Automation gives SaaS companies more visibility

Air Force Base - Improving Financial Performance: How SaaS Companies Manage Non-Payroll Expenses - October 2022 - Learn How Different Types of SaaS Solution Providers Use Non-Payroll Expense Management Systems

Business-to-business (B2B) software-as-a-service (SaaS) solution providers often lack full visibility and proactive control over their non-payroll spending, including invoices received from vendors and suppliers. An in-depth study of how each type of SaaS solution provider manages its non-payroll expenses shows that these companies rely on time-consuming and inefficient processes that can lead to data errors and lost revenue.

SaaS companies of all types are expressing interest in an alternative system that will simplify the way they manage non-payroll expenses, allowing accounts payable (AP) teams to work more efficiently. Currently, 62% of the surveyed customer relationship management (CRM) companies currently use such a system, but that number drops to 32% among companies offering web-hosted SaaS solutions. Nearly half of these companies are very interested in using a non-payroll expense management system.

Improving Financial Performance: How SaaS Companies Can Manage Non-Payroll Expenses,” a PYMNTS and Air base Collaborate to examine the non-payroll expense management challenges faced by different types of SaaS solution providers (web hosting, e-commerce, content management system (CMS), project management or customer relationship management (CRM)). Between May 18 and June 6, we surveyed 225 executives with deep knowledge and leadership in AP departments at SaaS companies with 100 to 1,500 employees to explore how automated systems can simplify non-payroll Spend management and improve financial performance.

More key findings from the study include:

Almost all SaaS company types use a spend management system to manage expense reimbursement, but other popular uses include managing invoice-based vendor payments and employee spending on corporate cards. Research by PYMNTS found that approximately 95% of SaaS companies offering CRM or project management solutions use an expense management system to manage expense reimbursement. E-commerce companies are most likely to use these systems to manage invoice payments for suppliers and corporate card spending for employees, at 89% and 75%, respectively.

Over 90% of companies surveyed lack full visibility and control over non-payroll spending. Fixing this problem will help all companies save an average of 11% of their total spend from wasted spend, Web hosting companies are expected to have the highest share of savings. When it comes to managing non-payroll expenses, nearly all companies waste expenses such as zombie, unauthorized, unwanted, duplicate, or unnecessary expenses. Web hosting companies believe that if they had full visibility and control over all non-payroll expenses, they could save 15%, higher than the 11% average for all companies that waste at least 1% of their expenses.

The main problem all SaaS companies face in managing non-payroll spend is the lack of comprehensive visibility before spend commitments, while CRM The company is most likely to cite this question. Manual handling is the second most common problem for AP teams, and is most likely to be encountered by companies offering web hosting SaaS solutions. 80% of SaaS companies offering CRM solutions cited a lack of comprehensive visibility as an issue holding back non-payroll spend management, ahead of all other types of SaaS companies. While 22% of companies reported issues with manually handling their non-payroll expenses, 40% of web hosting companies mentioned the issue. Overall, AP teams spend 18% of their monthly time on manual tasks, while web hosting companies spend twice as much at 36%.

To learn more about how different types of SaaS solution providers use non-payroll expense management systems, download that report.

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