Today’s macroeconomic environment is largely characterized by persistent inflation, slowing sales, profitability concerns, and a looming recession. This has caused many smaller businesses to take reactive measures, cutting costs wherever and however they can. Cost cutting without a thoughtful spend management strategy, however, is not typically sustainable and can actually be harmful, even during a recession.
Learn how proper spend management can help protect your business and appease your recession fear.
What Is Spend Management?
The fundamental goal of spend management is to consistently improve an organization’s spending. Unlike cost cutting — which often includes layoffs, downsizing, and other drastic measures — spend management aims to mitigate financial risk while taking into account an organization’s broader priorities.
What’s more, accurately forecasting spend has a direct impact on your future profitability.
Companies often face hurdles to proper spend management, including complex processes, a vulnerability toward human error, and a lack of data visibility.
For these reasons, spend management is best executed with the help of Business Spend Management (BSM) software. Coupa’s BSM platform has streamlined spend activities for countless organizations, helping them make smarter supply chain decisions, automate workflows, manage suppliers, and more.
Because spend management is becoming more technology-focused, organizations can automate processes around invoicing, payments, contracts, procurement, and obtain real-time data on opportunities. This contrasts with traditional processes, which typically involve quarterly or annual procurement analysis.
Cost cutting, on the other hand, is still a fairly manual approach, and it’s often a short-sighted one in the face of a downturn. For example, too much cost cutting in the form of layoffs is risky, because it can lead to a labor shortage down the line when the business bounces back and you need to ramp up quickly.
Similarly, shutting down branches of an organization in the name of cost cutting may leave it unable to handle production as the business environment improves. Not to mention, laying off employees often comes with other expenses including severance pay, rehiring costs, and unemployment benefits.
But faced with a potential recession, many of our clients have expressed concern about profitability and the overall financial strength of their organization. Generally, cost cutting in uncertain economic times is not necessarily the answer.
While top-line growth might take a hit in the next year, Coupa spend management solutions can help you grow your bottom line.
In fact, many of our clients have been surprised by the ROI that spend management provides.
How Your Organization Can Benefit from Spend Management Today
Gain visibility into business spend to drive savings, maximize profits through greater efficiency, invest strategically, control spend leakage, reduce risk, and improve supply chain resiliency – all critical in an uncertain market.
Learn more about the value of spend management and how it can benefit your business in economic instability and support your bottom line.
You may already use automation in your organization, for example, in customer support or marketing. Spend management is another area of your business you can automate, saving valuable time and money as well as optimizing processes.
BSM software can automate the following tasks and more:
- Expense reporting
- Contract workflows
- Payment orchestration
- Error and fraud detection
The benefits of automation are no secret, but automating your spend management processes is especially beneficial because in addition to its time-saving qualities, it also decreases the likelihood of human error.
With the threat of recession on every executive’s mind, preparation is a necessary component of any organization’s procurement process. Market volatility is practically inevitable, and preparation equips organizations to identify issues before they become catastrophes and to have a plan in place to navigate around them.
Preparation is simpler and more fruitful when it’s backed by predictive machine learning tools. For example, Coupa Spend Analysis uses advanced AI-powered insights to help businesses assess performance, set goals, and maximize return on investment (ROI).
With this tool, you’ll have a unified lens from which to view your organization’s spend. In turn, your organization will be better prepared to navigate fluctuations in the market and economic uncertainty. Plus, with accurate spend forecasts, you’ll be empowered to make smart and strategic budgeting decisions.
Supplier Relationship Management
Communication challenges in the supply chain are all too common. Maybe you haven’t set clear expectations with your suppliers or don’t have a dedicated channel from which to communicate. Whatever the reason for the breakdown of communication between you and your vendors, there are solutions.
The Coupa Supplier and Third-Party Risk Management application helps businesses accelerate supplier onboarding, monitor vendors’ risk and performance, maximize supplier collaboration, and more.
Say you’re missing information on an invoice. This Coupa feature eliminates the need for phone calls and emails as it sends automatic follow-ups requesting the required information. This means you’re able to get the answers you need quicker without having to play “phone tag.”
Coupa’s Supplier and Third-Party Risk Management tool also provides organizations with artificial intelligence (AI)-driven data insights so they can monitor spend at risk and increase their overall supply chain visibility. By knowing which suppliers provide the most value, organizations can become more efficient and cost-effective.
Coupa has also negotiated discounts with many of our client’s preferred vendors helping their business dollars go further.
Work With Us
Spend management software helps organizations enhance supplier collaboration, eliminate manual processes, prepare for turbulence in the supply chain and more. In a time when every dollar counts, Coupa’s tried-and-true BSM platform will help you balance business growth and profitability.
Our team of procurement and finance professionals can help you with the implementation, ERP integration, training, and optimization of Coupa’s spend management software. Plus, once your new system is up and running, we’ll answer questions and help you resolve issues before they disrupt your operations.
Get a free assessment today to see how our dedicated Coupa implementation team can help your organization maximize the value of each dollar you spend.