Business growth comes in a variety of ways. But no matter how different their strategies may be, all growing companies must deal with one factor that is critical to long-term success: cash flow.
According to a recent IDC InfoBrief, the best way to control and optimize cash flow is to adopt technology that enables real-time insights, accurate forecasting, and risk mitigation. The study suggests that high-performing midsize businesses achieve higher levels of automation in areas such as audit and compliance; vendor invoice processing; and travel, booking, and expense reporting.
How can your business acquire the same spend management capabilities of your best-run midsize peers? It all comes down to knowing the fundamental concepts of procurement and expense management software.
What is procurement and expense management software?
Procurement and expense management software provides a single view of organizational spending to accelerate data-driven decision-making. It connects spending groups across the company and orchestrates measures that ensure that every purchase and investment adheres to all business and regulatory policies.
With improved control and compliance, you can procure goods and services with a higher degree of consistency, quality, and integrity and process purchase requests faster – even as spend categories, suppliers, and systems diversify.
How does procurement and expense management software work with existing and future business systems?
Procurement and expense management software is designed with the flexibility to integrate with new and existing business technology such as ERP, financial systems, and product planning applications. This capability helps break down data silos and aggregates finance, supply chain, and procurement information into one comprehensive view. As a result, decision-makers can clearly understand the ROI and overall value of every purchase.
By exchanging data with other business systems, procurement and expense management software helps post data from the expense function to your financial software to maintain continuous communication between systems and pay third-party vendors and suppliers faster. The entire spending process can be further refined by automating all related activities – from pre-spend approval and reconciliation to reporting and analytics.
While these process advancements are impressive, procurement and expense management software also empowers employees to comply with internal and regulatory requirements by simplifying the user experience with a focus on consistent governance. Suppose your business prefers traveling employees to use Lyft. The expense capability can be integrated with a Lyft app to guide employees to the right vendor and prepopulate expense reports submitted online or through a mobile device. In turn, if an employee needs to purchase office supplies or marketing services, vendors with negotiated pricing and catalogs can be served up to the user.
What benefits should growing businesses expect from procurement and expense management software?
One of the most significant benefits of procurement and expense management software is enabling finance, procurement, supply chain, and IT organizations to work together and tackle broader business challenges.
Finance leaders have the visibility necessary to direct budget toward top priorities and innovations as the core business grows. They can also stay ahead of increasing and evolving regulatory and tax changes and keep employees safe as they travel and work around the world.
Procurement teams can put cost reduction and savings front and center when managing performance and delivery risks across the supply chain. Diverse types of direct and indirect spending can be managed with greater control, better content, and a consolidated catalog. Procurement leaders can even increase productivity across their organizational processes and throughout the organization, so the best purchasing decisions are made at a faster pace.
What should growing businesses consider when selecting procurement and expense management software?
It is critical to choose procurement and expense management software that can scale at the same speed your company grows. Doing so provides the freedom to adapt and respond to changes in the marketplace with new business models or by tapping into a pool of new talent and suppliers.
For instance, you should be allowed to start with an procurement or expense module, then later add capabilities such as electronic invoicing and collaboration in a business network. Doing so enhances your ability to transact and collaborate digitally with suppliers and build better relationships with them.
Another essential component of a sound software investment is access to a partner ecosystem that understands your industry, regional, and business requirements. Partners may provide applications that address specific needs — such as cross-border tax and payroll compliance — and offer guidance and best practices for a systematic adoption of new capabilities.
What benefits does procurement and expense management software from SAP offer to growing companies?
SAP provides procurement and expense management software that grows with companies. They can start small and integrate existing technologies to modernize and expand the capabilities as needed.
For example, your growing company can access the world’s largest business network, where US$3 trillion of transactions are processed annually. Buyers can find suppliers that meet business needs and do not inject additional risk and complexity into daily operations. And thanks to its partner ecosystem, SAP is constantly innovating and introducing new applications – to date, there are over 200 apps available in SAP App Center.
With these capabilities and many more, businesses can run procurement and expense management processes that are intelligent – across every data source and spend category. And it’s all available with one unified view.
Discover what specific digital technologies mean to small and midsize companies. Bookmark the Getting Started series page to keep up with the basics of analytics, HR and people engagement solutions, digital platforms, procurement and expense management tools, and ERP and CRM applications.
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