What is spend management?
Spend management definition
Spend management is the tried and true practice of comprehensively managing all supplier relationships and company purchasing to identify every dollar spent and get the most out of it. Spend management best practices integrate and automate all spend-related activities from source to settle so that buying happens as planned and suppliers get paid in compliance with contracts.
How spend management works: Processes are digitised and consolidated
Spend management begins with the digitalisation of sourcing, contracting, and purchasing processes, along with processes for managing suppliers, invoices, and payments. These functions are then consolidated into one simple, intelligent process carried out on a single, cloud-based platform integrated with a digital business network. This makes it possible to gather and analyse all spend data, gaining insight into company spending across the entire organisation
The benefits of spend management
By taking a big-picture view of spending, more addressable spend can be brought under management, driving more organisational value. The value is derived from:
- Greater efficiency – from automating manual, error-prone processes
- Lower supply costs and risks – by knowing exactly what is being bought, from whom, and for how much
- More effective collaboration – between trading partners and cross-functional teams
- Improved productivity – by freeing time and resources to focus on more strategic activities
Get more spend under management and the most out of every dollar spent by integrating and automating all spend activities from source-to-pay.
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Turn insights into action
Using spend management software, you can turn insights into action in an interconnected, end-to-end process:
- Sourcing is performed from a stronger negotiating position to receive better pricing from suppliers
- Contracts are written in real time, then stored in a centralised repository to facilitate visibility and compliance
- Purchasing is controlled by guiding employees to buy from preferred suppliers at negotiated prices
- Supplier lifecycle and performance are managed with a 360-degree view of reliable, up-to-date data
- Multitier supplier visibility mitigates supplier risk and potential threats to operations, image, and revenue
- Invoice capture, workflow, and approval are automated to eliminate exceptions and ensure compliance with contracts and purchase orders
- Collaborating with suppliers, payments are managed to increase free cash flow, improve working capital, and capture early-payment discounts
Explore spend management solutions
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