Most companies want proactive spend management, but few firms offer it

While a solid majority of small and medium-sized businesses are concerned about managing their spending more efficiently, only a minority of accounting firms offer advisory services for doing so.

That's according to a survey from CPA.com, which sampled more than 1,100 SMBs and accounting firms on the opportunities presented byspend management, the ability to view, control and track a company's spending in real time to provide insights to key financial decision-makers. In this case, "spend management" differs from "expense management": the latter refers to work done after the fact, while the former is more proactive in approach.

The survey found 69% of small and midsized businesses want new options to help control costs, and 72% indicated they were interested in proactive spend management solutions. Respondents cited a variety of challenges they'd like to solve, such as spending too much time properly coding expenses, lack of real-time visibility in spending, inaccurate month-end closes, and a lack of reporting around non-payroll spending. Due in part to these challenges, the survey found 33% of firms take anywhere from 15 to 30 days or more to reimburse an employee.

Despite these issues, CPA.com noted that not many CPA firms offer services in this area. The survey found that 26% of firms aren't involved in their clients' expense and spend management at all, while just 22% offer both expense and spend management services to clients as well as recommended software. Overall, only 34% of accounting firms offer expense and spend management services. The firms that offer such services have largely found success in doing so: those who are packaging expense management as part of their advisory service are realizing significant benefits, including greater efficiencies and profits (63%) and an increased ability to attract and retain clients (74%).

CPA.com president and CEO Erik Asgeirsson said these results point to a potentially high-growth area for accounting firms offering client advisory services.

"The most successful client advisory services practices are very intentional about how they build and scale their practices," said Asgeirsson. "Spend management is strategic and a natural extension of CAS — adding it allows firms to deepen their relationships and deliver the real-time insights and proactive guidance that their small and midsize business clients value."

The survey was conducted from Sept. to Nov. 2022 and included responses from 368 accounting firm participants and 763 SMB participants, for a total sample size of 1,131. The survey was administered online, conducted by CPA.com and Divvy, a subsidiary of Bill.