5 Effective Ways to Improve Spend Management
Spend management is one major issue a procurement department must take seriously.
Even in small businesses where there are no full-fledged procurement departments, implementing spend management is still very important. To effectively implement this, you will need to collate, maintain, categorise, and evaluate spend data. The goal is often to regulate compliance and improve efficiency. Are you saddled with the responsibility of implementing spend management? Here are five effective ways you can do it:
Perform a Detailed Spend Analysis
To implement spend management effectively, the first thing you need to do is perform a comprehensive spend analysis. Through this, you will have a better understanding of what you are spending and where to make changes. The analysis will help you identify key suppliers and savings opportunities you can target. You will also be able to minimise risk and expense that come with non-compliant or underperforming vendors.
Streamline Payment Methods
A standard procurement department can easily track and manage all purchasing activity. In the absence of this, staying on top of all employee spend can be very challenging. A simple solution will be to streamline payment methods. Finding a way to feed all spend data automatically into one company bill will make things a lot easier, and it will also improve accuracy.
Define the Approval Process
In addition to streamlining payment methods, you need to define and clarify the approval process with everyone involved in procurement in your organisation. Every employee that can spend on behalf of the company must know who to approach for approval, and there must never be any form of conflict. When everyone understands the approval process and respects it, procurement will be less frustrating. Mistakes will be minimised, and no one will have to cut corners.
Use E-Procurement Software
There are several spend management and e-procurement software that can help you implement the process. Some of these platforms can be integrated as an all-in-one solution or as individual platforms that will make your work easier and more accurate. With this software, you can effectively capture tail spend data and get the information in a comprehensive form in your dashboard. From the data you receive, it will be easier to make decisions and implement changes.
Invest In Education and Training
If you have a procurement department in your organisation, investing in education and training for every member will be beneficial in many ways. Even if you don’t have a standard procurement department, you can train everyone involved in procurement. This is even more important if you have integrated an e-procurement software. When every person on the team is well-trained and on the same page, implementing spend management becomes easier.
Spend management is important to keep your business or organization profitable. Fortunately, you can improve the process by performing a comprehensive spend analysis, streamlining payment methods, and using a management software. For effective results, it is important that you do it right. Implementing the effective methods discussed above will help you achieve your objectives.