Spend management can encompass a lot of different processes, but some key points will be important to keep in mind as you plan for your Business Spend Management solution. First and foremost, you’ll want to look at the speed of the process and how it integrates with your existing business applications. You should also think about which business functions you want to include in your solution, such as procurement or invoicing, as well as the extent to which you need to collaborate with other business units or even third parties like contractors and vendors on the use of shared resources such as printers or office space.
What Is Business Spend Management
The purpose of Business Spend Management is to help increase profit and efficiency by managing all an organization’s procurement and expense activities. This information can also be used to make strategic sourcing decisions. This program encompasses more than just controlling spending; it looks at how an organization’s purchases, expenses, and assets are handled throughout its lifecycle. Business spending management manages both internal and external transactions, with internal transactions coming from vendors and external transactions stemming from customers or clients. This increases workflow efficiency, reduces costs through decreased duplication of work efforts, ensures standardized compliance across all operations, drives employee accountability for expenditures, and improves financial performance.
For example, one employee may overspend because she doesn’t understand where her money is going. Another may have trouble keeping track of expenses and staying on budget for travel and entertainment expenses. It considers how funds are allocated for purchasing purposes as well as how they are allocated for payment purposes. In a broad sense, Business Spend Management involves five primary areas: strategic sourcing contract lifecycle supplier performance measurement; collaborative procurement operations; and invoicing/accounts payable processing.
What Is A Spend Management Process?
Spend management is a unified set of business processes, supported by software, that encompasses procurement, invoice management, and expense management all the ways employees spend money as well as the related processes of contract lifecycle management. Spend management can include any procurement process Cloud Spend Management that is not part of purchasing. Examples are travel expenses airline tickets, car rentals, hospitality costs meals in hotels and restaurants, entertainment concerts and movies, and more. The core objective of Business Spend Management is to determine how best to procure goods and services while maintaining control of overspending. At a high-level organizations use spend analysis to establish policies that align individual transactions with organizational goals and objectives thereby enabling strategic spending by providing visibility into expenditures at an aggregate level.
The process begins with identifying relevant terms and metrics to measure performance. The next step is identifying processes that can help you achieve your goals and objectives; whether they are financial, resource or time-based. Once you have a process in place it’s important to measure its efficiency, effectiveness, and overall success rate. This will help determine if any process improvements need to be made so that costs are minimized. In addition, because every business has unique needs, there is no one size fits all solution for implementing a Business Spend Management process.
How Business Spend Management Software Can Help?
With big Business Spend Management software, you can review your spending by category, expense, and employee to get a clear picture of where your money is going. The solution can help you manage suppliers and contracts across multiple locations and in multiple currencies. In addition, it helps automate payment processing for all invoices in real-time. Plus, it has a mobile app for users on the go so that they can submit expenses and review account balances wherever they are. This may be exactly what your company needs to bring more transparency to its business spend management process.
Businesses don’t typically have a streamlined way to review their business spending. From procurement to invoice processing and expense reporting, many employees struggle with a different business Spend Analytics management processes throughout their day. This can lead to excessive costs, inefficient operations, and poor employee productivity. And still, others may use multiple software platforms for these tasks, which can result in duplicate data entry or inconsistent reporting practices between departments or companies within a larger organization.
Yet these inefficiencies can be mitigated with a Business Spend Management software. Such software streamlines various business processes that involve money and allows your employees to easily manage their money within one platform. Plus, it can give you more control over expense reports and contracts, help you integrate your data into one place for visibility, and simplify payment processing by providing a single point of entry.