Mismanagement of cash flow has emerged as one of the most prominent reasons for businesses’ failures.
New businesses especially struggle to maintain healthy liquidity in their day-to-day operations which leads to rigidity and eventual losses.
Being aware of your money investments and spending is a necessity for businesses to survive in the fast-paced market.
A spend management software solution helps you control your spending to maintain healthy cash flow in your business operations with ease.
In this article, we’ll explore the role spend management software plays in maximizing your ROI by streamlining spending in all areas of your business.
Maximizing ROI: the role of Spend Management Software in business growth
Spend management software is a tool that helps you organize your spending in day-to-day operations. It brings all your spending under one roof by:
- Making expenses through different channels,
- Tracking them,
- Approving expenses from different departments, and
- Generating reports and insights.
This comprehensive approach helps you streamline your spending and have a grasp of your financial situation at all times. It brings liquidity to your operations as you can allocate your resources better.
Integration with other platforms brings a cohesive workflow that eventually leads to the maximization of ROI. It also helps reduce the stress you may have regarding your spending by helping you take charge of it.
Let’s take a look at the role a spend management software solution plays in helping businesses grow by helping their finances:
- Spend management gets you a grip on your expenses
Managing cash flow is a major concern for businesses of all sizes. Many entrepreneurs face challenges keeping track of their spending and estimating how much money they may need at a certain point.
There’re many different ways to save money while keeping your identity hidden and making your online experience secure.
A spend management software is an excellent solution to help you get a hold of your finances. It puts your expenses into perspective and allows you to manage them much more efficiently.
Here’s a list of spend management software and the many benefits they offer.
It takes care of your non-payroll spending to ensure that you spend cautiously while adhering to your budget constraints, such as:
- Cost of raw materials
- Employee reimbursements
- Software subscriptions
- Business travel expenses
- Marketing costs
- Other utility costs
By tracking every expense you know exactly where your business is putting its resources and can scale back as needed. It helps you make the most out of every dollar you invest in your business by being mindful of your spending.
A spend software is especially helpful for businesses looking to expand their operations. The software solution keeps track of where you’re allocating your resources and does not let the liquidity falter.
- It integrates with other platforms to improve efficiency
A spend management software improves all areas of your business by offering seamless integration with software solutions used in every department of your business. Be it HR, Marketing, Accounting, or Manufacturing.
In the remote work era, where there’s a tech solution for every business question, It plugs into every department of your business to collect relevant data. It then processes the data to identify where you may be overspending and which area needs more resources allocated to it.
This gives you a better grasp of the operations in every department to pull the strings as needed. Departments will be more careful of the expenses they make when they know they’re being monitored.
The goal is not to have a tight grasp on all your departments but to have an awareness of the operations of a business on a large scale.
Let’s understand the role of spend software in enhancing ROI via integration with other platforms with two examples:
- Integration with travel management
Integrating your spending software with your travel management platform will help you control expenses by streamlining all your travel-related operations. These include:
- Flight or train tickets for long-form travel
- Bus tickets
- Local commute expenses
- Hotel or motel accommodation charges
- Meal payments
Every expense recorded by the travel management software will also be recorded in the spend management software, keeping the data in sync.
This’ll allow you to monitor the expense in real time and approve them to adhere to your budget. Spend software will help improve your travel management by providing you with the bigger picture of your finances.
You’ll be able to make travel plans depending on your current spending and your future plans regarding investments and spending.
- Integration with marketing
The marketing department of a company usually uses a plethora of software solutions to undertake various tasks. By integrating with all these solutions, you’ll be able to collect data about their current and future plans.
More importantly, you’ll be able to track the department’s spending on various marketing efforts such as:
- Promoting posts on social media
- Running ads on Google
- Conducting customer surveys
- Proving gifts and samples to customers
- Participating in social media
- Marketing your apps
- Running on-the-ground marketing efforts such as billboards and pamphlets
Spend management software helps you create more informed plans for your marketing efforts with the help of forecasting. You’ll be able to calculate and map out the plans better by using the data and analytics provided by the software.
Then when the plans are in motion, you can track them to know how they’re performing in real-time. This will help you tweak your efforts and avoid overspending. This directly impacts your ROI and overall growth.
- It enhances efficiency via automation
Spend management software uses end-to-end automation in your spend management to enhance its efficiency. You don’t have to put in manual work for it to perform its function, the software will perform routine tasks, such as gathering data and preparing analytics on its own.
This freedom has attracted more and more entrepreneurs, especially small business owners to the software solution.
The global spend management software industry is forecasted to show a growth of 11.2% till the year 2027.
Here’re some ways the software improves your overall efficiency:
- Lists out a variety of vendors with their pricing for the goods and services you purchase to help you make informed decisions.
- Identifies unnecessary purchases to help you get a hold of your spending.
- Reports generated by the spend software are used in cash flow management, budgeting, financial reporting, and auditing.
- Automates routine tasks that may take a large amount of manual hours and can often feel monotonous.
- Eliminates human error by freeing human employees from working on routine tasks.
Seamless automation of tasks makes spend management a well-oiled machinery.
- Frees you off working or supervising simpler tasks and directs your resources toward more important ones.
- Allows your employees to explore their creative sides and work more efficiently.
- It improves compliance
We talked about reports generated by the software being extensively used in auditing and other areas of financial management. One such area is legal compliance. The software ensures smooth compliance by generating accurate reports that feature real-time data.
Moreover, it ensures that you work with authorized vendors for the goods and services you purchase by presenting only legitimate options to you. Additionally, it keeps receipts and track of every vendor transaction to trace them back when needed.
This helps you create much more thorough compliance reports where everything is organized and can be traced to historic dates with ease. The software will build your company policy into its servers to make sure your operations always remain in compliance with regional, state, and federal law.
- It helps you strategize better
When every aspect of your spending is in control, it becomes easier for you to plan out your next move. If you wish to invest in new ventures, you can analyze the spending in your software to calculate if it will be a profitable venture or not. In fact, there are different ways in which you can avoid money drain while you’re starting up.
Moreover, you can calculate how you can adjust the new investment with your current schedule to ensure a smooth investment that doesn’t hamper your cash flow. The software offers on-demand advanced analytics data over and above routine analytics to explore future options.
The thorough analysis provided by the software helps you uncover hidden patterns that you may not have noticed otherwise. This will help you both avoid pitfalls and capitalize on opportunities.
Identify strategic sourcing opportunities to get ahead of your competitors. The software is also available on multiple screens, meaning you can work on your business from the comfort of your home with mobile devices and strategize better.
Optimize travel expense tracking and enhance your overall travel management process
In conclusion, integrating a travel management platform such as TravelPerk with spend management software not only saves time and money but also ensures better expense tracking and management as well as the overall well-being of your employees.
By automating the expense reporting process, you can streamline workflows, reduce manual data entry, and improve accuracy. This integration provides enhanced employee experiences, as travelers can focus more on their business trips without worrying about tedious expense tracking and reimbursement procedures.
Overall, the seamless integration of TravelPerk with spend management software proves to be a powerful tool that benefits both companies and their employees, fostering efficient and cost-effective travel management.