Why Real-Time Visibility is Necessary for Finance Agility By Sarah Murphy Every business needs to be able to respond to changing circumstances. This is especially necessary today, when markets are fluctuating rapidly and unexpected situations occur far too frequently. Business agility always relies on the finance team. Executives turn to finance departments to reassess budgets, track costs, and rethink investment priorities whenever something changes in the business atmosphere, whether that’s a war in Europe or a move to remote operations. It’s no longer possible for finance teams to set budgets and goals for a year ahead, and leave them on auto-pilot until it’s time to prepare the next year’s budget. Instead, you need an agile finance department that can respond quickly to changes. Contents hide Steps to Achieving Finance Agility What is Spend Visibility, and Why Does it Matter? Methods to Achieve Real-Time Spend Visibility How Real-Time Spend Visibility Saves Money and Helps Inform Decision Making Agile Finance Teams Have Real-Time Spend Visibility Steps to Achieving Finance Agility There are a number of factors to achieving financial agility. Here is an overview of the steps you need to take to make your finance team more agile. 1. Gain oversight into available capital You can’t make any financial decisions unless you know exactly how much capital is available to fund a digital transformation, for example, or to hire new employees. And it’s impossible to know that without real time spend visibility. Finance teams need to be up to date with business expenditure for this month, not last month or last quarter, so they know what funds can be spent on new business goals. 2. Automate financial reporting Core financial reports are the foundation for every financial decision, but they can take a long time to prepare. If you have to wait for a new report before responding to current events, you’ll lose out on agility. But automated, instant financial reporting tools can issue an updated report in minutes, so you can easily survey your current financial situation and make a confident decision about how to proceed. 3. Ensure full visibility into operational costs As organizations grow, there’s a greater risk that silos can arise. Finance teams might think they have visibility into all the corners of the business, but as the business expands, teams can splinter off without you noticing. Make sure that you are monitoring operational costs and business activities across the entire operation, and that there aren’t any blind spots in your analysis. 4. Automate reconciliation For decades, finance teams have reconciled money movements at the end of the month. This is largely because up until now, reconciliation was manual and time-consuming. But when you automate reconciliation tasks, you can complete them on a daily basis. This way you have a more accurate view of where your company is, and can manage finances more closely. What is Spend Visibility, and Why Does it Matter? Spend visibility means knowing exactly where your company’s money is going. It’s more than just monitoring expenditure; it includes tracking the ways that funds flow through the organization. Spend visibility can improve all your business processes. When you raise spend visibility, you can: Find more ways to cut expenses Regain control over expenditure Evaluate procurement processes Track compliance from vendors and employees Identify the best way to achieve your business objectives Methods to Achieve Real-Time Spend Visibility Automate gathering expense data If your employees only submit their expense reports at the end of the month, visibility will always be at least 1 month behind. Instead of waiting for expense reports or the company credit card statement, implement expense tracking tools. These automate expense reporting so you can monitor spending as it happens. Centralize your spend data Gathering expense information is only the first step. You also need to view and manipulate it easily. Centralizing all your organization’s spend data in a single cloud-based platform means the whole finance team can access it, no matter where they are. It gives you a single source of truth, which makes the data more reliable. A centralized data platform allows you to compare different datasets against each other, and zoom in or out for different perspectives. This way, you can spot patterns or anomalies in the data, and set benchmarks against departments or your competitors. Bake in spend compliance Giving employees permission to make spend decisions saves you time responding to a multitude of approval requests. It also removes bottlenecks while employees wait for a reply. However, you don’t want to risk anyone deliberately or accidentally breaking your spend policies, so you need to bake in compliance. Spend management technology codes spend policies into the system and automates approvals, so employees can make purchases without risking overstepping permissions. You also won’t have to waste time trying to justify borderline spending decisions in audits. Implement continuous forecasting Continuous forecasting uses automated data platforms to pull real time finance reports, and applies them to update your forecasts. Continuous rolling forecasts are more accurate than the static ones you prepared at the beginning of the year, which use data that could be several months out of date by now. With continuous forecasts, you can compare actual costs against predicted costs, and then adjust your budgets and spend allowances in real time. How Real-Time Spend Visibility Saves Money and Helps Inform Decision Making Here are some of the ways that your business can benefit from real-time spend visibility. Make rapid business decisions Real time spend visibility means you have full awareness of your current financial situation. This gives you the confidence to make bold, swift business decisions when the pressure is high, so you won’t waste time dithering over the best course of action and risk missing an opportunity or compounding your losses. Act more strategically Traditional spend analysis is time consuming. You have to manually gather the date, verify it, and compile it into reports. Once you automate spend data analysis, you’ll have more time to plan ahead, pre-empt emerging issues, and think strategically. Adjust budgets in real time Real time spend visibility enables real time budget allocations. You’ll see if a department might go over budget before it happens, so you can either act to prevent it, or adjust the budget accordingly. With real time spend analysis you can see if there’s a justification for raising (or cutting) the budget, and support your argument with data. Cut unnecessary expenditure You know where the money is going in real time, so you can find more ways to cut costs. Use customized reports to look at spending patterns from different perspectives to reveal previously hidden money-saving possibilities. Assess vendor performance Real time spend visibility gives a clearer picture of vendor performance. Check if your vendors are delivering on your agreements, see how much you are spending on each contract, and determine whether you are hitting RoI expectations. From here, you can cancel or renegotiate contracts that aren’t satisfactory. Retake control into employee spending Decentralized spending through company credit cards means that employees might make purchases that comply with your spending policies, but miss out on cost-saving opportunities. For example, multiple employees might each independently buy a license for the same SaaS tool, but if you made a central purchase you could get a multi-user discount. Or employees might subscribe to tools that have overlapping capabilities. Real time visibility lets you spot these opportunities and act upon them. Prevent fraud Fraud can happen even in organizations with the highest levels of trust. Real time reports can help you detect transactions that could be fraudulent so you can nip fraud in the bud before it spreads, plus you can apply spend controls that could prevent a fraud from going through in the first place. Agile Finance Teams Have Real-Time Spend Visibility Real-time spend visibility is a prerequisite for financial agility. By using automated tools to achieve real time spend visibility, you can help cut costs, optimize RoI, improve business decision-making, and free up time for strategic planning to drive your organization’s growth. Get the latest blogs from Mesh by subscribing to our newsletter Manage Your Payments With Full Control & Visibility Get Started Sarah Murphy Sarah is a Content Manager for Mesh Payments. Before working in marketing, she completed her Master of Journalism degree at Toronto Metropolitan University (f.k.a. Ryerson University) and worked as an arts journalist in Toronto. She was a content writer for tech companies in the retail and workforce management sectors before joining Mesh in 2022.