Put an end to the constant struggle with suppliers and “in-house rebels” For many buyers and purchasing managers, the daily routine can seem a little like a war; never-ending battles with suppliers, tracking multiple request “fronts”, and chasing down “rebel” spenders.
With the increasing pressure, all companies have felt to manage to spend, you need all the help you can get. You need an ally for your spend management cause. Fortunately, advancements in e-commerce technology can bring an end to “hostilities” and deliver peace and stability to your spend management. A key to winning the spend management battle is visibility. And cutting-edge technology available today provides robust reporting and real-time monitoring of all activities within the private marketplace.
At a time when economic conditions and aggressive competition are putting pressure on businesses, it’s natural that business managers will be looking to cut costs and improve cash flow. Putting an effective spend management system in place is the only way to achieve completely transparent, industry-wide visibility, which could give your business the advantage over your competition that it needs to save money and grow.
This not only allows purchasing managers to see who’s doing what and when but enables the analysis of trends and forecast needs. It also allows managers to see other cost saving opportunities, such as when to leverage buying power when similar items are being bought across multiple departments. The bottom line, affordable technology is available that solves some of your biggest headaches. Put it to work for you and enjoy peace of mind by putting an end to the spend management battle.
Spend management is the method by which companies may optimize and control their budgets by way of what funds are spent. It usually involves cost trimming of those expenses typically found in conducting business. The costs usually appear as operations, though they may also be associated with other areas of the business supply chain.
Traditional cost-cutting involves making budget cuts across the board, but cloud-based spend management allows businesses to specifically and strategically target the purchase of goods and services to reduce expenditure.
But successful deployment of spend management also requires a shift in the way a company conducts its business. It can be difficult for departments to relinquish control of certain data marts. But by getting everyone involved in managing expenditure, a shift in corporate culture can be achieved, resulting in improved operational efficiencies, better share prices for stockholders, and increased cost savings across the board.
- Understand the role of financial management. The process of financial management involves holistically viewing the operational and management activities that drive the business. The process may include spend analysis, procurement, sourcing, payment settlement, receiving, ledger accounts, and accounts payable. Through understanding the aspects of financial management, businesses may more easily adopt strategies to break down and curtail company finances and spending.
- Conduct a spend analysis. Regardless of whether a company chooses to perform this task internally, or to utilize a spending management technology solution, it is essential to analyze current spending for any business.
However, using a professional solution will more easily coordinate and organize the activity so that all of the essential components of spending management may be represented properly. Any company can benefit from the spend-data software and management initiative implementations of a competent spend analysis technology solution.
- Revamp company branding. Sophisticated business environments have recognized the importance of corporate branding as part of an effective overall spending management strategy. This is because so much of a company’s branding informs its level of enthusiasm both inside and outside of the business.
By aligning branding strategies, companies may better simplify and convey their procurement department, which encourages collaboration among employees. When staff is better engaged, there is a much better chance that converting toward a comprehensive spend management program will be more successful.
- Incorporate supply management automation. Companies that focus on creating efficiencies in their operations processes usually find that it affects their bottom line in extraordinary ways. The initial investment in automation for routine tasks not only saves time but provides more effective and secure business operations.
For example, procurement automation and Internet-based sourcing technologies can offer very successful supply management improvements and savings. The most continuous improvements in spend data management programs rely heavily upon supply management.
- Analyze and delegate labor-intensive tasks. Many companies continue to rely upon very basic manual spreadsheet applications to classify and analyze spending information. The danger in this is three-fold: 1) human error and 2) the resultant financial chaos, and 3) time wasted with input and correction of errors. It is estimated that as a result, these activities account for from 12% to 15% of the sourcing cycle. They also consume from 30% to 50% of a manager’s time.
In addition, the lack of expertise that managers may have at classifying spend data leaves fertile ground for miss-classification and further error, at great expense to the company. Decisions are made based on financial data regularly. No company can afford avoidable financial mistakes. For example, inaccurate analyses usually fail to identify savings, purchasing power, and opportunities for improvement. Therefore, it is essential to ensure that the most thorough spend management analysis is conducted on an annual basis.