To safeguard their financial bottom line, businesses use the process of spend management to monitor, manage, analyse, and optimise organization-wide spending. This covers expenses for managing supplier/vendor relationships, purchasing tools and software, paying for business-related travel and entertainment, etc. Payroll and reimbursements for employee expenses are not included in this.
What makes spend management crucial?
According to a McKinsey report, external spending accounts for between 40% and 80% of a company's total costs. The statistics speak for themselves, so we won't have to describe how disastrous poor spend management can be for your company.
Companies risk leaving themselves open to long-term revenue loss and financial leaks if they don't have real-time visibility into and control over their spending. Therefore, spend management software is now used to handle the heavy lifting by businesses that understand and want to reduce this risk. The software reduces unnecessary overspending while also assisting Finance teams in locating cost-saving opportunities.
Benefits of Automating Spend Management
Spend management is important not only for enterprises that have large amounts of expenses but also for SMBs aiming for scalability, sustainability, and profitability. Regardless of the size of the business, spend management automation often yields the following advantages:
What else? Finance teams can always keep track of where money is moving because they can view all expenses on a single spend management dashboard. They can use this to improve their data-driven decisions and expand your business.
Is Spend Management Automation the right choice for your business?
Spend management, to put it simply, is the art of managing, controlling, and analysing all external spending to make sure your company gets the most out of every dollar it spends. Additionally, the powerful business rules engine used by spend management software enables staff members to make purchases directly from project or department budgets without needing prior authorization.
In other words, spend management offers businesses more agility and flexibility while ensuring continuous compliance and enhanced control for admins and employees.
To determine whether you require spend management automation, it may also be helpful to go over a few common issues with manual spend management procedures.
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