Every business has a wide range of expenses to handle and spend management is the process of calculating and maximizing all the money a company spends on resources.
No matter what a business is spending on, all money being used directly impacts its bottom line, so it’s important to stay in control of business spend for a positive cash flow.
To stay on top of this, spend management software can help to improve visibility and track company expenses.
Let’s take a further look into what spend management is and why it’s so important…
What is spend management?
Spend management is the process of paying each vendor a company needs to operate its business, which could be done through multiple methods of payment, including corporate cards.
Anything from cloud providers, high-cost services, or low-cost services belonging to a variety of business expense categories are covered by this.
The main goal of spend management is to ensure visibility for the accounting team and all employees into how business funds are being spent and whether they’re being spent accordingly to the budget and company plans.
Optimize your budget
One of the main reasons why you need spend management is to optimize your business budget.
It can be difficult to know an exact figure on how much you’re spending across the whole company and without this information, it’s harder to stay on-budget.
Spend management tools can help alongside this to gain more insights, but here are just a few ways that spend management helps to optimize your business budget:
- Prioritize expenses
Spend management can decipher where your money is best spent within your budget – it could alert you to software that’s rarely used within a business, giving you time to cancel these subscriptions.
If you have recurring subscriptions, spend management software can give detailed insights into these expenses by alerting you to the number of subscriptions you have for specific software – making sure each subscription is properly utilized.
- Extra money
With marketing teams always on the hunt for ways to find extra capital and expand their promotional efforts, spend management can greatly aid in this.
Rather than these subscriptions just being canceled, the funds for them can be relocated elsewhere, so no resources are being wasted.
Another way to cut down on company spend is incorporating virtual cards into your business, with options that can allow you to have total control over employee spending.
Making this even better, virtual cards can sometimes allow for cashback offers and for company-related purchases, this can add to your cash flow.
- Future planning and spending
As previously mentioned, with spend management, you can delve into the insights of company spending, providing you with fine-level details of where spend is happening.
Such great visibility provides businesses with new avenues to budget and plan, ending in the ability to know and even predict where to focus future spend.
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Spend management is transforming to keep up to date with new technology, providing powerful tools to help accounting teams control their spend and gain company insight.
After a brief overview of spend management, it’s clear that it’s extremely important for utilizing expenses, which ultimately leads to a successful business, so it’s definitely worth investing in for your business.