sales for Public Sector at Concur, a company that provides cloud-based travel and expense management solutions.

Today, a large number of state and local governments have outdated systems and processes, and many are still using paper-based processes to capture information around employee initiated spending. “This creates a series of challenges for state and local governments because these systems rely heavily on manual processes that typically take longer to complete and cost more when you start adding human capital into it,” Gibbons explained.

In addition to the burden of manual processes, outdated systems also make it difficult for agencies to meet compliance requirements regarding how they spend taxpayer dollars. “If you don’t have the granularity on what’s being spent, you can’t report on it, and this creates voids in reporting that are problematic,” said Gibbons.

Capturing the data involved in employee-initiated spending is particularly important to state and local agencies because it is one of the largest transactional aspects of government spend. Through travel and procurement cards, government has empowered employees to go out and spend a certain amount. However, agencies still need to know the details of what is being spent for compliance and reporting requirements, which is historically a challenge for state and local governments because of the wide range of government mandates with which they must comply.

“Capturing information and having the employee go through a manual process to input the data into a system is cumbersome, time consuming and prone to errors,” Gibbons explained. Conversely, leveraging an automated system which allows data to flow seamlessly back into the ERP system offers significant advantages to organizations.

Concur offers an automated solution that allows state and local entities of all sizes to manage employee-initiated spend through a single platform where agencies’ existing ERP, human resources, and accounting systems connect, forming a complete view of agency spend. Bringing all the data together is just part of managing employee-initiated spending. For a spend management solution to truly work for an agency, it should be flexible, scalable and tied to policy to assure compliance and ultimately a successful solution implementation.

As a cloud-based software-as-a-service (SaaS) solution, there’s no need to invest in additional infrastructure for an agency to utilize Concur Travel and Expense. “It only takes a few months for organizations to stand up our solution,” Gibbons said. “As a result, agencies don’t have large upfront expenses associated with new software and hardware environments.” This allows agencies employing the solution to quickly recognize value.

To get the most out of the platform, Gibbons recommended really understanding the pain points at your agency. “Once you understand what parts of your processes are outdated, you can start mapping out where you want to go.” From there, agencies can configure the system and roll it out in a way that gives the agency the most value.

Looking forward, Gibbons explained that state and local governments have to embrace these systems that are designed to meet the needs of their organizations and offer continuous benefits. Manual systems no longer have to hinder agencies’ efficiency. “It’s time that agencies start embracing the change that will benefit the organization and the people they serve, whether it be state, city, county, or local municipalities,” he concluded.

A connected, automated spend management solution allows agencies complete visibility into employee-initiated spending and their overall financial health. When state and local agencies have a holistic picture, they can assure compliance with government mandates, provide total transparency into spending, maximize spending for taxpayer value and redirect more resources into citizen services.

 For more information about how to innovate state and local government, you can find the full guide here.