Your organizational spend is more than just tracking corporate spending. It is about constantly and consistently collecting and analyzing spend data in a purposeful and conscious manner. Accountability for your organizational spend should lie everywhere, and through consistent monitoring of all direct and indirect spend and a transparent spend management system, you will have a full view of how money moves through your organization.
Spending mistakes, accidental budget overspends, lack of working capital, increased maverick spend, increased inventory management and purchase order costs and more are the potential consequences of impaired spend visibility. And all of those issues impact on your ability to be agile and respond to opportunities for innovation and growth.
Without further ado, here’s our guide to the 7 things you can do to achieve true spend visibility.
1. Make it easy to track spend
Give your organization the tools it needs to easily and efficiently record the data required to gain an overview of spend. If the process is laborious, or isn’t clearly defined, people simply won’t adopt it.
2. Conduct a full spend analysis
You cannot get away with not tackling spend analysis. If you do not make the effort to collect and categorize your spend data you are in the dark when it comes to your spend management. You can check out our full guide on to how to conduct a spend analysis here. Which segues nicely into our next point:
3. Invest in spend analytics software
4. Introduce a ‘buying license’
It is a constant struggle for procurement professionals who are mandated with controlling organizational spend that they are constantly fighting against spend which happens under the radar. Encourage a corporate policy of extremely limited spending authority, clearly define roles and processes and ensure buy-in from all stakeholders.
5. Speculate to accumulate, both in terms of time and money
Investing in P2P software, documenting processes and putting the effort in at the front end of the procurement process will save time and resources throughout all stages in the long run.
6. Use a purchase order system
It seems obvious, but so many organizations fail to follow a robust purchase order system. Without a system in place, spend visibility is near impossible to achieve. Purchase order software that is integrated into your other accounting and procurement systems can help you keep track of all purchases, ensuring accountability from all departments as well as enabling easier supplier and order management to ensure orders are being fulfilled correctly.
7. Analyze intent and driving factors behind maverick spend
For more insights into procurement best-practice and how you can leverage technology and data to drive efficiency and innovation in your procurement department, contact our team of solutions specialists, or check out our blog archives.