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  • Writer's pictureRavikiran Papthimar

Accounts Payable into a Spend Management Solution

โ€œMost organizations waste ๐Ÿฏ-๐Ÿฐ% ๐—ผ๐—ณ ๐—ผ๐˜ƒ๐—ฒ๐—ฟ๐—ฎ๐—น๐—น ๐—ฒ๐˜…๐˜๐—ฒ๐—ฟ๐—ป๐—ฎ๐—น ๐˜€๐—ฝ๐—ฒ๐—ป๐—ฑ on excessive transaction costs, inefficiency, and non-compliance. For an organization with an ๐—ฎ๐—ป๐—ป๐˜‚๐—ฎ๐—น ๐˜€๐—ฝ๐—ฒ๐—ป๐—ฑ ๐—ผ๐—ณ $๐Ÿฎ๐—•, eliminating that leakage could send $๐Ÿณ๐Ÿฌ๐—  ๐—ฎ ๐˜†๐—ฒ๐—ฎ๐—ฟ ๐˜€๐˜๐—ฟ๐—ฎ๐—ถ๐—ด๐—ต๐˜ ๐˜๐—ผ ๐˜๐—ต๐—ฒ ๐—ฏ๐—ผ๐˜๐˜๐—ผ๐—บ ๐—น๐—ถ๐—ป๐—ฒ"

- 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.

๐Ÿฐ ๐˜€๐˜๐—ฒ๐—ฝ๐˜€ to take in transforming to a complete Spend management system

๐Ÿญ. ๐—œ๐—ป๐˜๐—ฒ๐—ด๐—ฟ๐—ฎ๐˜๐—ฒ ๐˜„๐—ถ๐˜๐—ต ๐—ผ๐˜๐—ต๐—ฒ๐—ฟ ๐—ฏ๐˜‚๐˜€๐—ถ๐—ป๐—ฒ๐˜€๐˜€ ๐˜€๐˜†๐˜€๐˜๐—ฒ๐—บ๐˜€: 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.

๐Ÿฎ. ๐—จ๐˜€๐—ฒ ๐—ฑ๐—ฎ๐˜๐—ฎ ๐—ฎ๐—ป๐—ฎ๐—น๐˜†๐˜๐—ถ๐—ฐ๐˜€: 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.

๐Ÿฏ. ๐—”๐˜‚๐˜๐—ผ๐—บ๐—ฎ๐˜๐—ฒ ๐˜๐—ฎ๐˜€๐—ธ๐˜€: 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.

๐Ÿฐ. ๐—ฃ๐—ฟ๐—ผ๐˜ƒ๐—ถ๐—ฑ๐—ฒ ๐—ถ๐—ป๐˜€๐—ถ๐—ด๐—ต๐˜๐˜€ ๐—ฎ๐—ป๐—ฑ ๐—ฟ๐—ฒ๐—ฝ๐—ผ๐—ฟ๐˜๐—ถ๐—ป๐—ด: 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.

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