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Empower Spending Using Simple Controls with Zac Heinz

Published by Summit Marketing Team on Mar 3, 2023 6:00:00 AM

The Modern CPA Success Show: Episode 84


In this episode, our host and Summit’s Virtual CFO, Tom Wadelton, and Jake Grimm, Summit's Director of Technology, discuss the benefits of Divvy with Zac Heinz, Divvy's Director of Channel Sales, and how this all-in-one expense management solution uses simple controls to empower spending for business owners.





[00:00:02] Tom: Welcome to today's podcast episode. We're talking about empowering spending with simple controls today.

[00:00:24] I'm joined by Jake Grim, who is the technology director with me at Summit. I'm Tom Walton. I'm one of the virtual CFOs at Summit CPA Group, also part of Anders cpa and then also Zac Heinz is our guest today. And Zac is the director of Channel Sales at Divvy, and he's been there for three years.

[00:00:41] So welcome guys. Looking forward to today's conversation. Zac, as we talk about empowering spending controls, can you talk about just some of the problems that small businesses face as they wanna empower people to spend, but they also want something that's efficient and they want controls? What do people deal with and they're trying to solve this problem? 

[00:01:01] Zac: Yeah, that's a great question, and I feel like it's changed a lot since I've been here at Divvy. I mean, in three short years. We've gone through a pandemic, and how much that's changed the world, and the change the way that small businesses work and function.

[00:01:16]And so what we used to see, and while I was doing implementations and, and doing some of my engineering work here to where I'm now, where I'm working more on the sales and the front end side, needs have changed a lot. Specifically the need around controls. For a while, the supply chain was just gone, right?

[00:01:36] And so nobody knew whether they were gonna have customers. Nobody knew whether or not they could meet face to face. People were changing drastically how they were working within the market, and they needed systems and solutions to help them in this new modern environment. Some of those are gonna be better and tighter controls over their spend.

[00:01:55] The ability to work with a more virtual workforce, all of those types of things that are just controlling the spend that's coming in and out of their business has really helped and changed specifically with these smaller businesses in the smaller market. 

[00:02:10] Tom: You know, as I think of that, and we'll talk more about the control side, there's the convenience side that I think many business owners want.

[00:02:18] And one example I think of when I think of a lack of control is when I went and visited a client. Our clients that we work with are remote, but I went to visit one. And so I went to their office and they're a tech firm that's pretty artistic, and moving fast was important to them, but their approach to the company credit card was, it was sitting in the general manager's desk, and if you needed it, you went to her desk and got the card.

[00:02:36] And she was surprised when she said that. And I had this kind of nonverbal reaction, like ‘What?’ We can do things quickly. And I said, ‘you have no control. People can use it for anything. And you get this really long bill at the end of the month. And you don't recognize charges.’ 

[00:02:48] You're, you've got 20 people who could have made the charge and you know, and so then they did implement something better than that, but it was just that they really went toward efficiency, but they had zero control over that piece. 

[00:02:59] Zac: Tom, you'd be surprised how often we see stuff like that, right? We talk with these big name businesses that have been around forever and they're still tracking their expenses by manually printing out papers and stapling a receipt to it so they can go give it to somebody. That is still alive and well with a lot of businesses. 

[00:03:21] Tom: I'll recognize the other side. So you could put in a really strong control, but then you do want efficiency.

[00:03:25] I mean, I will give them credit that they wanted to be able to move quickly. And if the alternative is you can't buy things or maybe everyone goes to the owner and says, can you buy something for me? That doesn't work well either. So there is a solution somewhere in there. 

[00:03:40] Zac: Yeah, absolutely. It all comes with trade offs, right? Do I want to kind of stamp out their artistic control and maybe they're in the groove, in the moment. They wanna be able to just go spend right away, or do I wanna lock it and they have to come and get permission from me in order to share the card.

[00:03:58] But then I would imagine on your side, when you're trying to reconcile at the end of the month and trying to figure out who spent what and why. All of that starts to be a headache back to the business owner for a decision that they made early on. And so the headache and the inefficiencies are just showing up somewhere else.

[00:04:14] Tom: That's a good point.When we talk about controls, well, let's talk a little bit about what we mean by controls because you brought up a second one that's good. Those are things categorized correctly. So as we try to explain to the owner, here's what happened to your money, having things in the right category is really valuable to do that.

[00:04:29] And so that is a control. The initial piece we talked about is more spend control. Are you spending on the right business things, are people taking advantage of your card and things like that. What other kinds of controls do you think of? And so kind of is it being spent and then categorizing correctly?

[00:04:46] Zac: When I think of the overall when somebody spends money on behalf of the business, right? There's controls in every part of it. The pre-approval side, do they have the budget to spend what they need to? And what they're gonna spend on, is that gonna be approved? And is it kind of like going towards what they're hoping to accomplish within the business?

[00:05:06] So I think that's kind of that preapproval side. Then you also need the control over the card itself. Like who has access to that card, who has access to that card number? If you're sharing a card, and somebody's like, oh, I am going to stick it in the desk drawer every time. I'm just gonna write down the card number information here on this sticky note.

[00:05:23] Or maybe I'm gonna just put that here in a Google or a Word doc. So I've got it where I can easily copy and paste it whenever I need to. So like actual physical control over the card. . And then the control is after the fact. And that's gonna be kind of where you're kind of used to asking for forgiveness rather than permission.

[00:05:44] Like that's where this kind of falls in, and where it's been historically with a lot of businesses, is after the fact, you're gonna go and find out did they stay within budget? Was it categorized correctly? Did that actually give us the ROI that we want? And so then there's gonna be controls for future spend that comes after once you've kind of already looked at what has been spent and why. 

[00:06:05] Tom: That's a really good point. I was thinking if you don't have a budget, then you've probably got an inefficient process of people asking for permission. But as a business owner, you can imagine maybe five people coming up during the day saying, Hey, can I spend X amount of dollars?

[00:06:20] And if you're the business owner now you're trying to keep track in your head, I assume. ‘What does this add up to and can I afford it?’ That's a very different piece than saying, ‘you've got a certain amount of budget to spend, you need to manage within that budget.’ Maybe a month in advance or a year in advance or something like 

[00:06:35] Zac: I'm sure you've seen this too, Tom, with a lot of the businesses that you work with when they're small and they're getting started, those are probably the controls that you want in place. You want to have a say in all of the money that's gonna get spent, because that's kind of your money, that's your investment that's going into it.

[00:06:54] But as you start to grow and scale, you want them to kind of take a step back and kind of do more of that long-term vision, that long term thinking. And as they start bringing in more people to kind of help run the business, you also need a way to be able to decentralize some of that, and empower your team your employees, to make the right decisions because they've bought into your vision, and they're bought into where you're going as a company.

[00:07:18] Tom: Jake, you played the role of CFO before. One of the challenges I've had, and I'm curious how you may address this if you didn't have a solution like Divvy, is as the companies get bigger, you come up with a plan for the year, and so I've got this whole income statement.

[00:07:32] Everyone's happy, and then they start saying, okay, can you give my department leads these budgets to manage? Can you talk a little bit about that? That's been a bit of a challenge to kind of help people understand how they would break that apart and monitor it.

[00:07:48] Jake: The way that I've tackled that in the past is exactly what Zac mentioned earlier, like Excel sheets and Google sheets. That became very much after the fact of, here's your budget for the marketing department. We'll load it in after the fact, once we have everything reconciled with actual spend, and have an Excel sheet that gives people the ability to plan out some future spends.

[00:08:16] But it's always outta date. And as you get larger and larger companies, that can become a very big issue very quickly if you don't have a software solution that can real-time manage against those budgets. In the past, that’s how I tackled that. Going forward, it's using Divvy to help set up those budgets and have those parameters assigned to who's responsible for those budgets.

[00:08:45] The business owners know going into the year that it's not gonna get overspent unless they go in. 

[00:08:53] Tom: It's kind of hard when the year's set out, but of course the year doesn't go as you have planned. So if part way through the year they're not doing as well and they want to reduce spinning in a certain area, that whole process sort of repeats where you go and change everyone's budget and go through.

[00:09:07] And if it's inefficient from the beginning, then it just makes it that much harder to try to do that, to keep all those pieces kind of to churn and stay connected.

[00:09:18] Jake: One thing I was kind of writing a note on when you guys were talking about controls earlier, from my role as director of technology, I'm always kind of thinking about the security side of things. Zach brought up the good point of, where is the control of the actual card number?

[00:09:33] I think not only do you have to worry about that with your internal employees, in today's day and age, you have to also worry about the vendors that you're giving the card information to and are their security parameters gonna actually secure it, not abuse it, and not have a data?

[00:09:54] Having something like Divvy where you can spin up virtual cards and apply those to each individual software vendor is great. I know Zac can talk a little bit more about that, but that's another huge control area. In today's day and age, it's really important to have control over who has the cards.

[00:10:13] Tom: That’s a great benefit, especially for the example of the company that was using one main card; they probably had another card, but if you really were relying on one card and it gets shut down, you're in trouble. But also, if someone's spending when they shouldn't be,  that's your problem, too.

[00:10:26] Zac, it feels like we're teasing our way around. You're from Divvy. If you had something like Divvy, do you wanna tell us, for people who don't know about Divvy, you wanna give us an overview of what the solution provides and then we can talk through how it can meet some solutions? 

Zac: I’m going to share my screen. So let me kind of walk through a little overview of Divvy, specifically around some of the controls that we have in place.

[00:11:08] When I think about Divvy, this is where I kind of like to start. We are a tech company. We're a software company first, and then we found out that we had to tie a card into it. And so when you think of Divvy, it's all three of these things. It's the web application, it's the mobile application, it's the Divvy Smart credit card as well.

[00:11:31] Now what's nice about this is it's one integrated solution. You don't have to go find a card solution and then buy a software to lay over the top of it and then vice versa. You don't need to find a software that you really like and then have to go find a card that might work with it. And so by having all of this into one solution, it’s going to help minimize the amount of time but also it's gonna increase the amount of controls that you have and the ability you've got to just do stuff on your own, without having to rely on calling into a bank or something like that. 

And so when I think about Divvy as a whole, this is what the software is. Now kind of diving into a little bit about what the software can do is it's all about trying to reduce inefficiencies, right?

[00:12:19] When we think about these financial stacks, and, Jake, I know you and I have talked about this a lot, those typical systems, they're very good at wasting time and energy, and then also just kind of pushing out when you can actually close the month. 

Jake, with the different technologies and things that you've worked with, have you seen that this has been an issue?  With a lot of the businesses you guys initially start working with, how have you kind of seen that? Just being able to tie up and getting things closed out. 

[00:12:52] Jake: That can be one of the hardest and most frustrating things for us on the accounting side. Working with companies is just the simple item of understanding what an expense was for, where it needs to get categorized in the books, what budget is that hitting, you know, all those things.

[00:13:16] Not having the visibility into the actual expenses as we work remotely with all of our clients. You know, we're not there in the office where we can kind of go talk to people. That can be one of the most frustrating things that we experience–waiting to understand what an expense was for and using a solution, like Divvy.

[00:13:36] You know, having that software combined with the card, it makes. As easy as possible for, you know, the actual cardholders, the actual spenders, to get notified immediately when they swipe their card, when they have a transaction that they need to go categorize it, you know, make sure it's hitting the right bucket.

[00:13:53] And at that point it can sink, you know, right into our accounting platform. And so what can go from two, three week delays after a month is done for us to like, get things closed out, get the books finalized, can be done. You know, from a credit card standpoint, that can be done two days, one day after the month is over because people are getting in the habit of real-time categorization of their expenses.

[00:14:17] Tom: You mentioned the real time. I mean, Jake, when you and I had lunch on their way to St. Louis, at the lunch table you were categorizing it. So it's kinda nice to walk away and say it's done within 30 seconds. 

[00:14:32] Jake: Yeah, there's no excuse anymore when you have the software combined with the card. Other solutions where you have the example of, you found a software, but then you have to stack a card into it. Sometimes there's a two, three day delay from when the transactions actually sink into the software and then it's like, oh, I misplaced the receipt. I'll put that in there later.

[00:14:52] By having it real time, it is truly immediate. As soon as that card is swiped, you're getting a notification on your phone to make sure that that gets categorized, and people get in the habit of getting that handled so much faster, and it becomes so much more seamless for us on the accounting side. too.

[00:15:15] Tom: My worst client, I was just reviewing today. It's delaying our financial statements, but they're still finishing some things from July; they're chasing people down, and so we've been pushing them. The problem is, if it's a really big expense, Their results are gonna change.

[00:15:28] And that's frustrating. And I just have to believe that that two or three day delay that you mentioned could have been fixed. When you're buying it, do it there. And then I don't have to keep chasing you down to go figure out. I can imagine people looking back at August probably don't remember exactly what they were doing because they’re trying to tag it to the specific job or category and they get very specific.

[00:15:51] Zac: Exactly. Like empowering that employee at the time of purchase when it's top of mind, right? You're gonna increase your accuracy, increase your actual completion rates when they can do it then. As you guys were talking about going to lunch in St. Louis, it just made me think about this. I used to have this one specific pocket in my backpack that I would use to store all of my receipts anytime I travel.

[00:16:14] And the amount of times that I have lost receipts out of that one special pocket, and then I go to reconcile my credit card statement and I'm like, oh, well this was a business expense, but I have no idea where that receipt is. So either as an employee, I have to eat it or I have to give my finance and accounting team a heart attack, hoping that transaction doesn't get audited because I just had to sign a paper saying that this was a business expense, but I don't have the receipt for it. 

[00:16:38] Tom: That's a good point. So then you're gonna say you would take a picture of it, right? If you had it integrate your app, you take a picture and then you don't need to keep the piece of paper any longer.

[00:17:18] Zac: Now the only other thing I wanted to mention about Divvy, because I feel like you guys hit on the control side, you hit on the real-time side really well. The other like big pillar of benefit I feel with Divvy is that this is a no-cost solution to to your clients or to anybody really because we make our revenue the same way someone like Visa or American Express does; when you actually use the Divvy card and you swipe that card, we get a portion of that credit card fee that comes back.

[00:17:53] So, it's a way that you can give these controls, you can give this efficiency to your team without having to add additional burden onto you, which is fantastic for these newer businesses and these smaller businesses of being able to have access to these great tools without having to pay an arm and a leg for it.

[00:18:11] Tom: Yeah, that's a great point. And so when you're saying no cost to you, that would be, you can get a physical card, right? I have a physical card, and then you have access to the website. And I think we'll talk about virtual cards, but they have an account where they can create virtual cards.

[00:18:25] Zac: Exactly, and that's where I kind of wanted to jump in here next was kind of like highlighting these two different ways that you can spend, right? So you've got your Divvy smart card, and then we've also got these things that are called virtual. We're actually the preferred partner of cpa.com for expense management, and we've been doing some webinar series specifically around virtual cards because they're relatively new to the market. 

And just kind of some of the best practices that we've started to see around virtual cards. And I kind of wanted to highlight a little bit of those with you guys today. So one of the biggest things that we've seen, and, and, Tom, I'm sure your client that you went and visited, I'm sure this is exactly how they were set up.

[00:19:10] They had one card. Anytime they needed a subscription, anytime they needed to buy something from a specific vendor, they would go get that card and they would go and use that card. Now, what we've seen a lot with that system is that there's overcharge. So sometimes they double charge you for something and both of those charges go through.

[00:19:32] But because that card has such a high limit on it, it has no problem processing and clearing. And then it's up to you to go fight to get that back. We've seen where vendors kind of do this thing called vendor creep, where they just add a small portion to your recurring subscription, and you don't really have visibility into it because it's going to that one card with a high limit and it goes through.

[00:19:56] Then we also have that issue of maybe there was that data breach, something like Jake talked about earlier, either from an employee side or from a vendor side. You now have to cancel that card, get a new card, and you're gonna have to reissue every single subscription that's on that card.

[00:20:14] So with a solution like Divvy, what we do is we offer you the ability to build as many virtual cards as you'd like within your platform. And so our best practice is to build that one-to-one relationship with your individual vendors. So for example, HubSpot, Facebook, Google.

[00:20:33] If for whatever reason we were advertising through Facebook and Google and we decided we wanted to stop one of them, then I can go and I can cancel that card. I can set that limit to zero. I can do whatever I need to with that card, and it's not gonna affect the relationship with any of my other vendors.

[00:20:53] I remember when I was doing some implementation, we had got a list of the recurring subscriptions from one of their clients, and they had been spending about like $6 a month using MailChimp. And we went and built that card and we were trying to decide who we needed to assign it to so they could renew that subscription.

[00:21:12] And one of the owners of the business was like, we haven't used that service in like four years. And they had no idea because it was just a very small amount that was going on the card that was getting reconciled each and every month, that small, tiny amount. And so just bringing that control, that visibility into these types of recurring transactions just really helps everybody across all parts of the business.

[00:21:38] Tom: I was gonna make that point, Zac, that it's so easy when subscriptions are sitting on cards that no one ever reviews. And so just if you had an individual card that you're saying, okay, I need to put a budget on there, at least as you go say, are we still using that? because sometimes they're not.

[00:21:51] You just add that up over years. But even if it's a couple hundred dollars, that's going on and saying, you know, is this company losing five, 10, $15,000 a year across multiple subscriptions? And they would like not to be spending that. 

[00:22:05] Zac: Yeah. And then the other two big features that I also like bringing up about these is the ability to do one-time use cards. Where we've seen specifically, like when we think about supply chain, right. That's been crazy. And sometimes you're buying stuff from vendors that you normally haven't purchased stuff from. Maybe it's new, but they just show availability and you needed it right then and there.

[00:22:30] And so you have the ability to make a virtual card, let it be a single-use card that you're gonna use only for the time that you're gonna make this one single purchase. And then it's gonna auto delete. and so you purchase something from this unknown vendor, and you don't have to worry about them compromising your card or trying to charge your card again.

[00:22:51] All of those types of things you're able to do with these kinds of single, one-time use cards.

[00:22:55] Tom:  I've used that for the one client that you and I worked on, Zac, and it was their admin who has her own card and she doesn't have a very high balance. Well, they did a company retreat and the deposit she put down was like $50,000.

[00:23:06] And she was trying to figure out how to pay for it. And the one-time use card was really nice because the alternative was probably to get the owner's card and now you've got him giving out his number, which he didn't wanna do, or maybe call a credit card company, which can take a long time. And this was probably like a five minute thing.

[00:23:19] And it was so nice because, in this case, she thought this was something really hard. Like, Hey, how can we do this? And it was nice to shoot her back a quick slack and say, I just created a virtual card under your name. Just give them this number. And it was really nice and easy, and then you're not worried that now she doesn't have a $50,000 limp to spend on other things.

[00:23:34] That card's done. and she's finished with it. 

[00:23:38] Zac: Absolutely. So you're giving that control, you're kind of empowering them to do their job, but you've also got the reassurance on your end that they no longer have that recurring limit. That's not an exposure for the business that's gonna last more than just that one time.

[00:23:57] Tom: Can we talk a little bit about budgets? So the flexibility, control budgets. For example, Jake plans a budget. He turns around to me and says, okay, you're in marketing, you get $15,000. Well that's probably not the amount that I have all year to spend.

[00:24:11] I'm just curious about how that works and also when we decide that number changes, how that actually happens and how quickly? 

[00:24:19] Zac: So let me kind of talk about budgets in two ways. First about a year and a half ago, Divvy was actually acquired by a company called bill.com.

[00:24:29] They've since gone through a name change and now we're just called Bill. Which is pretty interesting because there's a lot of people named Bill that we work with, and so they feel like we're just kind of talking directly to them. But, between them, and some of the acquisitions they've made, they now have the ability to bring your AP, your AR, and your expenses all into one platform. And so we're really excited because we're kind of in the final stages of being able to release what that looks like. But being able to see the full financial picture of a company from one dashboard is something we're all really excited about. And so when we think about budgets, that's gonna include your credit card expenses.

[00:25:08] That's gonna include your reimbursements. That's also gonna include your invoices and having one place to be able to see all of that. You'll literally be able to take your annual budget that you just made, put that into a system, and they will be able to track that from all of their expenses that come out of that. So that's something that we're really excited about.

[00:25:28] Tom:  Yeah, I hadn't heard about that. So then obviously include your AP invoices. So where you may feel like, we'll learn a little bit more about budgets, but these cards I've got great control over. And you're saying that same control is over that kind of a spend area?

[00:25:41] Zac: Yep, exactly. So all the admin and efficiency work that you got from Bill and that you got from Divvy, we're gonna be able to combine those into one. Divvy as it is right now, we also have a function called budgets where we can allocate specific amounts of credit or spending power to individuals or to departments.

[00:26:03] And so what's nice about this, and I know Jake and I have been talking about this a lot, one of the things that we talked about was employee incentive. And some of these employee incentives like technology or purchasing equipment from working at home or these health benefits because you're no longer in the office.

[00:26:23] You wanna give employees these types of benefits to go through and, and just be, it is just a nice part of working for that company, right? Kind of some of these fringe benefits, you have the ability to give them access to what they need for that individual section. But that's also separate from any normal spend that they're gonna do for the business.

[00:26:45] So like if you've got somebody in your marketing team that's running ads, you still wanna give them those same incentives that they can put on that company card. But then they also need a way that they can kind of segment or section off that spend for their marketing spend or their advertising that they're doing.

[00:27:02] So having a way to segment that all within one platform is how Divvy does this through what we call Budget. And with budgets, they're really nice because you're able to kind of like, if you think about it like the, the good old envelope accounting that you teach your kids and everything first is like, here's your allowance.

[00:27:19] Now how are you gonna split this up into your envelope so you have enough money to spend where you need it? And that's really kind of like the mentality behind the budgets within Divvy. So if we think about people that spend similarly, or we think about departments, we may want to have sales.

[00:27:36] And we go and we set aside some money that we say this is gonna be for our sales team, this is our marketing team, this is our finance and accounting team. And we can segment these out into individual budgets. And then as a finance team, you can say, okay, sales team, you have $15,000 this month to be able to go and spend.

[00:27:54] And you know, within a system like Divvy, that's gonna be their limit. They can't go over that. The system won't allow them. But then you also can take a step back and say, I don't have to manage the day-to-day transactions, or say, employee A needs a thousand dollars of that 15, but employee B only needs 700.

[00:28:13] Like let the managers and the department heads that are really in that day to day, let them be the stewards over those types of funds. We see it a lot in places like ministry or non-profit space. They want their department heads or their program manager to run their programs and just have a system where they know they're gonna have to stay within budget.

[00:28:33] And so that's kind of the power that Divvy's able to provide within these types of budgets. 

[00:28:39] Tom: I can see the virtual nature of one of the things you mentioned. So most people would probably balk at saying, well, you're gonna have four different physical cards you're gonna carry around, right.

[00:28:47] And here's your personal one, but make sure you use this one for a different kind of thing. And this one you're saying you don't have to do it that way? 

[00:28:53] Zac: No, you can manage that all through the software with one card. 

[00:28:55] Tom: And then the idea of giving a leader in the organization to say, in my example, I got $15,000. I can give that to four employees and portion that out the way that it needs to be done. 

[00:29:07] Zac: And so all of that power comes to you as the manager. And so you're gonna be responsible for your budget, you're gonna be responsible for how you allocate that out, and then you can give it to your employees in real time without having to go back to the finance team and say, actually, employee A, I thought I needed a thousand dollars for him.

[00:29:28] I actually needed $2,000. You can just do that through the app. You don't have to go back and get that allocated from somebody else. 

[00:29:37] Tom: The one example that we had, because you mentioned working from home, the client that you and I worked on, they decided for people working from home, they wanted to give them $200 a month for whatever home office needs.

[00:29:47] Our company does the same thing. One thing I love about that solution, and we had told the owners early on this way, you get out of people coming and saying, is it okay if I buy an office chair, a monitor, or something like that? There's guidelines that they use on business purposes, but in general, you don't care.

[00:30:01] You get your 200, and I'd use the example for if I think like a $2,000 camera. For my Zoom meetings it is important. The owners of company's like you get your 200 a month. I mean, if that's what you choose to spend it on. Okay. Other people are spending in different ways. The thing that we really liked about Divvy is it was really easy to, at the beginning of the month, add 200 to everyone's cards and they made some decisions, like one person needed a new computer, so they gave 'em like an upfront, so they went on an exceptions list.

[00:30:26] That was really easy to say, okay, I can skip them, or their amounts a different amount. And it was really nice and the employees liked that. I didn't like them using this term, but they had employees that would say their favorite perk about the company was sort of the Divvy card with that $200 a month.

[00:30:40] I was usually sort of the accountant, like, it's not a perk, it's a business expensive thing, but it's just, they have this flexibility.

[00:30:56] Zac: And you think about the effort put in from the company standpoint, right? Like the company wants to have them have the right tools to do their job, but then you think about it from the employee's standpoint of how much the company trusts me to make the right decision with these funds to help me to adequately do my job.

[00:31:14] And so like you feel a lot more empowered as an employee when you get that, too. And you're not having to go, just, I need to go talk to the CFO every time I want to purchase a new battery for my keyboard. You kind of got away from that because the company trusted them and, and historically they might not have gotten a card.

[00:31:32] And so now with a system like Divvy, we can give a card to anyone. because you get to set the limit on it, you could set it to $0 and essentially have it be a piece of plastic, right? And, and so until you actually fund the card, they can't go and purchase anything and there's not that additional exposure to the company.

[00:31:51] Tom: And the nice thing for the company deciding this, cause I've heard, I can't remember whose credit with this, make one decision instead of hundreds, they made one decision if you get this much per month and they don't have everyone, some request process for people asking for all the individual things they want to purchase and someone trying to be that gatekeeper.

[00:32:07] So having a solution where that can be done easily is really valuable. So what about the remote you talked about during the pandemic, so I'm curious what have we seen changing as now we have more people working from home, at least some of the time, and also more people working remotely all of the time.

[00:32:24] How have you seen this sort of challenge become bigger or the solutions or what's different because that's been happening the last couple years? 

[00:32:31] Zac: Yeah, so I would say kind of twofold. One, I mean, we kind of hit on it with these fringe benefits, right? We used to love getting together as teams and doing team activities or team meals specifically.

[00:32:43] Right? And so in a remote workforce, it's a lot more difficult to do those types of things. And so a solution like Divvy where you can just say, Hey, I'm gonna give everybody on my team 20 bucks to go and DoorDash some food, or go buy your own food and then we're gonna get onto a video call and we're gonna just eat together and, and hang out as though we were in the office.

[00:33:05] And so then you're very quickly and easily able to adjust people's limits on their cards to be able to do that type of stuff. So that's one of the sides of it. Now, the second side is, and we kind of hit on this, I saw this a lot with new employees when they needed to get equipment. because you used to walk down to your IT department and they would set you up with a computer.

[00:33:29] They would give you all of the stuff that you would need on day one when you walked into the building, like they would set you up with a workspace. That's not really the case anymore. Now day one that an employee starts, we can make one of those virtual cards for them in no time, give them access to that card so they can go start purchasing the stuff that they need to adequately do their.

[00:33:51] You're not having to wait until they register and then fill out a new credit application and then submit for a card within the bank and have it processed within a week. Like you're not, you're not waiting two weeks for somebody to start their job. And so you can, with the use of those virtual cards, you can get them access to funds immediately so they can start doing their job from day one.

[00:34:12] Tom: That's cool. The frustration of people when you start a job, if you don't have the technology or don't feel like you're set up correctly, that can feel like a really big lift and you're trying to come and make a good impression. And it's also risky if you send a physical card, say you send it a couple weeks before someone's an employee because you wanna make sure they get there.

[00:34:29] Where there are cases where people never become an employee. Now you've got a card out there with balance on it and maybe a headache in front. 

[00:34:36] Zac: Or a two hour call with a bank to try to get that card canceled or the limit dropped. All of those headaches that come with working with those types of bigger organizations.

[00:34:48] Tom: Are there caveats or anything we should talk about? Are there things to say, Hey, there are things that people should be aware of if they're coming into?

[00:35:03] Zac: Yeah, absolutely. So, we kind of talked about it originally, right? Like Divvy monetizes by using their credit card. Yep. And so we built our system around that and you do have to use the Divvy cards. There's a little bit of a change management process that happens with that, but the benefits that come from it greatly outweigh that minor inconvenience.

[00:35:25] Having the ability to see it in real time, rather than two or three days later, like we talked about. Right? Having the ability to force the employee and remind the employee to code their transactions in order to be able to do that. 

Being able to turn a card on or off and just like if an employee leaves being able to freeze the card or like having the ability to say company wide, we need to be a lot more stringent on our spend.

[00:35:53] And being able to ramp that down within seconds. All of that stuff is only possible if you're using a smart card that's tied within the software. If people are using their own cards, you don't really have a way to control that. And, then you're gonna have upset employees if they're thinking that they bought something that was within policy, but then you changed, and they're having to try to work through a reimbursement.

[00:36:16] We just wanna try to alleviate a lot of that concern. Now there are some things that are just going to happen, like either mistakes or mileage or you have to pay cash for–something you do have those types of expenses and Divvy does have a reimbursement module that we can add on that falls directly within those budgets as well.

[00:36:36] I would just say it's not designed to be a bring your own card type solution and so it would get really annoying really fast because it's not built for that. It's more built for those types of one-off solutions. 

[00:36:48] Tom: But if you are an existing Expensify user, Expensify is a good solution, but if you switch to Divvy, you're saying you don't have to keep both?

[00:36:56] If you end up with someone saying, okay, you paid cash for something, or had car mileage or something like that, you can say you can turn those. And what you're saying is, it's a somewhat incidental thing? Not every single expense goes through this system. Correct? But it's nice to have one place.

[00:37:19] Zac: Yep. Most of what you had goes on the card and every once in a while you had something. Now there is one other thing, Tom, I do wanna kind of highlight around people that use Divvy, we had mentioned this client that you and I worked with together and the primary reason why we signed up for Divvy was so that they could do like those fringe benefits and have a solution for that. We see a lot of people that come to Divvy for a specific use case. Maybe you really want to use virtual cards and you're gonna kind of run it in tandem with other solutions.

[00:37:49] That is no problem at all for us. If you want to use a specific department or a specific feature of Divvy and you're gonna use it in tandem with your other solution, great. The one thing I'll tell you is it's gonna just grow because Divvy is so easy, it's so convenient to have it all in one place, that if we start there, we're gonna grow into other parts of your business to try to consolidate it into one.

[00:38:11] Because that's exactly what we saw with the client that you and I worked on through implementation; we started with one specific use. But then because of how easy and convenient it was, how much the employees liked it, we just started bringing more and more of the company over until we consolidated 100% of it there.

[00:38:27] It doesn't have to be a rip and replace, although we're fine doing it that way, too. It doesn't have to be that way in order to come and start using the solution.

[00:38:34] Tom: I remember earlier on, the owner didn't want to give up his personal card that he was using and he had his reasons. Then it grew, and so you guys were very flexible. With that. Jake, were you starting to say something before it? 

[00:38:52] Jake: The only other like thing that I hear and want you to weigh in on, Zac, that people bring up when kind of looking at Divvy, part of like what you just mentioned is, it doesn't have to be an all or nothing, and also the rewards piece of it.

[00:39:06] Can you kind of just touch on how the rewards work with Divvy and how you guys feel as you've done hundreds of thousands of implementations; how does that compare to some other reward platforms you see out there?

[00:39:16] Zac: Perfect. We actually hired the same consultant that American Express used to build out their platform for points and rewards, so it's gonna be very similar to the American Express Business Platinum Card. The same points that you're gonna start to accumulate and then you can use those points to redeem for travel or cash back, or gift cards or statements. That's actually something that I've seen a lot recently with like a lot of the non-profits that are using Divvy. They love that they can redeem their reward points for gift cards because they use that for employee incentives.

[00:39:52] So that way they're not having to use their grant funds or what they're doing to try to progress their social mission. They don't have to use those funds to incentivize their employees. They can use their credit card reward points. And historically, if you've been going through the reimbursement, employees are getting all of those rewards for the company spend. 

They're getting them for themselves personally, and so a lot of the companies like being able to consolidate that. So the company is getting rewarded for their spending. And then they're able to turn around and use those rewards to progress their company or to progress their vision.

[00:40:27] They can use it for employee incentives. They could use it to maybe purchase something else for the office or purchase other stuff. They can just take it as cash back to be able to use it to grow the company. So being able to consolidate that all in and having one dashboard to be able to do that just empowers the company to make those smarter decisions.

[00:40:47] Tom: That makes a lot of sense. Anything, Zac, that you were hoping that we would cover that we haven't had a chance to get to today 

[00:40:52] Zac: We've kind of gone through a lot of what Divvy has to offer. Divvy is not the only solution that's out there. So as you're kind of looking for and comparing different solutions, these are just a few of the best practices that we talked about because ultimately we want you guys to be a smarter business.

[00:41:13] Now, the benefit that you're going to gain with a solution like Divvy is the fact that we were also a part of Bill, right? And so being able to, as far as I know, we're the only one in the software area that's going to be combining AP and expenses with AR all in one PO position as well as we have been.

[00:41:34] Bill's been around for about 13 years. Divvy's been around for six and kind of combining those best practices and industry leading into one software is gonna be something that's gonna be very helpful. We're also part of a publicly traded company. And so you don't have to worry about us being a tech startup that may or may not be around in a year or so.

[00:41:55] So as you kind of are building out and starting a solution that you want to be there with you in the long run and being able to grow and scale with you, that's what we're able to offer with solutions like Bill and Divvy and they're very modular. Divvy is free, and Bill is part of a subscription.

[00:42:11] And so as you grow and need more of that help within your business, then you can start to add and layer on those additional solutions as they're needed. 

[00:42:21] Tom: That's really helpful to know. If this sounds interesting to people listening, it's free and you can start small.

[00:42:28] That should help people say, okay, there's a pretty low risk in taking that first step and saying, do I put this in place for some things and see if it works? And then how does it grow within that? And I know many times kind of, ‘should we switch the way we use credit cards or the credit card we use?’ 

[00:42:44] That can be a big deal. And you're saying it doesn't have to be. Let's give this a try and let this get used. And I can say for the ones that we did do full replacement in two clients and it was a really easy implementation. So it's not hard. If you wanna say, I wanna replace all of them, it's just if you're feeling like you wanna put your toe in the water, there's an easy way to do that. 

[00:43:00] Zac: Tom, do you remember how much you spent on the implementation support when I was there helping you? 

[00:43:05] Tom: We didn't spend anything on it. It was free.

[00:43:08] Zac: Yes. Right. So that's the other kind of unique thing with us; we only make money when you choose to spend it on the Divvy card, right? And so we offer implementation support as well as customer service support for any person that's on the Divvy platform.

[00:43:23] And all that is free of charge. We need you to like the system enough to continue to use it. And because that's the only way that we are gonna grow as a company and that we start to see our revenue as well. 

[00:43:33] Tom: Our implementation that you did with us was very simple. The second one we did was also simple, except that they wanted to do budgeting.

[00:43:39] And when I started getting questions from the directors of how the Divvy platform worked, the implementation was nice because we scheduled a call with someone similar to your role and he walked them through and they had tons of questions, including back to the owner, ‘Hey, how are you gonna give us our budget and stuff?’

[00:43:53] But it came on the screen saying you do this. And it was just nice that it was done and I didn't feel like I had to step in and learn, and it wasn't hard to learn, but when you wanna turn and teach and act like you know something in front of people you put in this time and it was nice to just say, I'll bring in a resource to do that.

[00:44:08] So yeah, I forgot that, that's how we did the implementation. Zac, thank you very much. Hopefully this is really helpful for people to learn about this and what we have in control, traditional things, and how Divvy can be a solution in that process. Great. Thanks very much. Enjoy this podcast. 


Empower Spending Using Simple Controls with Zac Heinz


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