Empowering finance teams with a unified approach.
Have you heard about the revolution taking place in financial operations? It’s called spend management. It addresses the entire time-consuming and often messy area of accounts payable, plus all of those purchases your employees make using cards. Sometimes they use corporate cards and other times their own funds that must be reimbursed — either way, it puts a lot of stress on a finance team to get everything accurately paid and booked to the GL.
Current processes expect finance teams to sleuth the details of an invoice, chase down expense reports, or remind colleagues that they need to submit their receipts. The grind of this work often slows down the month-end close as teams reconcile across platforms and scramble to correct categorization errors. Spend management is a radical departure from the status quo. It consolidates a messy tech stack and lots of manual workflows into one unified, streamlined platform for all non-payroll spend.
Departure from procure-to-pay (P2P).
Many spend management capabilities have been available for large companies with complex organizational structures for some time via P2P systems, enterprise-level solution that automate requests and approvals, payments, and booking to the GL. These systems have generally been unreasonable for companies with less than 1,000 employees — implementations are complex and intensive, the investment can be steep, they can require an ongoing commitment of technical resources, and many companies don’t even need robust vendor management features. Recently, however, a few easy-to-use, comprehensive platform solutions have become available for small to midsize companies. These solutions are straightforward to implement and designed with the right level of complexity to meet the needs of these businesses.
We know that many industry professionals and business leaders are curious about how spend management works and what its benefits are, so we wrote The Definitive Guide to Spend Management. We invite you to take a deep dive into the subject.
Download The Definitive Guide to Spend Management.
The real-time data revolution.
Modern spend management has been made possible because of advances in digital payment technology that allows for controls and instructions to be encoded into corporate cards and ACH payments. As a holistic solution, spend management considers how to use technology to solve the full lifecycle of every dollar spent by a company outside of payroll. It is the result of using design thinking to question everything about how companies spend money and what the real needs are for everyone in the equation. It rejects old ways of doing things and replaces them with workflows that naturally capture data as events take place. It automatically creates a full record, from spend request to booking the transaction to the GL, making all data available in real time to all stakeholders.
The benefits of spend management.
The last 30 years have seen a gradual evolution in how companies spend money, giving vendors lots of time to create partial spend solutions, such as expense reporting software, bill payment software, travel software, subscription management software, and reconciliation software. The resulting complicated tech stacks have left companies with little visibility and control over non-payroll spend and lots of extra manual work for accounting teams.
The implications of spend management are significant. It means that employee expense reports, purchase orders, and reconciliations are obsolete — or at least can be. It means that teams have access to real-time data on company spend, allowing them to spot problems before the end of the month. It means that managers have better control over their budgets and leadership has real-time information for better decision-making. It means transparent expense policies for employees, fostering a positive spend culture with high accountability for the use of company funds.
As a bonus to our guide, to help on the spend management journey, we’ve included two valuable worksheets. The first is a vendor questionnaire to help you evaluate the few spend management systems available in the market. The second is an ROI model to help assess the cost of a spend management platform against what it will save you and, notably, what it can earn for you.