Zombie Spend: the Hidden Money Leech You Need to Cut Out of Your Business

The zombie apocalypse is happening. It’s closer than you might think, and it comes in the form of the undead: SPENDING ZOMBIES! In a world where you all want to run away, you must be prepared. Luckily, we’ve put together this post with business tips for surviving the zombie apocalypse of out-of-control spending.

It’s a chilling sight to behold. Zombies everywhere! They lurk in crowded city streets. They lurk in your corporate offices. They lurk among your suppliers. And they lurk in your company budgets 😱😰

We have bad news if you still think zombie spend is another show on your favorite Netflix series. Think again.

🧟‍♂️ Zombie spend occurs when a company continues to pay for unused or unneeded services or subscriptions. This can negatively impact a company’s cash flow, a critical aspect of financial stability.

How it happens, and why does it matter?

Zombie spend often happens when employees subscribe to a service, forget about it, and sign up for another software or application without canceling the original subscription. Your enterprise continues to incur costs for both subscriptions, even though there are no active users on the initial account.

This form is challenging to detect because it can be hidden in invoices that include legitimate expenses for products and services. Accounts payable departments and bookkeepers may not have adequate measures to prevent such occurrences, making it even more important to have regular spending reviews to identify indications of zombie spending.

Uncovering the causes of zombie spend

Here’s when it crawls out the most:

1. Spend control is poor

When no spending controls are in place, employees may be able to make purchases on the company’s credit card without sufficient oversight. If a company does not address zombie spend early on, it can easily attack: incurring expenses without proper approval becomes a recurring issue. By implementing spending controls early on, businesses can prevent such scenarios and maintain better control over their financial resources.

‍2. Inaccurate expense insights

When you have up-to-date information on expenses, it’s easier to prevent financial mismanagement and control cash outflows. If the information provided to the accounting department is outdated by the time it reaches them, damage control becomes more important than prevention. A business can make informed decisions based on real-time expense insights, such as denying certain expenses or establishing policies for them.

3. Lack of control over your spending patterns

Building on the previous idea, clearly and accurately categorizing expenses is essential to gaining meaningful insights into spending. If expenses are not properly categorized, the insights provided will be murky, lacking a complete picture of the company’s spending. Employee-generated expense reports are often prone to misclassification, leading to inaccurate categorization. This is both a policy issue and a systemic problem.

4. Going with the manual approach

Paperwork is like an open wound after a bite. The inefficiencies in manual reporting and reimbursement processes can result in the recording of incorrect expense amounts, unreadable receipts for reimbursement, and potential errors that may pass unnoticed by the accounting department.

How to slay the zombie spend monster in your business

Time to beat it. Five solutions may be used to prevent zombie spend:

1. Control over the expenses

To mitigate the risk of uncontrolled expenses, consider assigning corporate cards to employees and setting guidelines for approved categories and spending limits. Automation is your antidote. It can reduce the need for manual expense reports, increasing overall control over the expenditure process.

2. Streamlined tracking in real time

A company can enforce a well-defined spending policy by limiting and restricting spending categories. Automating the expense process is much more efficient if employees have corporate cards rather than using their funds, reimbursement reports, and other battle shields. With these measures in place, unauthorized expenses can be quickly identified and prevented, and employees can be made aware of their mistakes to avoid relapse in the future.

3. Investigated spending

The manual reporting of expenses is a time-consuming task if not handled properly. After reports are submitted and approved, reimbursements are given the green light, and it’s on to the next cycle. The process of spending analysis begins with consolidating these reports into a spreadsheet, but who takes responsibility for that? Fortunately, some expense management software can automate it, while others offer spending analysis tools to streamline the process.

4. Automated expenses

Streamlining expense management processes using automation can save time, money, and power to survive. If you opt for a corporate card system, it integrates multiple cards, enforces spending restrictions, and handles reimbursements on a single automated platform.

5. SaaS management

It’s the company’s responsibility to handle subscriptions, not individual employees. Built-in spending controls and policies can help prevent employees from signing up for unauthorized subscriptions and being eaten by them. Many cards can be used for certain services, such as software subscriptions. This way, the entire company can access necessary software instead of relying on individual employees.

The secret weapon: spend management software

Unlike a horror movie, modern solutions do not leave you with no way out.

The right spend management software can help you implement an expense policy, digitize receipts, track invoices and categorize spending to simplify tracking.

The zombie spend, though tricky, is afraid of being exposed. And once you implement a healthy control, the undead will find no place to hide.

Let’s face the zombie spend with Karta spend management software. It’s even better than a high-powered rifle with a silver bullet! Check out Karta.com to find out more ;)