Distributed Spend Management with Andrew Hoag of TeamPay | Soar Payments LLC
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Distributed Spend Management with Andrew Hoag of TeamPay

When it comes to expense tracking and spend management tech companies often have stronger awareness and control over their code than they do their money. In this episode we sat down with Andrew Hoag, CEO of Teampay to explore the topic and discuss the ways transparency and tech efficiencies in spend management are crucial.

Payments & Fintech Insights In This Episode

  • Why automating payment efficiencies is so important.
  • How applying tech to a previously bureaucratic problem improves bottom line.
  • The positive impact of easing the expense tracking process for employees.
  • How to determine the right level of expense approval and tracking process for different sized companies.
  • And so much more!

Featured on the Show

Episode Transcript

Heather: Hi, everyone. Welcome to PayPod, I’m your host, Heather Bodie. And today we’re going to be discussing distributed spend management. Joining me to explore this topic is Andrew Hoag, the CEO, and founder of Teampay, software that requests, approves, and tracks company spending in real-time. Andrew, welcome to the show.

Andrew: Thank you so much. Happy to be here.

Heather: I wanna start by exploring your career path in FinTech. I know Teampay is not your first venture. How did you get into the industry, and what led you to this point?

Andrew: Yeah. I mean, it’s interesting because I didn’t come necessarily from the finance FinTech world. The origin story of Teampay was really interesting for me because I basically had experienced the problem. And the problem being that I had worked in operating companies and constantly was either chasing people down to make a purchase or if somebody made a purchase, I was chasing them down to tell me what it is and why they made that purchase. And just felt, like, there had to be a better way. One of the realizations I had as an operator and founder is that most software companies have better control over their source code than they do their money. And I just felt like that was an obvious opportunity. So got really interested in FinTech. You know, I know we’ll talk about it throughout the podcast, but in general, it really started with me just scratching my own itch of, “There’s gotta be a better way.”

Heather: Okay. Let’s talk Teampay specifically. Why is automating that process of requests, approvals, tracking, why is it so important? And you just spoke to what drew you to it, but can you give us in more detail, how Teampay specifically creates those efficiencies? And why it’s so effective for your customers?

Andrew: Yeah. I mean, I’ll start with the why it’s important question first, right? Which is, I’ve been doing this long enough that when I started my career…and I think for people who are early in their careers, this sounds crazy, but if I went out and bought a piece of software to use at work, I would be fired. And what’s happened over the last 10 to 15 years is that every single employee in our company is now part of the procurement team. And yet what we realized early on is that companies are still trying to solve this problem with 15, 20-year-old technology. And if you think about innovation in employee spend and expense management, really innovation has been taking a picture of a receipt instead of stapling it to a piece of paper. And so there’s just a massive opportunity there for us. And when you start to think about how you can better solve that problem for customers, it ends up being a workflow problem, a business process problem, right?

Am I supposed to buy this? Did the right people sign off on it? And am I buying it in the right place? And software is really good at business process and workflow problems. If we use humans to solve them, we call it bureaucracy, and if we use software to solve it, you know, we call it magic. So I really like the idea of applying technology to what historically was a bureaucratic problem. Started my career at NASA, and I can assure you that I understand how government procurement works in the hard way. And I think our ability to offer that to modern companies today with a delightful experience for the employees is what makes Teampay so successful.

Heather: It was really funny to me to hear you say that we call it bureaucracy. I mean, I think the component that, like you said, differentiates software usage from bureaucracy is that human element, right, that human nature, the fact that we are not robots. And so oftentimes it becomes this sort of sticky, long, complicated process because you have the inevitable element of human error and human behavior that comes into play, where a software sort of automates that and makes it, like you said, more of a process and magical, if you will. Can you walk us through the process of becoming a customer of Teampay? What does that onboarding look like?

Andrew: Yeah. So, onboarding customers. We found that there’s varying levels of sophistication depending on size of company and how sophisticated their finance team is, how fast they’ve been growing. How much they actually pay attention to this, right? Certainly, in eras where capital has been free, companies don’t really care about what’s being spent, their goal is just to go faster. So some customers will come to us and they will have no process. They’re like, “We don’t know, what should we do?” And we can use our experience across a bunch of other clients and at this point now, we’ve seen every kind of combination and scenario from companies about to go public that are sharing a corporate credit card with 800 people, to companies that are 40 or 50 people and have a three-step approval process and everything in between. So usually, we can kind of help customers figure out what’s the right level of approval and process for them.

And then some customers already have that baked in. They’re doing it in email, they’re doing it in spreadsheets, and they’re trying to map that into Teampay. So really, it’s in the customer’s decision about, “How do I wanna set up my process?” The software is infinitely configurable along that. So we’ve been able to support every single request that customers come to us with and configuring their process. And then we tie into their existing business systems, which could be their HR system or their accounting system to give us good data. So you’re not replicating, you’re not forcing people to log in, or create an account on yet another system, we just integrate into their existing environment, which allows us to get up and running and off to the races very quickly.

We’ve had even medium to large customers, 500,000 employees, be up and running on Teampay in a matter of days. But probably most customers, it takes a few weeks to kind of work through those decisions and get the systems configured and all synced up. But that’s what allows us to really support companies at scale. So the customers are excited to do it. And compared to some of the legacy software, which is measured in months or even fractions of years, that’s definitely best in class. And I think that’s just a modern expectation of today’s market when they’re onboarding new technology, they wanna get up and going yesterday.

Heather: Absolutely. Let’s peel back the onion a little bit on the different components. I wanna talk about requests, approvals, and tracking, right? Let’s dig into those three components of the distributed spend management system. Why is each individual component important? And the reason I wanna say this is because of what you just mentioned, you know, these companies that are about to go public and are like, “Ugh, we don’t have a system. We’re all using the same company credit card,” right? Why is that three-step…or maybe there’s more steps to it that I’m just not familiar with, but why is that process…each step of it so important?

Andrew: We have a couple of philosophies that we work from here with Teampay, right, which aligns with our customer values. We actually believe most employees are good actors, and they’re just trying to do the right thing. And when they don’t do the right thing, it’s not because of malintent, it’s because of lack of knowledge. So one of the things that Teampay does really well is this concept we call guided buying. So if you wanna buy an office chair, we can steer you into your corporate account with Amazon. And so now the finance team is happy, the procurement team is happy because you’re buying on your Amazon catalog, you’re buying with your Amazon discount, and the employee doesn’t even need to know that you have a business account with Amazon, it all just works behind the scenes. So capturing that spend and steering them to the right place is really important. And I think some customers have this knee-jerk reaction of, like, a permission-based process versus forgiveness, but that’s because most people’s experience with permission is bureaucracy. And it requires a cover on the TBS report, and four or five big to approve…

Heather: Right. It’s office space.

Andrew: Where in our case, permission can be given in an automated fashion, set up by the customer of here’s the policy for this. If you’re buying… Like, we have a policy where new employees get headphones, and they have a headphones stipend, and if they buy headphones, it’s automatically approved. And so you can set up automated approval policy, but what’s important then is if they wanna buy the headphones from Amazon, they actually go to our Amazon account, and we make sure that it’s done in the right place. And so, moving customers to that permission-based process ironically actually speeds up the whole cycle time for everyone involved because it can even be automated approved, or approved in less than 20 minutes. And then all of the data…and the last step that you were thinking about is the reconciliation part, we can do all the accounting in real-time, right?

And if we contrast that to the way companies have historically run, you go spend the money, and then 30 days to 45 days later, you tell the finance team what you bought, and they decide if you did it correctly. That’s a horrible experience for the employee and that’s a horrible experience for the finance team. And so moving to this better process actually helps the employees move faster. They know that they’re buying things in the right place, they know that they have the approval and nobody’s gonna come tell them later with an awkward conversation they did it the wrong way, and the company actually gets more agility out of it.

Heather: All right. Do you find yourself in a strategic role with your clients on occasion? I know I’m thinking of a specific case where an individual who runs in my circle works for a company where they’re in a position to use their own personal credit card for expenses and then apply for reimbursements. So that when those moments come up like you were talking about, where they request approval for something that maybe they spent “wrong,” or that didn’t qualify within approved expenses, then that just wasn’t included in their reimbursement. Do you find yourself talking to companies about shifting the way they have their employees function? Maybe integrating individual credit cards that are company-issued or some other system that I’m not familiar with?

Andrew: Yeah, no. We actually do allow companies to do reimbursements through Teampay. So if an employee needs to spend money on their own card, they’re more than welcome to do that. We give the company the option of where they wanna be on that dial, which I think is super important because every company has to deal with their own change management, they have to deal with their own culture. You know, for people that are road warriors, which is kind of the classic travel and expense use case, maybe they wanna keep the points or miles on their card, that’s no problem. And so Teampay supports that use case. But what we found over time is that because of this kind of virtual effect of, “Hey, I don’t have to worry about not getting reimbursed. Now I have the approval on the record,” the company is actually benefiting from this as well and it happens very quickly. More and more companies, right? They tend to steer more spend onto the spend management system as opposed to just handling reimbursements. And there’s a whole generation of employees coming up that don’t actually really value credit, and I think that’s easy for us to forget as relatively middle-class, white-collar professionals. There’s a class of employees now that are graduating from school. They don’t have credit cards, they don’t wanna owe the company money. And there’s also some diversity and inclusion problems with that as well that have been recently spoken about. So we actually find that companies that are more progressive in their thinking tend to use the spend management system to really drive that employee experience forward.

Heather: I’m really glad you brought that up. That was my number one question to that individual case I was talking about…was the thought that, at that time in my career when I encountered that person, I thought I can’t work for that company because I wouldn’t have the individual capacity on my own to actually put that amount of expenditure on an independent credit card, so…

Andrew: Yeah. We hear that all the time.

Heather: It’s fascinating.

Andrew: Early in my career, I had three months of salary outstanding from the company and they were gonna send me on another trip, and I walked into my CFO’s office and I’m like, “I am not getting on a plane until you pay me back.” My cards were maxed out and, you know, it was nice to keep track of the points but it was also very stressful because you never really know where the company’s finances are and if you’re gonna get paid back and all of that, and three months’ of salary was meaningful enough to me at that time that I needed to have that made whole.

Heather: Absolutely. I’m so glad you shared that. I wanna switch gears for a second and talk about security and privacy. If you are in a capacity where people are using their individual credit cards, but even when it comes to the business’s data, right? Our industry plays a key role in protecting both those consumers, the business data. What is Teampay’s philosophy when it comes to security?

Andrew: You know, we have dozens of public companies as customers and when you’re dealing with public companies’ money, you cannot move fast and break things. So, you know, it’s super important, right? We have a very, very robust security function. The product in and of itself delivers more security to our customers, and we’ve been thoughtful about that all the way through. And our customer’s data is our customer’s data. So there’s no marketing offers or anything that are being driven off of that, unlike some other companies. And so for us, you know, we really take that seriously. And the fact that we’ve been able to onboard public companies, I think speaks to that. We have our SOC 1 and our SOC 2 Type 2 certifications, we’re PCI compliant, all the usual buzzwords in that case. But I just…I think about the logos that use us for material purchases and that speaks for itself.

Heather: Aside from your own work building teams and products, you have historically been an angel investor and advisor to other companies. What qualities are you drawn to in a company that’s seeking investment?

Andrew: Yeah. So I think there’s a couple of things. I enjoy participating at the early stages. I’m not by any means a prolific angel, I’m pretty selective. And a lot of it… The very, very first question to me because I’m investing usually at the earliest stages, comes down to the people. The product is the thing that’s gonna change the most, the market will evolve over time, but you’re really investing in the people at that stage. So what I’m constantly looking for is, “Do I feel like this person has the grit to be successful?” Because founding a startup is basically a series of failures with rare moments of success that propel you forward. So, you know, is the person gritty enough? Do they have the intellectual horsepower to be able to work around the problem and the solution, as well as the flexibility and agility to adjust to the market, right? You can be super smart and rigid, and you’re gonna end up boxing yourself into a corner. So I look for that agility, mental agility, and flexibility, as well as just the grittiness. And then I tend to like to invest in things that I know, right? It’s, you know, what is that? Peter Drucker I believe, was the one who talked about that…of just things that are close to me, which include software and FinTech.

Heather: Right. Products that you love, that you utilize, that you know a lot about. Yeah.

Andrew: Even if I understand the market, right? There’s products I use that I don’t understand why I use them. Maybe Instagram is a good example of that. I can tell you my radar on the consumer side is probably the opposite and if I don’t bet on a consumer company, probably people should invest. But on the enterprise software side, I feel like I have a good nose for enterprise software and FinTech because it’s all about solving problems, and it’s a rational exercise in solving a problem, not an ego or Maslow hierarchy of needs exercise, which is most consumer companies.

Heather: I’m fascinated to hear you say that because I feel like both, moving my way through the Teampay website, but also looking through your profile on LinkedIn, I feel like your projects and your problem-solving passions all lie around this really human-centric, really, like, consumer-focused product area and that user experience. Like, I had a really easy time navigating your website and understanding what it is that you do and how you do it. So I don’t know…I’m just amused to hear you say that your own consumption is not to be trusted because I feel like your heart and brain are already there and hyper-focused on that human experience.

Andrew: Yeah, no. I appreciate that. I mean, I actually think about those as separate things, right? Just because you’re selling enterprise software, doesn’t mean you have to deliver a crappy experience. I’m a design geek, right? And I love aesthetics. I love architecture. I love, you know, modern design. So in my personal life, I love, like, clean lines. I love some of the stylistic things that Steve Jobs and Jony Ive did with the original iPhone and some of the choices they made, which were very counterintuitive. So I actually believe that part of my mission is marrying those two things of, taking a business problem, which historically has been handled with bureaucracy, and crappy workflows, and ugly blue screens, and solving it in a way that melds into the customer’s environment and actually feels delightful to use. So I would agree in that sense, I have a very strong consumer aesthetic and I think of everybody as a consumer. The role of technology in our lives has just been elevated across all of our applications and use cases, and I don’t believe that the workplace should be any place where we have to make sacrifices, nor should users be thrown under the bus.

Heather: Next for Teampay. Any exciting offerings, anything like projects or partnerships you’re working on, something you can, like, give us the inside scoop on?

Andrew: There’s a lot of things going on right now that I’m really excited about. We launched our Microsoft Teams integration. And we were the first monetized application in Slack probably, and definitely the first spend management application in Slack. We were first to get on Teams. Microsoft is…

Heather: Congratulations.

Andrew: Microsoft Teams is two to three times larger than Slack. I know Slack is very popular with tech and media, but Teams is used by, you know, most of the U.S. that does the rest of the work. And so we’re really excited about that opportunity for us, I think you’re gonna see some more announcements there. But we’ve already seen really great response because that’s another case. We’re bringing a consumer aesthetic out to a Microsoft Office user. Just feels refreshing and delightful, and we improve the quality of their experience with Microsoft, so I’m really excited about that. And we have a few other projects coming this year, which we haven’t announced yet, but are gonna be really game-changing for kind of that experiential side that we spoke about.

Heather: Well, we shall stay tuned. I wanna know, I wanna know. All right. It is time for us to wrap up our show. We have a segment we like to do at the end of every show, five questions, rapid-fire. Are you ready?

Andrew: I am as ready as I will be.

Heather: Great. All right. Here we go. Make a prediction about the changes in the immediate future of distributed spend management. Say the next 12 to 24 months, what are we gonna see?

Andrew: Yeah. I think it’s a continuation of the line we’ve already started, right? Which is, companies want a single system to manage any type of purchase, made by anywhere from anyone. And I think that’s where the puck is going there, and I think we’re gonna continue to see this be important for more and more customers, as they realize how much simpler their lives can be as opposed to managing a hodgepodge of systems.

Heather: What’s one cool piece of payment or finance-related technology you’ve come across recently that impressed you?

Andrew: I’m really interested in what’s happening with capital and financing solutions. On the consumer side, we’ve seen the buy now, pay later. Which is dressing up credit in a new form, and making credit more palatable to people who don’t like credit, so I think that’s super interesting. Then on the business side, I think companies like Pipe are doing really interesting things around invoice and B2B payments. So I think there’s gonna continue to be more innovation on the capital side and that’s something that we paid attention to as we continue to focus on payments.

Heather: In the next five years, most people will make a purchase with either Bitcoin, Apple Pay, or something else. Which one and why?

Andrew: I would probably say Apple Pay or some sort of token payment is dissolving into the fabric of our lives, right? And you’re no longer thinking about payment as this piece of plastic that I carry around in my pocket, or God forbid, this printed piece of paper that somebody said is worth something. And so I think embedding the payment part in our day-to-day lives and making it more invisible, is super interesting. What rails those run over, I don’t have a preference but, you know, if you think about like an Uber or an on-demand car experience, you don’t even think about the payment, and I think payment is just gonna continue to disappear.

Heather: What’s one piece of advice you have for someone considering FinTech as a career?

Andrew: Be prepared to go back to the future. So you will spend a bunch of time in the 1970s trying to build solutions for the 2020s.

Heather: Oh, fascinating. I’ve never heard anyone say that, I love that. All right, and then last but absolutely not least, the stumper. What’s the best business advice you’ve ever received, and from whom?

Andrew: Oh my gosh.

Heather: I know.

Andrew: It’s so clichéd. I hate referencing this, but I actually do find it valuable. My father was a PhD candidate in physics, and physics just comes as a natural aptitude for me. And so one of the ways that I approach problems, which I realized is a bit of a superpower is looking at things from first principles. And Elon Musk has made a lot of noise about breaking problems down into first principles. But I continue to think that that’s actually a really valuable skill. So, you know, I can attribute some of that to my dad, and some of that to Elon Musk I guess, for making it popular.

Heather: I love it. That does it. Andrew, thank you so much for joining us today. If folks wanna get in touch with you, or learn more about Teampay, where can they find you?

Andrew: Yeah. Feel free to reach out, www.teampay.co. And we’re always happy to hear from people and would love to connect with your readers, talk more, and geek out on payments and FinTech.

Heather: Thanks again, Andrew.

Andrew: Thanks, Heather.

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Teampay

Teampay’s distributed spend management platform gives you total control and visibility over spending, while empowering employees with purchasing power. We help companies focus their resources and growth, not overhead.