As businesses continue to grow in size and complexity, managing finances and spending has become an increasingly difficult task. With more vendors, suppliers, contracts and costs to keep track of, manual processes are no longer feasible or effective. This is where business spend management software comes into play.
What is Business Spend Management Software?
Business spend management software, also known as procurement software or purchase order software, is a type of financial management software that helps organizations gain visibility and control over their spending. These solutions automate purchasing, invoice processing, and payment activities to provide real-time visibility into a company’s entire spending lifecycle.
Key features of Business Spend Management Software include vendor management, purchase requisition, purchase order generation, receipt of goods, invoice processing, approval workflows, and reporting. Vendors, item catalogs, pricing and contracts can all be digitally managed. Employees can request goods and services, and managers can electronically approve or reject requests. Approved requests then trigger automated purchase orders.
When goods are delivered or services rendered, receipt of goods can be recorded in the system. Invoices can then be electronically matched to approved purchase orders before being submitted for payment approval and processing. Comprehensive reporting helps gather spending data and analyze trends over time.
Benefits of Business Spend Management Software
Improved Visibility and Control
With all spending activity captured within a centralized system, managers have real-time visibility into the entire procurement process. They can monitor pending purchase requisitions and orders, as well as view the status of open invoices. This level of visibility helps ensure adherence to budgets and prevents maverick spending.
Streamlined Procurement Process
By automating manual and paper-based tasks, business spend management software streamlines key purchasing activities from request to pay. Electronic workflows help standardize processes and enforce compliance. Digital forms and electronic routing and approvals eliminate delays.
Reduced Costs
Automating spend activities drives costs out of the procurement process. Less time is spent on manual, repetitive tasks. Faster invoice processing leads to earlier payment discounts. Improved negotiation leverage with suppliers can lower item costs over time. Reporting helps identify cost-saving opportunities.
Better Vendor Management
Centralizing vendor data provides a single source of truth. Contract terms, pricing, item catalogs and past procurement activity can all be viewed in one place. Better vendor performance can be rewarded and problem suppliers more easily identified and addressed.
Enhanced Compliance
Business spend management software makes it easier to adhere to procurement policies and segregate duties. Automated approval workflows route requests to the right people based on spending limits. Detailed audit trails promote transparency and compliance with internal controls and external regulations.
Things to Consider When Selecting Spend Management Software
Ease of Use
Look for solutions with an intuitive interface comfortable for both power users and occasional requesters. Mobile access is also important to support an agile workforce.
Integration Capabilities
Consider the ability to share master data across other key financial systems like ERP, accounting and billing to avoid duplicate data entry.
Reporting and Analytics
Robust reporting and analytics help glean insights from spending data to optimize budgets, contracts and processes over time.
Customization
Look for configurable systems that can adapt workflows, approval rules and forms to specific business needs without costly custom development.
Support and Upgrades
Evaluate the provider’s support commitment and platform roadmap to ensure ongoing development and enhancements align with your long-term strategy.
Total Cost of Ownership
Consider both upfront license fees and ongoing management, support and upgrade costs to fully understand multi-year expenses.
As organizations grow larger and more global in nature, implementing business spend management software becomes critical to maintaining control over finances, enforcing compliance and optimizing procurement activity. Automating the source-to-pay process drives efficiency, cuts costs and promotes real-time visibility into spending decisions. When selecting a solution, consider both functional requirements and strategic long-term needs to find the best fit.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
