Spend Management Best Practices for 2020

You can’t let everyone with a stake in spend management access the accounting system

People outside of an organisation’s finance team simply are not allowed access to the accounting system. And for good reason. The sensitivity of the data and the business-critical nature of the processes managed within the system are too important to be made available to employees that are not authorised or appropriately trained. It would also be impossible to guarantee any level of financial control or confidentiality if access to the accounting system was made generally available across the organisation.

As a consequence of this, any finance process that involves non-finance people has to be managed outside the accounting system, typically through spreadsheets and email. For some high-level financial activities, like the preparation of budgets, this is completely appropriate.

However, for many more routine financial management activities, like requests for company cards, raising expenses, approving spend, approving invoices and showing managers spend against their budgets, a manual spreadsheet and email-based methodology is highly inappropriate.

Firstly, the use of spreadsheets and email for these processes is highly inefficient; and secondly, this method provides only limited visibility because data is spread across multiple email messages and documents. Separating the worlds of accounting from other spend-related activities makes it difficult to get an up-to-date picture of all finances which is why month-ends take 6 – 10 working days on average. In short, such an approach may be described as inefficient and unstructured.

Time for a new way: Next generation tools for tracking all spend against budget

Companies need to look at how everybody in the company can perform the financial tasks relevant for them without requiring financial training and without getting access to sensitive data. The next generation of spend management platforms are doing just this.

By channelling everything through a single spend management platform that is connected to the accounting system, companies get real-time visibility and control over all spend while avoiding manual processes such as data entry.

This is not limited to expense claims and employee spend on cards for travel & expense (T&E), like a conventional expense management platform. The next generation is designed to provide smart spend management, delivering complete visibility of all liabilities across all areas of expenditure.

The best next-gen spend management platforms are straightforward for non-finance personnel to operate, and are able to analyse critical data from all aspects of business spend, helping all senior personnel to make more effective strategic decisions. The spend management platform is flexible, adapting to your rules. This enables the strategic spending decisions unique to each company to be made independently, free from the constraints of the global standards which govern the use of accounting systems.

With the right solution, any team member with relevant access can manage every element of their financial planning through a single platform – from issuing/approving invoices, to requesting company card approvals, forecasting company or departmental figures, and checking future spend against available budget. 

Streamlining the spend management process significantly reduces the costs of managing financial transactions and tasks. As a result, next generation smart spend management software cuts the cost of processing invoices and expense reports by 60-70%.

But more importantly, next generation spend management platforms leverage more data streams than operating a series of systems and processes, which improves spend management capabilities. With complete visibility of all current and future spend, senior personnel feel confident that they can always pay salaries and suppliers without ever overspending.

The real-time data needed to plan business spend 

Through the use of accounting platforms, many companies have already seen how easy it is to plug cloud software into their business and start using it straight away. Now, this same easy adoption process can be applied to cloud-based spend management tools, which are accessible to the whole company.

Plugging a spend management platform into the finance stack lets companies democratise financial planning, through empowerment and greater responsibility at the point of spend. Company cards and expenses are a great place for newcomers to start, because they are often the least controlled and most inefficient part of business spend. However, over time more financial elements can be integrated, until every aspect of company spend is managed through one solution.

With all data insights in one place, team members in every department have the real-time information they need to plan business spend more effectively. It’s a winning solution for everyone involved. 

Yordex is a leading provider of smart spend management solutions that adapts to your rules. Book a demo or Get Started for Free to see how our platform works.