It’s a fact: you can’t run a successful business without spending money.
Labor costs, for example, can account for as much as 69 percent of a company’s total spending budget. And then there are all other kinds of expenses, such as inventory, marketing, taxes, and insurance.
No matter what or how much your company expenditures are, keeping track of these expenses is always vital for business success.
That’s where spend management comes in. But what is spend management exactly? Let’s take a look!
What Is Spend Management?
Spend management involves the collection, categorization, and evaluation of a company’s spending data. This continuous process gives businesses an overview of their finances. A central database of spending data also helps verify spending data and pinpoint trends.
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Through all this, it then becomes possible to control and improve the way a company spends money by defining new spending strategies.
Some specific focuses of spend management are to reduce procurement costs, enhance efficiency, control workflows, and regulate compliance. These allow companies to get a hold of their business finances and maximize the ROI of every dollar they spend.
The Importance Of Spend Management
Spend management isn’t about keeping track of expenses or even devising a business budget. It’s about aligning your company’s spending habits with its needs and capabilities. Getting it right and spending management can mean the difference between a failing and a thriving company.
This is thanks to the way spend management helps:
- Increase efficiency – automates error-prone manual processes
- Lower supply costs – tracks every item bought, from whom, and for how much
- Improve collaboration – between cross-functional teams and partners
- Enhance productivity – frees up time and resources to focus on more strategic activities
Think of it this way. Many of us already have some kind of spending management system in place for our personal finances to ensure that we have enough money to cover what we need to live.
The same practice goes for company finances. But with more expenses to cover and higher figures to analyze comes bigger risks and a greater need for effective spending management. In short, companies need spending management to improve their bottom line and stay in business.
Actionable Insights With Spend Management Software
Spend management can make all the difference to your business finances. But the best way to enjoy its many benefits is to use Bentoforbusiness.com spend management software.
As well as automating time-consuming tasks for greater efficiency and accuracy, spend management software allows you to turn to spend data into actionable insights. Because optimizing the procurement process from source to pay relies on you having the right technology to tie it all together.
Effective Spend Management For Your Company
As this quick guide shows, spend management is a vital and necessary process for any business. But, it’s also one that’s best left to the advanced technological capabilities of spend management software.
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