Business Spend Management: The Forgotten Pillar of Effective Financial Management
Business Spend Management is a crucial part of any successful financial management strategy but often goes overlooked. Business Spend Management (BSM) controls how, when and where money is spent in a company, helping ensure that resources are allocated effectively, and costs are kept under control. By adequately managing business spending, companies can improve their overall financial health and remain competitive in the marketplace.
Why You Should Focus On Spending Controls
Business Spend Management allows companies to track, monitor and control spending with precision. With a Business Spend Management system in place, like Coupa, you can ensure that money is spent wisely, and resources are used efficiently. It also helps identify areas of waste so that corrective action can be taken if necessary. Business Spend Management tools enable you to gain greater visibility into where the money is going, both planned and unplanned, thus helping to ensure that money is being spent in the most effective way possible.
Business Spend Management Is Essential for Business Growth
By leveraging Business Spend Management tools and processes, businesses can reduce their costs and improve operational efficiency. This will help boost profits and allow companies to invest more into growing their business. Businesses that have implemented Business Spend Management processes and tools are better equipped to manage their finances and remain competitive in the marketplace.
Embracing BSM Technology is One of the Simplest Ways to Increase Profit and Streamline Cash Flow
Business Spend Management is one of the simplest and most effective ways to increase profits and cash flow. According to Business Insider, cash flow problems can account for up to 82% of small and medium-sized business failures. The distant second is selling products that don’t fit the market’s needs. This means, you are far more likely to succeed selling a product with a poor market fit than you are with continuing to waste cash on unnecessary spending.
Spend Management vs Expense Management
Business Spend Management is a broad term that encompasses all aspects of spending, including budgeting, planning, tracking and reporting. Expense management refers to the process of tracking expenses (usually related to employee travel) and ensuring they are properly accounted for. Business Spend Management is an overall financial strategy while Expense Management is just one component of Business Spend Management. Business Spend Management is the larger umbrella term and includes managing expenses as well as other aspects of spending such as procurement, inventory management, supplier management and more.
6 Spend Management Strategies to Adopt in 2023
Create a spend management policy to control all procurement and employee expenses
If you haven’t already done so, start thinking about creating a spend management policy that aligns with your company’s strategic objectives. A spend management policy should outline guidelines, processes and procedures to ensure that expenditures are kept in check.
Develop a reporting system you can rely on
Reporting is key to Business Spend Management. A reliable reporting system helps business owners gain insight into the company’s finances, identify trends and discover areas of waste or inefficiency. These reports should be regularly reviewed and updated to ensure that Business Spend Management is working effectively.
Stay up-to-date with market trends and best practices
To get the most out of your business’ spend, it’s important to stay on top of industry trends and best practices. This will help you find ways to cut costs while also ensuring that money is being spent in the most effective way possible.
Implement a Business Spend Management solution like Coupa
Business Spend Management solutions, like Coupa, can help you automate spend management processes to make sure that money is being spent in the most efficient way possible. Coupa provides complete visibility into spending across all divisions, departments and entities, allowing business owners to have better insights into where money is going and how it can be managed more effectively.
Automate your spend management to create a more straightforward process
Automation is a great way to streamline Business Spend Management processes. Automating certain tasks like invoice processing and expense reimbursement can free up more time for business owners to focus on more important aspects of their company. Put procedures in place to ensure Business Spend Management compliance.
Conduct periodic reviews of spend management policies and procedures
Periodically review Business Spend Management policies and procedures to ensure they are still up-to-date and effective. Doing so will help identify areas of waste, areas where processes can be improved, and opportunities to save money.
Incentivise Managers to Become Business Spend Heroes
As a company gets larger and more complex, the owner’s ability to control spending decreases. Business owners need to delegate spending approval responsibilities to managers and incentivise them to ensure they are making decisions that are in the best interests of the business at large, not just their team or department. This could be done by rewarding managers who save money or have strong adherence to spend management policies. Another way to encourage compliance is introducing a spend management platform, such as Coupa, to provide complete transparency over spending performance.
Business Spend Management is an essential part of effective financial management that can help businesses control costs, increase efficiency and improve their bottom line. Companies should put strategies in place to ensure that Business Spend Management processes are compliant with company policies and procedures, up-to-date with industry trends, and automated to create a more straightforward approach.
Managers should be incentivised to become business spend heroes by rewarding them for saving money and adhering to spend management policies. Business Spend Management solutions like Coupa can provide the visibility and automation needed to make Business Spend Management simple and effective.
By following these Business Spend Management best practices, businesses can ensure that their spending is aligned with their strategic objectives and that money is being spent in the most efficient way possible.
About Zanovoy, a Leading Coupa Spend Management Software Partner
Zanovoy is a Business Spend Management Software Solutions Partner for Coupa. We help businesses streamline Business Spend Management processes and ensure that spending is in line with company objectives. Our team of Business Spend Management experts can provide comprehensive training, implementation, customization and support services to help you get the most out of your Business Spend Management solution.