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What Is Spend Management and How Is It Changing for Small Businesses in 2021?

by Clevon Noel

Poor cash flow management is one of the leading failures of many small businesses. When managing a small business, it is critically important to manage cash flow. Managing cash flow is even more critical now that sales are less predictable given our current climate but as the saying goes, you must spend money to make money.

How much and how fast you spend depends largely on how well you plan your spending, that's where Spend Management comes in. Spend management is the process that a company uses to control its spending.

An efficient spend management process will help your business potentially make savings, reduce expenses, and give you a clearer insight into your business spending, resulting in you making informed decisions about your business. Without a clear understanding of how much money is being spent or where money should be spent, you're more likely to make mistakes with your moment and this is likely to cause problems for the business and even to the point where you run out of cash.

Managing company costs doesn’t have to be complicated. There are reasonably straightforward and effective methods to measure and manage expenditure, like implementing spend management software.

As we know it today, a good spend management system is usually a cloud software (such as Software as a Service–SaaS). A spend management software may include information on your business procurement, invoice management, expense management, budgets, inventory information, and supplier information. In addition, it can help with internal control policies, catching fraudulent invoices before they’re paid, and preventing overspending with alerts.

Spend management systems can save employees time with instant approval requests. You can set alerts and flag requests to specific employees. This is a more efficient operational strategy as it saves time. Some employees may waste a lot of time trying to manually create requests and get approvals.

Businesses can create their own spending policies and approval controls, ideal for their own business structure and business goals.

So, what is the future of spend management?

Due to technology advances and the shift to digital, specifically now due to the Covid-19 pandemic, the importance of online systems and access to data at your fingertips to make more timely and better decisions is essential for business today. Furthermore, with supply chains being disrupted, more than ever logistics and supply chains need to be looked at, to see if they are working and helping your business in such challenging and changing times.

Business owners today are using different software for their needs, businesses want a spend management tool that will seamlessly integrate with other software they are using such as XERO, Wave, Zoho Books, or QuickBooks. Having this integrate with your spend management tool is valuable.

According to a VP at SAP, “the impact of COVID-19 has accelerated trends that will not only lead to the diversification and localization of supply chains but also increase the need for digitalization and end-to-end visibility.” This means that businesses need more visibility on what is going on and a spend management tool can help with this.

Here at Metarelic, we are enabling businesses to track, manage and approve payment requests saving your business time and enabling you to be more productive. Get started today!

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