Especially in today’s dynamic economy, businesses need to have crystal-clear visibility into their cash flow and employee spend. Yet, a lot of small and mid-sized enterprises (SMEs) struggle to capture and analyse their complete spend since many of the tools on the market cater to larger companies and do not fit their needs.
Well, we at American Express Global Business Travel (GBT) aim to change that with a new spend management platform we’ve just launched called Neo1. The tool, now being offered for free to businesses in the United Kingdom, was built specifically for SMEs to help owners and finance departments easily manage employee spend.
Today Fiona Hastings, general manager of Neo1, shares more about how the tool can help businesses gain greater oversight of their cash flow and enable employees to purchase, within company limits, the items they need to do their jobs.
Q. Where did the idea for Neo1 come from?
Technical innovation starts with an idea. The best ideas are the ones that solve a problem – nothing new to anyone. I’ve always been surrounded by people who own businesses, and I’ve seen too many SMEs struggle and fail because of cash flow problems. Many SMEs are founded on great ideas, people work very hard to make their ideas a reality, and many are profitable, but inefficient tools and practices to manage the timing of money going out is a common problem. And it is not the big expenses that trigger failure. It’s the sum of all the little expenses that seemed to add up and cause an issue. SMEs don’t see them until it’s too late.
So, I had an opportunity to head up an innovation team at KDS (which GBT acquired in 2016) and build an end-to-end strategy to help SMEs manage travel and expenses. KDS has award-winning technology best-suited to large companies, so I was in good company but knew that the bigger platforms that cater to larger companies were too complex and expensive for SMEs. They require dedicated people to manage them and are simply too challenging for SMEs. SMEs’ needs are different.
So for the first 12 months, I worked with Pascal Danek, a brilliant engineer based in France who today is Neo1’s development manager, to create the vision of Neo1 and figure out how to solve this problem – create a platform that can help SMEs with their cash flow and see their total employee spend in one place.
Q. What kind of businesses would benefit from using a tool like Neo1?
We’re finding quite a broad industry application for Neo1. Construction, healthcare, pharmaceuticals. High-tech and startups – they love it. Also, real estate, distribution companies, manufacturing, fintech, business services – sort of anyone that has employees and needs to be able to manage their spend. If you’ve got under 10 employees, you probably don’t need Neo1. But once you have 20, 30, 40 – up to about 150 employees – that’s really when the volume of spend happens and you need to watch cash flow and have transparency over it. Those are the businesses that would benefit from using Neo1.
Q. What kind of challenges do SMEs have with cash flow and employee spend?
When building Neo1, I conducted interviews with about 150 businesses about how they manage their expenditure. The more I interviewed these businesses, the more I realised how they handled it was a mess. There was no consistency whatsoever. It was all trust-based or involved old-fashioned, manual, time-consuming processes. No one could see what was going on.
The biggest issue was visibility. It’s not the big-expense items like rent or payroll that were problematic. It’s the cumulative effect of all those little employee expenses that they don’t see until they’ve hit at the end of the month. You can keep the big-ticket items at the top of your mind, but it’s the smaller expenses – the subscription payments, the seven people who now have LinkedIn Premium, the uniforms, the mileage claims – that add up to create problems.
The second biggest issue was wasted time and effort. We found that employees were frustrated with the procurement process. Whenever they needed something, they were expected to “just email Doris,” and maybe they’d get a response. But when they finally got what they asked for, it was never quite what they needed or asked for to enable them to do their job. So, they ended up just buying their own thing, and when they tried to put a claim in, they got rejected. The process was inefficient and never delivered to the employee or the business what was needed.
Q. How does Neo1 solve this problem?
Neo1 simplifies everything by bringing together expense management, purchasing, and travel booking all in one place, so you don’t need different procedures and systems to manage employee spend. With Neo1, your employees can get the right things at the right time to maintain their productivity without your business losing control over the costs.
Q. What is so unique about Neo1?
There are lots of travel and expense management systems out there that connect purchasing with expense but mostly for travel-related expenses. They aren’t doing the same thing for procuring other items – like T-shirts, uniforms, laptops, or mobile phones.
With Neo1, we have brought those two worlds together – travel and expense – and general procurement and budgeting. Neo1 manages the end-to-end process of “tail-end spend.”
Q. What is tail-end spend?
It’s all those smaller individual purchases typically done over a broader range of vendors. It actually can end up being a large percentage of total spend and can be hard to track.
Historically, it could be someone buying an item themselves and asking for their money back, someone using the boss’ credit card, someone just walking down the street to a local vendor and then the vendor issuing an invoice in the mail.
With Neo1, we pick up all that spend and put it into one place, so you have full visibility over it.
Q. How does Neo1 capture tail-end spend?
We achieved this by integrating Amazon Business into Neo1 as well as the GBT travel booking tool. Between these two integrations, we cover the majority of tail-end spending needs for employees.
An employee can access Amazon Business directly through Neo1. They can search for items from millions of suppliers and buy whatever they need to do their jobs – stationery, office supplies, a laptop, etc. After they select what they want to purchase, it’s submitted to a manager for approval. Once the manager has approved the purchase, the order is fulfilled.
Most general goods and services an employee needs to do their job can be fulfilled in Neo1, either with Amazon Business or with GBT on the travel side.
Q. How does an employee book travel?
They just click a button and are taken to our travel booking tool, where they can search for and book flights, hotels, trains, and car hires. They can compare trip costs and details simply online and also get access to the latest travel alerts and restrictions using Travel Vitals™ from GBT.
Q. How does Neo1 help prevent overspending and fraud?
Just by bringing total employee spend to one dashboard, a business can see where it all is. Suddenly, fraud goes down because spend is not stuck in a claim, emailed in an Excel spreadsheet, or hidden in someone’s email. There are a number of ways we prevent overspending and fraud:
Employees create budgets asking for pre-spend approval, Amazon Business purchases are individually preapproved, and when an employee makes a purchase, they are asked to justify the spend. “Was this you? Is this correct? Please define the purpose.”
We give our SMEs best practice policies, which are built into the system, that trigger a “review” of exceptionally high expenses too.
We also have reports that analyse the data for “low-value duplicate spend” and out-of-policy activities.
If you have one place for all employees to manage their spend and everyone is using it, you gain transparency. In Neo1, we’ve given each user the same view, but some users will have access to more information, depending on who they are in the company (i.e., the boss, a team manager, or an employee). Creating a simple, consistent user interface and experience no matter what role you have was an important part of our design. We didn’t want different views for different people. We wanted the same views that just presented more data to certain people to simplify user adoption. The easier it is to use the faster employees start to use it and the more quickly you can manage spend.
Q. What kind of feedback have you gotten from clients?
Businesses, all of us, are going through a lot of change right now, so a lot of our clients are using parts of Neo1 that help them right now, such as purchasing office supplies for a working-from-home employee base, but have not yet taken advantage of the travel capabilities. But those that are traveling love the fact that employees can book a trip themselves and if they need help, they’ve got GBT to call. They also love that the same travelling employees can buy on Amazon Business from the same place.
Q. Where’s Neo1 available at this point?
Right now, it’s available in the UK. We are excited to expand Neo1 to additional countries and looking to do so in the US in 2021.
Q. What’s the process for implementing Neo1?
There are only three things a client needs to do.
First, they register for the platform online, which takes less than five minutes.
The second is to connect their accounting system. Neo1 has integrations with many common SME accounting platforms. You just click on a button, enter your company ID, and then the two systems start talking to each other automatically.
The third is to decide which employees should be given access and set them up. The process is very easy as you can either load a list of employees or create them on the fly.
If you wish to also activate Amazon Business, which is optional, this takes two minutes.
Most of our clients are ready to go within two to three days.
Q. What is the cost of Neo1?
A. At the moment, it is free to use the platform. There are no subscription fees, and you do not need to load a credit card to gain access to the platform.
Q. If someone is interested in using Neo1, what should they do?
They should register on the Neo1 platform. It takes all but a few minutes.