Business spend management (BSM) refers to a unified, coherent set of business processes, supported by software that encompasses invoice management, procurement, and expense management. Business spends management addresses all the ways employees spend money within an organization. Spend management also captures related processes such as product lifecycle management, inventory management, supplier information management, budgeting, analytics, and advanced sourcing.

These related processes are supported by an enterprise community intelligence. With business spend management, business owners and procurement personnel can identify different areas of spending. This visibility allows employees and procurement staff to align procurement goals with business objectives.

More precisely, business spend management denotes the way organizations and businesses monitor, analyze, and control business costs. Business spend management allows organizations to have clear visibility into different spending areas, prioritizing budgets and procurement processes accordingly. So, what benefits do businesses achieve with a business spend management BSM?

Benefits of Business Spend Management (BSM)

Let’s take a closer look

  • Spend visibility. A spend management software tracks payments and provides clear visibility into different areas of spending including marketing, sales, research, procurement, hiring, outsourcing, and so on.
  • Accuracy of financial data. Business spend management provides clear visibility of financial information including; expenditures, income, dividends, taxes, and insurance costs.
  • Process efficiency. It’s hard to assign hard costs to process and operational inefficiencies. But once these inefficiencies are addressed, they add significant cost savings that go directly to your bottom line and allow you to reallocate resources to cost-reduction activities.
  • Risk mitigation. Implementing a business spend management solution increases visibility into suppliers’ data and typically leads to fewer problems caused by suppliers’ non-compliance or reduced liabilities due to suppliers’ non-compliance.
  • Strategic benefits. Benefits such as increased transparency into the procurement process and increased visibility into contract commitments and spending may be crucial than direct savings opportunities. This is because increased transparency gives managers better and more information and enhanced controls. With these strategic benefits, managers can make better decisions resulting in increased organizational agility, increased financial control, and increased workforce morale.
  • Improved compliance. Once a spend management system is implemented, it’s easier to document, collate, and trace expenditures that improve spend visibility. This helps in complying with major regulatory requirements. Since spend management best practices demand businesses to maintain reports of spend data across verticals, it’s easy to audit and comply with multiple regulatory bodies.
  • Sourcing opportunities. Spend management collates expenditure on products inclusive of all peripheral costs, thus securing cheaper and better sourcing opportunities. For instance, sourcing materials from Asia may be more expensive due to shipping and taxation costs than sourcing from local vendors.

The Power of Business Spend Management

Business spend management (BSM) represents a unified set of business processes supported by a software that includes invoice management, procurement, and expense management. Spend management also encompasses other interrelated processes such as supplier information management, inventory management, contract lifecycle management, budgeting, advanced sourcing, and analytics.

Unleashing the power of this computing resource demands that enterprises and organizations transcend from paper-based procurement and sourcing processes to automatic, cloud-based procurement models. With ProcurePort’s procurement software, organizations and businesses can unleash the power of business spend management in the following ways:

1. More savings and profitability

The core objective of business spend management is to exploit savings and profitability opportunities and ultimately improve a firm’s productivity. Spend management casts light on expenditures across the organization, helping to sniff out duplicate purchases and negotiate bulk supplies, thus leading to direct cost savings.

2. Reduced cycle times

Spend management locks optimal decisions such as contract term negotiations and designated suppliers that reduce process cycles. Cycle times vary for every transaction, which means that spend management helps to regularize recurring tasks such as supplier selection and contract authorization by laying down ground rules for these routine tasks. This, in turn, whittle down options to make faster and more informed business decisions.

3. Identification of maverick spending

Maverick spend refers to buying from suppliers or vendors without following the predefined procurement policy. Purchasing goods and services from non-compliant suppliers implies that you do not benefit from the preferred vendor discounts you worked hard to negotiate. A spend management solution by ProcurePort helps you to identify and cut back on maverick spending.

4. Automating and improving internal systems

Spend management takes efficient and effective expense decisions, thereby improving all the internal systems. By recognizing the possible advantages of business spend management, enterprises could automate their procurement processes and bring along visibility into their spending environment. Spend management is a process that every organization and business needs to inculcate to achieve cost savings year-to-year. A simple four-step process of collecting, cleansing, classifying, and analyzing purchase and expenditure data should go into one track for improved and faster internal processes. With a spend management system, a business can benchmark its spend percentage as a procurement cost.

ProcurePort – Unlock Limitless Spend Opportunities

Business spend management is critical to companies of all sizes and sophistication. It provides a high level of control and transparency that drives growth, reduces risks, increases profits, and introduces operational efficiency. ProcurePort makes any strenuous and complex procurement process a breeze. ProcurePort allows enterprises and clients to simplify procurement processes and carefully analyze their spending. ProcurePort brings business spend management to life with a robust, intuitive digital platform that supports sophisticated processes such as inventory management, budgeting, advanced sourcing, product lifecycle management, and supplier information management.

Contact ProcurePort and unleash the power of business spend management.

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