Let’s face it: Saving money can be expensive.
Finance teams consistently try to find new and innovative ways to cut costs. Large firms often invest to improve operational performance and enhance efficiency, aiming to free up cash flow in order to bolster balance sheets or use for future investment.
But setting cost reduction targets is hard. Managers often have to establish objectives in line with their peers because they lack insight into their own operations, due to unavailable or unreliable data. Managers need to tackle the true drivers of departmental costs—otherwise savings won’t stick and the team will miss targets.
Sweeping cost reduction efforts on travel, subscription and service plans, or office supply purchases is not necessarily the answer. Instead, by improving the visibility and value of your spend data, decision making becomes more accurate, agile, and intuitive.
Here’s how real-time spend visibility improves efficiency and decision-making for finances teams.
From day one, modern spend management platforms automatically gather and process accurate data, enabling finance teams to easily identify and analyze trends that could lead to procedural improvements and eliminate inefficiencies.
Companies are often apprehensive when deciding to introduce big-data analytics into their systems. But instead of overwhelming complexity, real-time data can lead to more simplicity, opportunity, and improved customer experiences.
According to a survey by NVP, 48% of “Fortune 1000” companies say they are competing on data and analytics and only 28% have forged a data-driven culture. Cultural challenges are the primary obstacle.
Making Smart AND Fast Decisions
When analyzing spend data, CFOs and finance team leaders can take on a business-wide holistic view. Maintaining old spend management systems only holds the business back. Multiple technologies and workflows compete, leading to data duplication and system errors that make it more difficult to get that necessary holistic overview. With data-driven decisions, companies reduce the risk of implementing incorrect or inefficient strategies and remain driven by what has worked historically.
And companies have found success, with 69% of firms stating that better strategic decisions were made and 54% reporting improved control of operational processes when using real-time data, according to BARC Research.
Consider a sales team of 50 people. They travel to clients, spend on entertainment, and have targets to exceed. Meanwhile, finance teams are focused on tracking their spend. But if sales teams don’t submit expenses after each trip—and instead wait until the end of the month or quarter—finance teams have no time to analyze the data or accurately budget for the future.
Efficient Processes + Better Decisions = Higher Profits
Being able to make smart decisions faster, as well as streamline processes, will likely lead to greater success in exceeding targets and improving operational and financial performance.
And because spend visibility provides greater insight into all areas of a company, including compliance, purchasing behaviors, or supplier evaluation, finance teams can better understand the financial health across staff, departments, and the entire company. Holders of this data could decipher:
This analysis could be vital when allocating cash flow across the business and identifying cost saving opportunities, including changing supplier order flows or adjusting what is considered in or out of policy. Small, effective changes can often lead to large savings and greater profitability. Teams gain access to an almost infinite amount of insight and data, and each piece of information brings greater visibility for strategic and directional decision making. Without it, making decisions and implementing efficient processes becomes significantly more difficult. And that could mean being left behind, as your competitors invest in data to grow their businesses.
The Path Forward
The introduction of a modern spend management platform with real-time spend data like TripActions Liquid provides a major opportunity for organizations to gain a competitive advantage over industry rivals. The efficient processes that result become cost reductions that stick, and the time saved can be put to better use elsewhere. TripActions Liquid’s real-time spend visibility removes this uncertainty and helps the user more accurately predict future expenses, take immediate corrective action if budgets are exceeded, and track the entire procurement cycle.