Introduction

These day technology has made it easier to track business expenses, make capital, allocation decisions and identify trends. Spend management software has a huge impact on how companies handle their money. It works with the financial systems they already have and shows them where their money is going right away. This leads to smarter choices about spending and helps improve their profits.

Yet, for a business to grow, searching for the right spend management software is a challenge. Whether you run a small business and want a simple way to manage spending or are part of a big company that needs a complex system, this article will help you choose. Your decision can boost your business’s success and lead to lasting financial well-being.

What is spend management?

Spend management is the process of monitoring and managing an organization’s spending to ensure resources are used wisely and effectively. It combines various activities to reduce costs while maintaining operational quality and efficiency. From buying supplies to handling petty cash, travel, and operational expenses, expense management covers all aspects of a company’s financial outflows.

Expense oversight typically encompasses all purchasing, business costs, and procurement processes (buy-to-pay) a company undertakes. Moving beyond outdated manual methods, modern expense oversight emphasizes faster processes while encouraging strategy development and adaptable planning. This approach helps organizations make smarter financial decisions and optimize their resource allocation.

Spend Management Example

Consider a small business navigating the complexities of operational costs, including office supplies, utility bills, and employee salaries. Implementing a robust spend management strategy tracks outgoing expenses through financial software.

This approach enables the identification of spending patterns, facilitates budget adjustments, and promotes strategic decision-making to ensure financial sustainability, demonstrating effective spend management on a corporate scale.

Is Spend Management the Same as Expense Management?

Although both spend and expense management are crucial for a company’s financial well-being, they have distinct characteristics. Businesses must comprehend these distinctions to implement successful financial management strategies.

What is spend management software?

Spend management software is a tool that helps organizations and individuals track, manage, and optimize their spending and expenses. Efficient expense control technology enables finance departments to stay updated, monitor expenditures, and oversee all monetary transactions. This provides transparency, generates insights, and prevents unauthorized spending. Top spend management software enables companies to manage and enhance their financial outlays through features for planning, monitoring, evaluating, and documenting spending information. It enhances financial transparency, ensures guideline adherence, and uncovers potential expense reductions.

Why does a Business Need a Spend Management Platform?

Spend management software is helpful for a business in managing and tracking spending. Check out the advantages below:

Optimize Spend

Spend management software gives you a clear picture of where your money goes in real time, helping businesses find ways to save. By keeping an eye on expenses as they happen, companies can spot chances to cut costs. This quick insight lets them take fast action to reduce unnecessary expenditures. real-time instance, a business might see they’re spending too much on office supplies and work out better bulk deals with their supplier. The software can also point out duplicate subscriptions or services you’re not using that you can cancel, leading to quick savings.

Increase Control

Spend management software helps companies streamline purchasing processes and stick to company rules and laws. The best spend management platform can stop fraud and ensure all purchases are real and necessary. It does this by setting up approval workflows, limiting spending, and pointing out unusual transactions. This better control saves money and cuts down on money risks. For example, the software can say no to purchases that exceed set budgets or ask for more okays for big-money transactions.

Drive Cost Savings

Spend management software helps companies cut down on extra costs and strike better deals with suppliers. Businesses can save money by considering spending and spotting ways to reduce expenses. Spend management software can look at spending across different parts of the company, find the cheapest suppliers, and suggest other products or services that give more bang for the buck. As time goes on, these insights can save a lot of money. Take this example: a company might find out they’re using several vendors for similar things and decide to buy from fewer places to get big discounts.

Improve Visibility

Spend management software provides detailed and up-to-date insights into spending, allowing businesses to understand their financial situation better. This improved visibility helps organizations make informed decisions and identify areas to save money. With real-time dashboards and customizable reports, managers can quickly see where money is being spent, compare actual expenses to budgets, and forecast future spending needs. This clarity can be crucial for strategic planning and resource allocation.

Enhance Governance and Compliance

Companies can use spend management software solutions to enforce their policies and ensure compliance with various regulations. The software helps ensure that purchases adhere to company rules, reducing the risk of fraud and misuse of funds. It can automatically flag transactions that violate policy or require additional documentation, ensuring all spending is above board. This protects the company financially, helps maintain its reputation, and avoids potential legal issues.

Precise Analytics

Real-time expense tracking gives you peace of mind. Accurate spending data helps finance teams understand costs, streamline supply chains, and optimize budgets. Detailed reports provide critical business information for smarter decisions and future planning. With comprehensive analytics, you can breathe easier knowing you have complete visibility into company spending.

Complete Audit Trail

Being able to review any purchase easily is crucial for improving processes. Whether you need to check vendor details, manage complex approvals, or enhance systems – a complete audit trail is valuable and necessary. Having a record of every transaction allows you to refine your end-to-end workflows.

Fraud Prevention

Reducing risk is a vital part of spend management and practical procurement tools. Best spend management software updates market trends, supplier metrics, contracts, and pricing. Tracking when goods arrive and verifying vendor information helps prevent various types of accounts payable fraud. You can better protect your business from financial risks with the right tools.

What are the Features of an Ideal Spend Management Software?

Spend management software is a digital tool that helps companies oversee, manage, and examine their expenditures. It provides a unified system to monitor costs, simplify approval processes, maintain compliance, and understand spending trends. Expense management platforms handle various financial tasks, from worker reimbursements to vendor payments. Check out the features below:

1. Expense Tracking:

Effortlessly monitor and classify all expenditures as they occur, whether made by your staff, external contractors, or suppliers. This real-time approach ensures accuracy and up-to-date financial records.

2. Workflow Approval:

Create custom approval chains and streamline the authorization process. This automation reduces unnecessary delays and helps maintain regulatory compliance across your organization.

3. Receipt Capture:

Utilize user-friendly mobile applications to capture and store receipts digitally. This feature significantly reduces the need for manual data entry, saving time and minimizing errors.

4. Policy Enforcement:

Implement rule-based validations to ensure all expenses align with company guidelines. This proactive measure helps prevent policy violations before they occur.

5. Analytics and Reporting:

Create detailed reports and analyze your spending data. These insights will help shape and improve your future spending management plans, leading to informed financial decisions.

6. Procurement-to-PO:

Submit purchase requests from approved sellers and quickly turn approved requisitions into purchase orders. This improves the buying process from start to finish while following buying guidelines.

7. Cost control:

Monitor expenses without hassle. Staff can submit costs, ensuring they follow policies and receive prompt reimbursement.

8. On-the-go mobile access:

With phone apps, team members can use spending tools away from the office. This lets them handle purchases, expenses, and approvals from anywhere, anytime.

9. AP automation:

Automate invoice processing with fast intake, AI data extraction, and easy matching and approval workflows. This cuts down on manual tasks and speeds up payment cycles. Automated systems improve accuracy, reduce time, and reduce the risk of overpaying or paying bills twice.

10. Seamless integrations:

Transfer data by connecting with existing accounting or ERP systems, keeping financial operations consistent and accurate.

11. Budgeting and forecasting:

Spend management software helps users create and handle budgets, compare spending to budgets, and predict future costs.

12. Expense reporting:

These tools create detailed expense reports that you can use to do accounting, handle taxes, or get money back.

13. Approval workflows:

Many spend management programs have built-in approval steps to ensure expenses are checked and okayed before payment.

14. Integration with financial systems:

Best spend management software can link up with accounting programs, bank accounts, and credit cards to bring in and sort transactions.

15. Analytics and insights:

Advanced spend management tools give data-based insights and analysis to help users spot spending trends, cut costs, and make smarter money choices.

Top 11 Spend Management Software Solutions For 2024

Various top spend management software is available for businesses of all sizes. Check out some of the best spend management solutions available.

Procol:

Procol is a best spend management software that provides a comprehensive solution to help organizations gain control over their spending, achieve significant cost savings, and streamline their procurement processes through its advanced features and capabilities.

Key Features of Procol:

• Custom procurement workflow templates: Procol offers custom templates based on business use cases and needs.

• In-app communication: The software enables in-app communication between users.

• Ready-to-use templates: Procol provides ready-to-use templates for quick ordering of supplies.

• Purchase request management: The software standardizes purchasing through purchase requests and ensures smooth transitions from request to payment.

• Purchase order management: Procol allows users to track and approve purchase orders and capture all necessary information for the accounts payable team.

• Expense request management: Users can create and submit standardized expense requests from desktop or mobile.

• Contract management: The software helps store contracts in a centralized repository and track current spending against the total contract value.

• Automation: Procol functions as purchasing software that automates the purchase process and reduces cycle time.

• Mobile-first app: Procol offers a mobile-first app for ultimate convenience, allowing users to manage procurement tasks on the go.

• AI-enabled: The software uses AI to provide accurate predictions and results.

• Sourcing Pro: Procol’s Sourcing Pro feature caters to specific needs based on industry and category, such as project sourcing, indirect sourcing, and strategic sourcing.

Coupa:

A top choice for big companies, this tool works well for tech firms and prominent organizations seeking a unified approach to managing various spending channels. It’s a robust system that can handle much, but it might be too much for smaller businesses.

Brex:

Brex lets users open bank accounts, get routing numbers, and link corporate credit cards. Its cash management platform can cut time by skipping the setup and integration needed with most systems. The interface is easy to use, but frequent changes in limits and rules can annoy users.

Expensify:

A receipt and expense tracking software great for small and medium businesses, Expensify offers a simple way to manage purchases. It lets users log expenses, request purchases, and get paid back. Uploading receipt photos is easy, and the mobile app gets good reviews. However, it only works with a few banks and credit cards, so users should check carefully before buying.

ERPs:

Enterprise resource planning tools are standard software packages various organizations use to manage payable functions, like spending, with a central system. Netsuite is a popular ERP that offers many customization options, searchable spending data, and easy reporting. However, all this customization requires a lot of upkeep, and customer support is only sometimes available.

Order. Co:

Spend management through the Order.co platform makes it simple to control spending. Order. Co offers pre-approved and preferred vendors, simplifies the request and purchase order approval process, and automates invoice payment for any amount of purchases in your organization.

The platform has centralized spend analysis features that let you analyze trends using real-time data insights from your procurement process. You can also see your spending by category, user type, department, location, or project. The procure-to-pay features of the system allow users to get products through approved channels, route approvals, and make payments automatically to save time and reduce mistakes.

Airbase:

Focused on meeting the needs of companies “from startup to IPO,” Airbase offers a scalable solution to spend management. This is especially true for accounts payable, corporate card programs, and employee expenses. The platform markets its services as an all-in-one solution for non-payroll spending. Airbase serves customers from the computer software, IT services, financial services, and automotive industries.

Spendesk:

This all-in-one tool provides solutions for managing individual employee spending. It covers employee spending challenges, corporate card service, invoice payments, spend approval workflows, reimbursements, budgeting, pre-accounting, and compliance features. The system makes it easy to submit expense reports, track spending automatically through corporate cards, and pay invoices. It has an app for entering new expense data and works with Slack to route directly to these channels instead of email.

ProcureDesk:

ProcureDesk is an all-in-one expense management and procurement solution that enables you to monitor every dollar your business leaves. From purchase orders and invoices to credit card charges, ProcureDesk provides a unified platform for overseeing expenditures, implementing controls for effective cost management, and streamlining invoice processing.

Procurify:

Procurify is a web-based system designed to help medium-sized companies optimize their spending and procurement processes. It delivers real-time expense insights, approval workflows, and policy adherence. Its user-friendly dashboards and reporting tools monitor transactions, manage workflows, and allocate budgets.

Rippling:

Rippling is a comprehensive system that integrates HR, IT, and Finance operations, enabling efficient automation to streamline business workforce management. Rippling Spend combines all your company’s financial aspects—from payroll and benefits to corporate cards and expense management–providing real-time visibility into company-wide cash flow and offering unparalleled control over expenditure trends.

Conclusion

Spend management refers to strategies organizations implement to oversee financial outflows. While often confused with expense management, these concepts differ. Expense management focuses on recording, monitoring, and reimbursing employee costs, whereas spend management encompasses a broader scope.

Having the right spend management software will not only simplify financial processes but also unlock opportunities for savings and growth, contributing to a healthier bottom line. As organizations strive for greater financial efficiency and strategic spending, the insights offered by these software solutions will be invaluable in navigating the complexities of the modern economic landscape.

See Procol in Action