Smarter spending has clear power to deliver savings and value, but can also have more intangible strategic benefits such as increased agility and better decision-making ability.
As procurement technology continues to advance, there’s no better time to get your arms around spend, and make your finances work harder. Let’s look at the 5 major ways a business can put this into action:
1. Move expense management to the cloud
By choosing the right cloud vendor, businesses can gain both built-in expertise and a commitment to ongoing innovation. Businesses can benefit from this without the difficult and costly upgrades typical of on-premise software solutions. Moving expense management to the cloud represents a low-risk, high value opportunity to gain better efficiency, visibility, and control.
2. Prioritise having full visibility
Visibility is the first step in controlling and optimising spend. That means breaking down silos in order to see the big picture. Finance leaders need visibility into all spend across expense, procurement, and invoicing. Modern cloud-native spend management solution suites can provide this by delivering unprecedented user and supplier adoption. High adoption drives high visibility through automatic capture and categorisation of spend. This level of visibility empowers the entire organisation. Sourcing and procurement teams get the data they need to effectively manage spend and uncover new opportunities for savings. This then gives CPO’s a clear understanding of what their teams are spending in every category and with every vendor, giving them the full visibility they need.
3. Incorporate the power of community intelligence
By joining thousands of businesses on a spend platform, spend managers can benefit from the harnessed power of Community Intelligence. Community Intelligence enables collaboration between businesses, creating an ecosystem of insights and review which can help managers navigate their spend journey. When it comes to making smart decisions, the best thing is to learn from others mistakes and successes. Like GPS app, Waze, users can learn from the roadmap that other drivers are contributing to.
4. Shift to a comprehensive platform which unifies spend data and processes
Now that the business spend management market has matured, we have systems that integrate the whole purchasing and accounting workflow, creating a completed comprehensive management platform. When that’s connected to payment rails, and you can give buyers, suppliers, banks and payment providers timely visibility into the data, it unlocks a lot of opportunities to optimise everything about the payment in a ‘one stop shop’ setting.
That could include paying by card for suppliers that accept it, so you can get rebates. It could also include early pay discount strategies for certain suppliers, or even for different categories you contract for from the same supplier. Financing, which has traditionally lived in a completely separate system, can also be integrated.
5. Invest in AI to counter fraud
It’s time to outsmart fraudsters when it comes to managing your spend. With today’s technology, you can shift from detection to prevention, comparing your organisation’s behavior to the norm at a granular level and identifying potential fraud activity proactively.
Artificial intelligence has advanced to a point where it can do the dirty work of aggregating and analysing billions of transactions from the business community to compile profiles and learn what constitutes ‘normal’ behaviour. Then, your systems can compare each transaction to what’s normal and flag anomalies for your finance team to review. This approach can identify and stop losses to fraud more effectively than traditional audit processes while freeing up resources to focus on higher value tasks to drive company strategy, as well as combating accidental errors.
☛ John Callan is senior director, EMEA product and segment marketing at Coupa Software.