Transform Spend into Revenue with Efficient Spend Control
Treat your spend like an investment in your business. By using spend management software to keep on budget and reduce overhead, you can spend with confidence.
Spend control encompasses all strategies undertaken to stay on budget, make smarter investments, and meet revenue goals. The right spend management software is pivotal to making this happen and can also allow finance to take a more strategic role to grow the company.
What is spend control?
Spend control is the set of processes and tools that enable you to monitor, manage, and analyze spending to stay on budget.
Spend control is not just about cutting costs. It also includes knowing how much, by who, and on what funds are being spent, ensuring spending is within policy, and having full visibility across total spend to make meaningful strategic decisions.
Having a robust understanding of spend will enable you to forecast requirements more accurately and allocate funds according to the company’s strategic priorities. If targeted areas aren't getting enough funds, managers can find out why and reallocate the budget to fix the issue.
How can organizations control spending?
The key to keeping spending under control is empowering budget owners to manage their budgets effectively. Giving people access to the right data and tools allows them to identify and fix problems independently without relying on finance to deliver the data after the month-end close when it’s already too late.
To achieve this, you’ll need to invest in spend management software that provides real-time access to spend data. This will enable budget owners to prioritize strategic spending according to how much budget is remaining, spot cost overruns, and take action to fix adverse spending patterns as they happen.
The right spend management software can also enable your finance team to evolve into a valuable strategic partner to the business. By automating manual spend analysis processes, such as manually gathering, cleansing, and sorting data, finance can focus on analyzing spend data and formulating strategies to drive efficiencies for your bottom line.
Spend control software can also provide companies with an advantage in the procurement process. The captured data can help identify the most cost-effective suppliers and find opportunities to consolidate purchasing for greater negotiating power.
Here are four specific ways in which an intelligent spend management solution can help you make cost savings and control spend:
Tech-enabled corporate cards
Software-enabled corporate cards can help you control unnecessary spend before it happens. You can set adjustable spending limits and restrictions on the types of transactions and vendors each card can be used for. Limits can be increased or decreased immediately via a central dashboard to control total spending, and any out-of-policy transactions will be flagged in real-time for approval. Spend management software also gives you the option to provide single-use virtual cards for specific purchases.
Automated expense reports
This goes hand in hand with a company-wide rollout of tech-enabled corporate cards. When all employees use their corporate cards for company expenses, the reimbursement process is eliminated. Under the traditional model, employees are expected to fork out from their personal funds and wait for reimbursement. Time is wasted by employees completing expense reports, managers chasing up incomplete information, and finance teams reconciling the reports. But an intelligent spend management solution does away with this and allows staff to focus on more productive tasks.
Real-time spending approvals and granular budget limits mean you can control precisely how spend occurs before it happens, instead of worrying about it after you’ve reviewed the manual expense report. And no more disgruntled employees upset that their reimbursement didn’t get approved.
The ability to monitor actual to budget spending in real-time is one of the most significant advantages of using spend management software. Budget owners always know how much they have left to spend to make quick decisions to take advantage of new opportunities or adjust spending in response to market movements without having to wait for finance to close the books each month.
Accounts Payable (AP) automation software simplifies the procurement process. With AP automation, the software uses optical character recognition (OCR) technology to read the invoices and transcribe the data rather than your AP team inputting it manually. After approval, the software automatically makes payments to suppliers.
What are the benefits of software-enabled spend controls?
Here’s how software-enabled spend controls can help your organization:
Eliminate the buffer
It’s impossible to account for every possible expense when setting a budget. Every finance team builds in a buffer to account for unexpected costs and maverick spending. With real-time controls and granular budgets allocated to departments, teams, or individuals, you can ensure spending is always in policy and in line with strategic objectives. You won’t need as much fat in the budget for errors and nasty surprises and can run with more accuracy.
Transition finance into strategic advisors
Your finance team is a valuable resource that shouldn’t be wasted on routine tasks. By eliminating expense reports and reimbursement admin, you’ll free up their time to focus on value-add projects. Accountants can play a much more significant role and drive the strategic direction of the company in the following ways:
- Being prepared for change: Finance can assist revenue teams with scenario planning and forecasting to adapt quickly to sudden market changes. With the unexpected global pandemic, this is more important than ever. Finance can help build current factors into the original budget to determine how to adjust spending according to new revenue assumptions.
- Tracking performance: Finance’s time could be spent tracking key performance indicators of business functions against targeted outcomes. For example, by quantifying the effectiveness of a long-term marketing campaign.
- Facilitate cross-functional projects: Companies often launch initiatives executed by cross-functional teams, which comes with challenges when goals are not aligned. Finance can be the neutral resource to help cross-functional teams make shared investments, allocate funding fairly, advise on budgeting, and hire shared headcount.
- Turning “spend” into “investment”: Finance can help communicate the benefit of strategic spending to the broader company. By modeling out the monetary gains derived from investing in headcount and technology, teams can build a stronger case for additional budget approval to enable projects that will continue to propel the company forward.