Implementing spend management solutions is essential for any successful business. The appropriate allocation of company money, adherence to budget constraints, legitimacy of vendor invoices, and accountability of employees in using company resources are all contingent on a proper spend control plan.
The more comprehensive and developed this spend management strategy is, the smoother it will function and the easier the day-to-day workflow will be for all those involved.
But even with every conceivable measure in place, there are still bound to be cracks in your spend analysis. And if you don’t have the necessary tools in place to monitor cash flow, manage payment approvals, and otherwise create transparency and control the allocation of resources throughout the entire procure-to-pay process, they’re all but inevitable.
Shoring up those cracks is key to successfully managing company spending. Thankfully, the right tools will allow you effective decision-making and achieve your desired spend control. And now, they’re readily available and easy to incorporate into your pre-existing workflow.
Common Cracks in Spend Management Strategies
No two companies are exactly the same or in the same circumstances. However, certain cracks commonly plague spend management strategies, no matter what their situation is. Familiarizing yourself with these highlights makes it easier to spot and resolve the issues when they do arise.
Dictate Employee Spending
Having faith and trust in your coworkers and employees is integral. However, when you give employees spending power, mistakes are bound to happen, and profitability issues will inevitably arise. Sometimes, it will be the result of purchases that shouldn’t have been made using company funds, and other times it will simply be payments made to unapproved vendors.
Regardless, the easiest way to reduce these risks is to dictate what employees are able to buy and from whom. Traditional wisdom says that this process is retroactive — you must check spending reports, receipts, and so forth to ensure that employees are spending as they are supposed to.
But with modern procure-to-pay systems, spend controls are built-in and automated, giving CFOs and Controllers the tools necessary to ensure accountability and adherence to the company’s strategy.
Payments and purchase orders made without proper approval can cause serious problems for your business. Even when employees are thorough, these types of payments occasionally slip through the cracks. Equipping your Accounts Payable team with approval workflow tools can help with risk management.
The problem is that methods of requesting and issuing supply chain approval tend to be clunky, outdated, and prone to error. Sending approval requests can get messy too, especially if they change hands multiple times. Worse still, an employee may forget to send the approval request in the first place.
Workflow automation solutions can remove these risks by enhancing visibility, allowing you to screen payments for approval, giving you the freedom to make one-click approvals from anywhere, and otherwise streamlining your payment approval without manual processes.
Legitimize and Optimize Invoices
Vendor invoices are a key component of any spend management strategy. You use them to verify your records, ensure payments are accurate and on time, and inform audits and month-end reports.
Illegitimate invoices can throw off your entire process, leaving you to track down expense report inconsistencies, pinpoint time-consuming mistakes, and potentially grapple with the loss of company funds. To avoid these and other pitfalls, it is vital to validate invoices and ensure they are accurate before using them.
Modern AP automation solutions do this instantly by matching your invoices with their corresponding PO and receipt, giving you full visibility into your business’s spend analytics before the final payment is made.
Enhanced Business Spend Management Visibility
Many of the above problems, as well as others your business has experienced, are directly correlated with the amount of control and real-time visibility you and your finance team have over common business practices. By increasing the level of control you have over spend management systems and enhancing the transparency of company operations, you can quickly cut down on mistakes and ensure compliance with company budgets.
Procure-to-pay systems have the tools necessary to make this enhanced control and visibility a reality for your business. And with PairSoft, these revolutionary resources are not only at your fingertips but also integrated seamlessly with every aspect of your company’s AP workflow and payment processing.
This gives you greater control over spend forecasting, insight into employee expense management, and the ability to quickly and easily identify and correct problems.
In addition, PairSoft utilizes intuitive artificial intelligence to streamline complex processes, eliminate redundancy, implement real-time spend data, verify records, and more. Not only does this reduce mistakes, but it also frees up you and your employees to spend more valuable time and sourcing on the business’s bottom line.
Changing Spend Culture
In a modern world that’s constantly experiencing technological innovation, there’s no reason to repeat the mistakes of the past. Comprehensive procure-to-pay initiatives make sticking to your spend management process and cost savings not just attainable, but also easy. They also relieve much of the pressure from you and your stakeholders, creating an environment of accountability, productivity, and trust.
With the common cracks in your spend visibility now patched, you and your employees can turn your attention to more important aspects of your business with less worry and stress.
Get in touch with our team to schedule a free demo and find out how PairSoft can help you automate spend management today.