Why is Spend Management Crucial during COVID-19 Pandemic?

COVID-19 has brought many changes in the accounting field, and accountants prioritize spend management as they consider it crucial. In times of economic uncertainty, there are a lot of buzzwords like risk management, accounting process, workflow processes, and spend management.

Why spend management is a key area of focus during recession times? Spend management is a broad word covering everything, including business spending, employee expenses, and other costs. The following are some reasons why accounting professionals should be well versed in spend management during COVID times:

Spend control takes the first place

The role of accounting professionals is not just to close the books but also to improve business operations to meet strategic goals. During this pandemic, it is quite natural for businesses to look for ways to control spending, and this is where spend management comes into the picture. Implementing a spend management system, creating a spend policy, and evaluating spend culture will help control costs and enables businesses to thrive through this uncertainty.

It is essential to notice that implementing a spend management system requires a shift from the traditional expense management process.

It’s important to note that implementing a successful spend management system requires a shift in focus from the more traditional expense management approach. It’s essential to recognize that expense management is strategic only as a component of the broader spend management framework. While expense management is designed to process, pay, and audit employee expenses, spend management encompasses everything an organization spends to stay in business and earn profits.

Analyzing Spending Leads to Better Business Decisions

Perhaps the biggest challenge the pandemic has brought with it is uncertainty, which in turn has compromised our ability to make decisions confidently. It’s unclear how long this will last, but it’s safe to say that it’s time to build a stronger foundation for making sound decisions by creating spend analysis into the core of the decision-making process.

Analyzing the data of what is being spent and where drives better business decisions. Spend data generates valuable insights that can help businesses streamline their procurement process and identify spend that can be deferred. With spend analysis; data can be sliced based on a wide range of KPIs.

Overage spending can be overlooked

Overage spending is difficult to identify for most businesses as people don’t know where to look. Expenses such as recurring subscriptions, printed marketing materials can be replaced with digital versions. With a clear picture of spending, it’s much easier to identify costs that are not required to operate a business. Then, you can analyze how much money can be saved, allowing you to find new business opportunities. A holistic spend management approach helps identify savings across different areas.

Spend management is essential for employees working remotely

Organizations have to work with each department that spends money to identify silos. Sometimes, this is as difficult as understanding where the money is being spent and introduces the risk of running out of cash. This is especially true for teams that relied on manual paper processes for approving expenses. These manual processes create bottlenecks that compromise efficiency.

Spend management enforces internal controls

Are your internal controls working efficiently? Are your employees comply with the spend policy? These are some of the critical questions to be asked, and the answers can be found by analyzing all spend aspects. This analysis not only improves internal controls and spending policies but enables effective risk management.

As we are going through this global pandemic, it becomes obvious that spend management becomes more than a buzzword and helps analyze spending, manage risk, and make business decisions. Robust spend management solution paves the way for valuable insights into organizational spending. In fact, the solution automatically enables them to track and manage to spend based on the data. With spend management software, businesses can spend their time reviewing internal controls, improving purchase workflows, and identifying cost savings. This pandemic acts as a great time to switch to spending management software as it can help companies succeed as time passes away.