For chief procurement officers (CPOs), it’s crunch time. Stubborn inflation, high interest rates, and a weakening economy are all weighing down companies’ bottom lines. It’s up to CPOs to navigate choppy financial waters, improve spend management, and map a course toward long-term profit.
Unfortunately, most procurement leaders have limited spend visibility. That can feel like trying to captain a massive ship through uncharted seas without a map or a compass.
There are ways to dramatically clear up spend visibility. Here are the common factors blocking spend visibility and four ways to leverage spend visibility to hit your financial goals.
What’s Blocking Financial Leaders’ Spend Visibility?
No matter how many hours you spend searching for better spend data, it may just not be available. For many procurement leaders, spend visibility is often blocked.
Wondering what’s limiting spend visibility? There are a few common culprits:
- Rogue spending: Too often, employees will purchase goods and services through unapproved suppliers outside the company’s approved buying channels. This not only causes procurement risks and can cost the company money, but it also means that spend data is flying out the window. Spending information vanishes into the abyss, and it’s nearly impossible to use it to inform your procurement strategy.
- Manual input errors: Even when a company has relatively high spend, the high spend data can easily become corrupted. That’s because the risk of input errors shoots up when companies rely on manual procure-to-pay (P2P) processes. Every mistake taints your spend data and makes it difficult to see what strategic moves will save your organization money.
How to Increase Spend Visibility
The easiest way to enhance spend visibility is to adopt advanced SpendTech, or spend management technology. This technology increases spend under management and compiles spend data in a single location, so procurement leaders can easily see how the company is spending, where to reduce costs, and what savings opportunities to seize. Here are a few ways to use SpendTech to widen spend visibility:
- Centralize digital purchases: The best P2P solutions will include a centralized digital marketplace that is easy to use. These tools allow employees to quickly find and purchase goods or services through approved suppliers. That increases spend under management and feeds you clearer spend data.
- Digitize procurement and AP: By digitizing procurement and the AP process, you can manage all of your company’s procurement tasks on a single platform. You can track requisitions, purchases, invoices, payments, and more all in one system. By rolling all of the company’s data into a single place, it’s easier to see your company’s full spending story.
- Automate the P2P process: Automated P2P solutions rely on AI and machine learning to eliminate manual tasks. In turn, there are fewer human touch points within your P2P process, employees won’t be typing up information manually, and your error rates fall. That all leads to more accurate spend data that you can use to map out a faster path to growth.
How to Leverage Spend Visibility
Once accurate spend data is flowing into a single platform, your spend visibility will become crystal clear. Here’s how you can use better spend visibility to give your company a sharp financial edge:
- Strengthen strategic sourcing: Clear spend insights reveal what suppliers you’re working with, which supplier discounts your company is using, how much spending is done under contract, and what strategic sourcing decisions you could make to gain an advantage.
- Identify where you have leverage and improve negotiations: With full insight into how your company is spending, you can identify how much spend volume you’re pushing toward suppliers. As a result, you spotlight instances where you have built up leverage and you can use that information to negotiate better deals.
- Build supply chain resilience: By widening spend visibility, you can understand and manage your supply chains more efficiently, build supply chain resilience, and keep finances flowing when supply chains are disrupted. Technology makes it easy to manage and track the orders you’ve received from suppliers and flag delays, non-deliveries, or instances of fraud—long before they hold up your operation.
- Create more accurate budgets and forecasts: With automated P2P solutions, you don’t need to scrape together data from multiple spreadsheets or worry about input errors. Instead, financial data streams into a single system—where you can access clear budgeting data and build out more accurate forecasts.
Learn More Ways to Upgrade Your Company’s Financial Performance
The right SpendTech can broaden your spend visibility, which can reveal clear opportunities to lower costs, improve sourcing, secure discounts, strengthen budgeting, and push the company’s bottom line higher. And there are more ways to use technology to inform and inspire smarter strategic procurement decisions; read Spend Matters: The evolution of corporate procurement systems to see how the latest technology is redefining what procurement teams can accomplish.
