Most companies don’t often get a clear picture on how their employees spend the company’s spending budget. It’s time for them to ponder on automating the spending activities using a spend management system that can provide the insight and information on how to spend the company’s budget. This article helps you to understand what kind of information and facts a spend management system can provide you. Let’s examine how this particular system helps you use information in such way to improve your business.
When companies automate their spending processes, they try to start collecting the spending information that can be categorized and segregated in various ways. You can also see how much you are spending, by each vendor, using this system.
This is how the company can get the facts on how they are spending their budget and with whom they are spending most money. They can also find out whether the employees are buying the same material from 10 different outlets. This gives you an upper hand on negotiating for larger pricing with top of the line vendors, or combined spending with the vendors to streamline the payable processes of your accounts.
When you look at the information by category, you get a good picture on where your money is being spent.
If your company is spending a remarkable amount of money on toner every year, you can see that sending out the toner business for bid may get you a relatively lower cost. You can also have a good idea on how you spend money by taking a look at the expense report by T and E category such as car rentals, parking, airfare, meals, mileage etc. One of the greatest benefits of this system is that it makes the whole process so transparent and open.
By installing this system in your company, you get to see who is spending the most, how much of your budget is being spent in each category, and factual spending in each category. You can verify it by taking the examples of car rentals. If you have a policy that says rentals are to be no more than $40 a day, you can find out whether your employees are spending more or less than this budget, using this system. This factual information can help you determine whether to change this policy or look forward for combined spending with another vendor, or fix a corporate rate close to what you wish to spend.
Most time consuming, tiring task for many companies is nothing but the annual budgeting process. Your spend management data can be a great way to guide your company to streamline this process. With one year of effective data, you can collect and assess spending information across various business units, departments by vendors and category. This will give you a proper baseline to plan your next year’s spending process.
Another great benefit of a spend management system is that you can upload the budget information into it to offer a budget with actual snapshots before you agree on spending. This gives managers a real time visibility into how a purchase requisition or expense report can affect planned spending for the organization. You can even get the spending requests for budgets by departments, business units and general ledger account.