Spend Management Software – Features, Benefits & How to Choose The Right Solution

Spend management is the practice of calculating and maximizing the amount of money a company spends down to the last dollar — and implementing policies to improve how money is spent.

A business has a wide range of expenses. Whether it’s travel or SaaS subscriptions, the money leaving an organization has a direct impact on your bottom line. As a result, it is necessary to stay in control of your company spending to maintain a positive cash flow.

A spend management tool can go a long way to improve visibility and keep track of business spending. In addition, it can help you uncover cost-cutting opportunities and avoid unnecessary expenses. Most importantly, it amalgamates all of your payment data in one place to create a single source of truth.

Essential Features for an Optimal Spend Management Software

1. Smart Spend Controls

A payment solution is not complete unless you can control your cash outflow. Therefore, any spend management tool you choose should come with spend controls.

What should you be looking for?

The most important feature to search for is an efficient approval system for employee payments. The person in charge of approval should be alerted about any request instantly. For example, Mesh allows you to develop custom approval workflows for your business. You can also receive instant notifications when a request arrives and issue approval on the fly.

Additionally, you can:

• Implement custom travel policies
• Set spend limits
• Lock cards to vendors
• Get fraud alerts

2. Intelligent Spend Optimization

Optimizing spending is an integral responsibility of the finance department. However, the process often turns challenging due to a lack of real-time data. As a result, a tool that doesn’t let you optimize expenses is a waste.

You should go for reliable solutions that offer a range of spend optimizations. For example, Mesh alerts you when you try to use a service similar to your existing ones. Let’s say you are already paying a monthly subscription for Google Cloud. So, if you try to pay for an AWS subscription, Mesh sends you an instant alert.

3. Seamless Automation

66% of companies today take advantage of automation for one or more business processes. It allows them to save time, conserve resources, and cut costs. Ideally, your spend management solution should also enable you to automate repetitive tasks.

For example, Mesh lets you automate vital processes like payment approval. Additionally, you can automate other workflows like matching receipts with correct transactions. There is no need to pay wages to an employee to match receipts manually.

Moreover, you can also put your payments on auto-pilot to improve productivity.

4. Real-Time Reporting

Historical data is of minimal use when you need to stay on top of your payments. Therefore, you shouldn’t have to wait till the 31st of a month to know what you have spent. Instead, you should have real-time data to make accurate calculations.

As a result, go for a spend management tool that offers real-time reporting. You will be able to generate reports instantly for making strategic forecasts for the coming months.

Mesh also features real-time reporting for businesses to stay in control. You can even customize your report in easy steps by activating or deactivating filters.

Additionally, you always have real-time data to make sound financial decisions.

5. Meaningful Spend Insights

The finance department needs insights to guide the business on the right course. Therefore, choose a spend management tool that generates vital insights about your payments.

You can try Mesh that allows you to unearth opportunities to lower spending with crucial insights. For example, you can get the rates of local hotels while trying to reserve your hotel with Mesh.

Additionally, our tool warns you of duplicate payments, unused subscriptions, and more. You can also predict what you are going to spend in the future accurately based on real-time insights.

How to Choose the Right Spend Management Software

There’s a wide variety of spend management tools available on the market and it can be difficult to know if you’re selecting the right one for your business.

Here are a few tips to help you find the right software for your needs.

Determine Your Spending Needs

You should consider your business expenses and then set out to find the right tool. Ask yourself the following to determine the functions you will need:

• What type of expenses are you going to manage?
• Do you want to sort your expenses into categories?
• What payment methods do you use?
• How many payments do you make in a month?

Be as thorough as possible to help decide what you need. You can then embark on finding software that fulfills those specific needs.

Look for a Cloud-Based Solution

On-premise solutions are expensive and difficult to scale. They can also create issues with integration and accessibility.

As a result, you should go for cloud-based spend management software to ensure a seamless flow of data. You can also count on optimum accessibility by allowing secured access from outside the office. As a result, your employees will be able to upload and access data even on the go.

Furthermore, you can scale cloud-based systems easily by adding more resources to your server. You can also opt for load balancing and share your workload across several servers for superb performance.

Ensure Mobile Compatibility

Businesses cannot ignore the importance of mobile access today. Over 85% of Americans use smartphones, and that also includes your workforce. Therefore, you should look for mobile capabilities in your spend management solution to encourage more productivity.

Most modern software supports smartphones with Android and iOS apps. For your expense management tool to stay competitive and allow for growth, you’ll need to to ensure it’s mobile-compatible.

Opt for a solution that allows employees to use mobile devices to upload digital receipts and invoices, create reports and receive notifications — all from the convenience of a mobile device. 

Consider Approvals Management

Spend management tools do more than just track expenses. They can also provide advanced features like transaction pre-approvals. Manage the complete workflow and approval process using software to route requests to the right parties.

Additionally, you can create pre-approved expenses to save both you and your employees’ time. You can even have features like one-click approvals — or one-click cancellations in the event of something seeming fishy.

Best of all, you can see exactly who spent how much on what and who approved the expenses — giving the whole company better visibility.

How Spend Management Optimizes Your Budget

It can be tricky to know exactly how much you’re spending across the entire company, and it can be frustrating trying to get visibility into every expense. And if you don’t have that information, it’s challenging to stay on-budget.

So, a spend management tool can help you get more insights into your spending and maximize your budget to get the most out of it. Here are three ways spend management helps you optimize your company budget.

1. Know What You’re Spending

Spend management is the key to keeping track of every single expense incurred by employees. By using an automated system with virtual cards, every transaction is recorded, matched to receipts, and synced with your company’s ERP so the finance team is able to oversee the company’s spend.

If you aren’t tracking your spending down to the last penny, you don’t have an accurate reading on whether or not you’re on-budget. So, using a spend management system is incredibly helpful when it comes to staying on-track.

2. Prioritize Expenses

Spend management can also help you determine where your money is best spent within your budget. For example, by taking control of your corporate spend, you may notice charges for technology and software that are rarely used.

Spend management software can provide detailed insights on recurring costs. For example, it may alert you to the number of subscriptions you have for particular software — and it may be a lot more than you actually need.

If you see that one SaaS program is taking up a large portion of your budget, but no one on the team is actually utilizing it effectively, that indicates a bad ROI. It’s probably time to reprioritize where that money can be spent more effectively.

3. Find Extra Capital

Finally, spend management can help marketing teams find extra capital to expand their promotional efforts. Once you’ve been alerted to underused software subscriptions, those can be canceled and the funds reallocated elsewhere. 

Many spend management platforms also offer virtual cards, which are a great way to cut down on spending and find some extra cash. Look for a virtual card that allows you to have total control over employee spending — setting limits on the amount spent, controlling when purchases can be made with expiry dates, and even locking cards to specific vendors. It’s impossible to overspend company money when the cards won’t let you do it.

Additionally, virtual cards often come with the bonus of cashback. If you’re making company-related purchases anyways, you may as well add to your cash flow by getting cashback in the process.

How Spend Management Software Can Help Your Business Grow

Let’s take a deeper look at how a digital solution for tracking your business expenses can fuel growth and profitability.

Real-Time Visibility into Spending

One of the biggest benefits of spend management tools is complete visibility into your expenses. Software automatically records a transaction as it happens and captures all required data, then the system updates the database instantly without any manual work.

As a result, you get real-time, end-to-end information for all payments made by any department in your company. You will not have to dig up spreadsheets or turn pages of records. All data will be readily available for you to utilize fully.

Real-time visibility can bring many perks to the table:

• Cost-savings of up to 20%
• Predict disruptions
• Low labor costs
• Better risk management

Boosts Operational Efficiency

Inefficiencies can unexpectedly impact businesses. In fact, IDC research shows businesses lose 20% to 30% of their revenues due to inefficient processes. For finance businesses, inefficiency can cost up to $4 billion every year.

Spend management software can automate nearly all expense processes to reduce inefficiencies and improve operational efficiency to eliminate financial loss. You can streamline your workflow and improve processes like procurement and purchase requests.

Additional benefits include:

• Reduced payment cycle times
• Elimination of duplicate payments
• Streamline bookkeeping and accounting processes
• Fewer late payments

Moreover, you will be able to develop and implement transparent spend policies for your teams. 

In short, a spend management tool can help you boost your revenues by at least 20% to 30%.

Accurate and Quality Data

Manual data entry is not famous for its accuracy. You will always have inaccurate data, errors, and mismatched transactions due to human error. When it comes to financials, such mistakes can take a massive toll on profitability.

Digital solutions reduce the threat of human error and improve the accuracy of data, ensuring that the company’s financial information is correct at all times. This is crucial for making financial predictions and budgeting responsibly.

In addition to automating manual data collection and input, the quality of the data will also be improved.

Optimize Business Spending

Adopting an automated spend management solution can help you cut unnecessary spending and utilize your resources more efficiently. Your recurring expenses stay  updated and can be synced to your accounting software with a click. 

Optimizing business spending includes:

• Tracking each and every payment made by your company
• Only making approved purchases
• Identifying duplicate or fraudulent invoices
• Ensuring your internal budget controls are met
• Eliminating services or products that provide no value, like outdated software
• Create custom reports focusing on departments, payment categories, and more

Drive Meaningful Business Insights

A business spend management solution will provide analytics you can use to your advantage. Analytics let you dive deep into your spending patterns and habits to generate vital insights. Coupled with real-time visibility into expenses, you can make informed and strategic business decisions with this information.

You will be better at forecasting expenses and better able to react quickly to any changes. Additionally, you can use the insights to assess your internal performance and identify areas of improvement.

Moreover, you can zero-in on cost-saving opportunities and capitalize on trends to improve profitability.

Save Time, Money, and Labor

Your spend management tool will help you save time, money, and resources across the company. Automation is undoubtedly one of the most significant contributors and can help businesses save $16 trillion in wages each year.

You can easily automate data entry and record-keeping, among other things, by using the right solution. Identifying and eliminating unnecessary expenses helps you save  (i.e. outdated technology or redundant services you’re paying for).

Streamlining your processes and workflow leads to time savings. Spend those hours saved on productive tasks like attracting customers to boost profitability. On average, automation can help you free up 360 hours every year for each employee.

Spend Management Best Practices

Implement a company spend policy

A company spend policy is essential to ensure that employees know their limitations and act within them when it comes to making purchases with company money. Your policy will differ depending on the size of your business, your industry, location and other factors, but be sure to put the rules in place and train all employees about them.

Conduct regular audits

Just because a certain process has worked before, it doesn’t mean it will always be the best way to do business. Conduct regular audits so you know what is and isn’t working and where improvements can be made. Audits are extremely important when it comes to finding areas to save on spending, as they can reveal everything from redundant subscriptions to severe misuse of company funds.

Use software to automate spend management

As previously mentioned, automation is a game-changer when it comes to spend management. It improves accuracy, while eliminating manual tasks like receipt submission and collection, data entry, and receipt matching. This saves plenty of time, which in turn saves your company money. Plus, labor resources can be redistributed to focus on more important tasks like analysis and forecasting.

Final Thoughts 

Spend management is an essential component of any successful business. A spend management solution should help you track every expense in real-time. It should also come with spend controls and optimizations to help you save more. Additionally, choose a tool that offers real-time reporting and advanced analytics. You will be able to make your payments more efficiently and uncover any suspicious activity. 

Mesh is loaded with all the features you need to make your payments with full confidence. Try out Mesh today to find out what we mean.

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