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Sophie Conaghan is the Finance Lead at CharlieHR and also runs Finance for Founders delivering workshops that demystify the principles and language of finance and accounting for non-finance people.
As the only in-house finance person on our team, I wear many hats, collaborating closely across departments and offering guidance to our leadership as needed. Our recent tech stack overhaul was prompted by a few key factors. Across both finance and operations, we realised that our legacy tech stack was comprised of an array of different tools for different parts of our spend management process – we’d ended up with a bit of a disparate stack.
This stemmed from the historical use of various outsourced teams, each introducing their preferred tools. But, as new shiny tools came along or we thought something was the next big thing, they were integrated without a cohesive strategy, resulting in inefficiencies. It became clear that this patchwork approach was causing more problems than it solved, and when some of the tools had run into errors over the last year, we'd received poor support in correcting those errors.
On the operations side, another challenge we faced was keeping track of staff turnover across various systems. While we use Cledara, removing departing employees from our spend management systems required manual intervention. This involved individually revoking their access, deleting their cards and adjusting spending permissions. Managing multiple online wallets and enforcing our spend policy across multiple systems was complicated, plus we were paying for duplicate functionality. We needed a unified system with clear policy integration.
The business and the management team were also looking at different financial reports each month, so we integrated an FP&A tool. We were starting to look at some of the business data in a different way and to talk about it differently across the business, getting more buy-in from the management level. The problem with our old process was there was no immediate overview of OpEx until month end was closed in Xero. I sought a solution that would offer an easy-access view of department spend throughout the month.
This all triggered that it was time to relook at the stack.
The Amazon Memo
When I brought up the idea of a tech stack overhaul, the CEO and COO weren't immediately on board. They saw it as non-strategic given our small team and the belief that our current setup was working fine. Time and priorities were their main concerns, so we put the idea on hold. But I started digging around in my finance circles, checking out LinkedIn and keeping an eye on software trends. Over time, I built a rough idea of what solutions were out there.
Then, someone suggested I try the 'Amazon memo' approach – basically putting our case down on paper. So, I mapped out our current setup, listed our pain points and highlighted the potential perks of switching things up. It wasn't just about replacing what we had; I wanted something that could give us extra benefits, maybe even some strategic advantages down the line. Eventually, I narrowed down a couple of options that seemed promising and started speaking to the providers. Then I could say there are definitely two who will be able to do what we want and need, but also a little bit more – I think it's worth having the conversation. I got the go-ahead and dove straight in.
Selecting the Right Platform
As we progressed, our initial focus on a single platform with a budget overview dashboard shifted.
We honed in on the importance of seamless implementation and onboarding, prioritising the employee experience to ensure user-friendly UI and smooth transitions. These insights were gleaned from platform discussions, considering the product's target audience and functionality. Additionally, our complex budget structure, including individual allowances for team members, necessitated specific features that some systems couldn't accommodate.
This process led us to define essential criteria, including:
centralised spend visibility
reliable card functionality
flexible spending controls
decentralised management
integration capabilities
dashboard insights
fee transparency
security measures
compatibility with Google and Apple Pay
It's interesting how the latter feature, which we initially thought was minor, turned out to be really important, especially for the CEO. It just goes to show how crucial practical functionality is for everyday use.
The other crucial aspect was data matrix flexibility: the ability to categorise, filter and report on data by individual, team, department, cost centre, account code and budget. This multidimensional approach was essential due to the diverse nature of our budgets and account codes, which often intersected across teams and functions.
What Does 'Integration' Mean, Anyway?
Setting up meetings with product managers proved incredibly valuable in understanding these solutions. The conversations were more like collaborative problem-solving sessions without the pressure of sales pitches, which made for a productive and neutral environment. The key platforms where we spoke to product managers were Moss, Spendesk and Payhawk, along with Pleo.
One key insight was from Spendesk regarding this data matrix flexibility. We found that they only allowed two dimensions, which didn’t meet our needs. The team mocked up an example of how we could use the product – if we wanted to look at our data by department or function, we’d have to set these up as bespoke categories in the platform and then download reports and do our own analysis. The product managers really helped us figure out how we could use the platform. Ultimately, that led to the conclusion that it wasn't the right one for us because in another platform we could use three dimensions directly from within the platform.
An insight from Payhawk's product team was about how they were approaching the design of their platform and planning their roadmap – they were approaching it as a budgeting and reporting tool as well as a spend management tool. I've seen this quite a bit where point solutions are being bundled. While it was more advanced than we needed for the time being, it was intriguing to explore and understand Payhawk's roadmap. We discussed pricing, advocating for more accessible options for SMEs, which they acknowledged and are working on.
An important takeaway was the broad definition of 'integration' and the need to clarify specifics. I'd really persist in finding out what apps mean when they say integration. Is it automatic data transfer in real-time? Is it a one-way integration? Is it a two-way integration? Is it a push integration? Is it a pull integration? Is it actually a CSV import or export between the two platforms? What is it? In theory, it means you can import and export data with other systems, but that can be achieved in many different ways and some ways are easier than others.
Ultimately, we landed on Moss as our spend management system. Two key factors influenced our decision. Firstly, the number of data levels. We needed three levels to achieve data matrix flexibility, so we could categorise, filter and report on data by individual, team, department, cost centre, account code and budget. Secondly, we needed Google and Apple Pay for the employees. Moss was able to deliver on these criteria.
Lessons Learned
Key takeaways for others looking to embark on a similar journey:
1. Collaboration across departments
If it's not just a finance project, don't make it a finance project. Collaborate. In our case, it was people ops/ops and finance. People ops provided valuable input on team engagement and usage, while finance focused on dimensions crucial for our needs.
2. Direct conversations with product managers
Don't hesitate to request to speak directly with product managers. Unless your needs are straightforward, speaking to them is essential for understanding integrations, data structures and product roadmaps, especially if you're growing and want to ensure their plans align with your future needs. They were all really receptive to booking in these conversations.
3. A deep understanding of product strategy and company culture
While products may seem similar at first glance, it's essential to unwrap and understand their underlying data structures and product strategies. For example, are they building it as a finance tool or are they building it as a business tool? And which one suits your way of thinking or your company culture better?
Consider how they fit into your existing stack in terms of your current or future data structures and your evolving finance culture. From a finance perspective, that culture piece is about how much do you want the business as a whole to be discussing and understanding financial information. If you’re aiming for more of an open culture, seek products that have the same intention of opening finance up to more people in the business, making data accessible and obtainable.
In conclusion, our journey through the process of overhauling our tech stack for spend management has been enlightening. By collaborating across departments, engaging directly with product managers and delving into the intricacies of each platform, we've gained valuable insights to make informed decisions. With the right tools and strategies in place, we're ready to enhance our efficiency and drive growth.
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