Did you know that, according to Clutch’s business survey, half of small businesses didn’t create a budget in 2020? This vital component of running a business is often overlooked, but without it, you can’t measure the financial success of your company.
And building a budget is only the beginning. Once you have it, spend management can help you monitor your business spending and help you stay on track with your financial goals.
If you’re new to running a business, you may believe that this process isn’t worth your time. Here, we break down the benefits of spend management and spend management software for your business.
Benefits of Spend Management
Spend management is the process by which a company monitors its spending in order to optimize its cash flow. It’s a similar process to building and sticking with a monthly household budget, except it’s for a whole business rather than a specific household.
In an ideal spend management process, spending is monitored at multiple levels of the company. This includes employee expenses and reimbursements, vendor payments, monthly technology subscriptions, and more.
To run a profitable business, you need to know how, where, and when money is being spent. If you don’t, you run the risk of spending more than your organization can afford, putting you at risk of losing profits or even going under. This is even more vital for small businesses, where the margin of profit to expense can be quite small.
How It Works
The spend management process starts with tracking all business expenditures. Then, you clean the expense data and divide it into spending categories. Finally, determine whether your current spending levels fit within your business’s budget or not.
Once you have all the current data lined up, you can figure out which categories of spending are on track and where you need to save money in the future. Communicate these goals with your employees. If necessary, create spending policies to keep the entire organization on track.
Automate Your Workflows
A thorough spend management process requires a lot of employee time and energy. Someone has to create the spending policies and ensure they’re being followed. They also have to track company and employee spending across all areas of the organization.
Without a centralized place to keep track of all of this data, things are bound to slip through the cracks.
With spend management software like Bento, though, you can automate many of these monitoring processes and see your spend data in real-time. It helps you save time on expense approvals and data analysis. It also makes sure that you don’t lose track of any of your company’s spending.
Invest in Spend Management Software Today
By now, you should agree that spend management is a critical component of running a financially healthy business. Use spend management software to make the process quick and easy, and watch your business’s savings soar!
Interested in learning more about business finances and spending strategies? Check out the other articles on our site about business, finance, and budgeting!