“Most organizations waste 𝟯-𝟰% 𝗼𝗳 𝗼𝘃𝗲𝗿𝗮𝗹𝗹 𝗲𝘅𝘁𝗲𝗿𝗻𝗮𝗹 𝘀𝗽𝗲𝗻𝗱 on excessive transaction costs, inefficiency, and non-compliance. For an organization with an 𝗮𝗻𝗻𝘂𝗮𝗹 𝘀𝗽𝗲𝗻𝗱 𝗼𝗳 $𝟮𝗕, eliminating that leakage could send $𝟳𝟬𝗠 𝗮 𝘆𝗲𝗮𝗿 𝘀𝘁𝗿𝗮𝗶𝗴𝗵𝘁 𝘁𝗼 𝘁𝗵𝗲 𝗯𝗼𝘁𝘁𝗼𝗺 𝗹𝗶𝗻𝗲"
- McKinsey & Company, A Roadmap for Digitizing Source to Pay
Organizations are under increasing pressure to better manage their financial health via tighter spending policies and controls. Companies that fail to implement a robust spend management system that can adequately capture, manage, and control every dollar that leaves the company bank account will be forced into a reactive approach to managing their costs and cash positions.
A disparate set of point solutions along with organizational data silos will introduce challenges such as rogue spending and low-value manual work to unreliable records and access control risks. It is important to provide a single source of truth for all spending data which can be accessed in real-time to promote better transparency, accountability, and collaboration.
Transforming into a spend management solution would involve expanding current capabilities beyond invoice processing to gain a more holistic view of the spending, making better decisions about how to allocate resources, and reducing the overall costs.
𝟰 𝘀𝘁𝗲𝗽𝘀 to take in transforming to a complete Spend management system
𝟭. 𝗜𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗲 𝘄𝗶𝘁𝗵 𝗼𝘁𝗵𝗲𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝘀𝘆𝘀𝘁𝗲𝗺𝘀: This will allow the AP solution to access data from other areas of the business, such as procurement, inventory, and finance. This will provide a more complete view of spend and make it easier to identify opportunities for savings.
𝟮. 𝗨𝘀𝗲 𝗱𝗮𝘁𝗮 𝗮𝗻𝗮𝗹𝘆𝘁𝗶𝗰𝘀: The AP solution can use data analytics to identify trends, patterns, and areas of opportunity for cost savings. This data can also be used to create budgets and forecasts.
𝟯. 𝗔𝘂𝘁𝗼𝗺𝗮𝘁𝗲 𝘁𝗮𝘀𝗸𝘀: The AP solution can automate tasks such as invoice processing, supplier management, and risk management. This will free up time for AP professionals to focus on more strategic activities.
𝟰. 𝗣𝗿𝗼𝘃𝗶𝗱𝗲 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗮𝗻𝗱 𝗿𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴: The AP solution can provide insights and reporting that help businesses to make better decisions about how to allocate resources and reduce their overall costs.
By taking these steps, AP solutions can transform into powerful tools that help businesses to manage their spending more effectively.