Spend management

Spend management software: 2024 expert’s guide

How spend management software drives process optimization and cost reduction

Is the process for purchasing goods and services and submitting expenses manual or paper-based in your company? Does your team spend countless hours chasing approvals, searching for and matching documentation, and manually keying in invoice data? If so, you're not alone. 

These inefficiencies not only waste valuable time but also increase the risk of errors and hinder your team's productivity. Many finance teams face the same challenges in managing their organization's processes for operational spending.

Fortunately, there's a solution that can help you gain complete control over your company's spending, its processes, and compliance: introducing spend management software.

Let's explore the core features and advantages that spend management software can bring to your business.

What is spend management software?

Spend management software is a comprehensive tool designed to track and manage operational costs. Typical examples of operational costs, also known as indirect spend include office supplies, rent, utilities, professional services, marketing, travel and expenses, and subscriptions. 

The software's primary role is to provide organizations with complete visibility and control over their spending, ensuring that every dollar is accounted for and optimally used. This software facilitates the management of processes ranging from purchase requisitions, approvals, and purchase orders (POs), invoice and accounts payable tasks, to expense reports.

Beyond basic requisitioning, purchase orders, and receipt capture, spend management software offers a holistic solution for total spend visibility and control. It integrates various processes into a unified platform, allowing for seamless handling of purchasing, expense, and accounts payable functions. 

With features such as automated workflows, real-time budget tracking, audit trails, and centralized data management, this software ensures that the entire spend lifecycle is efficiently managed, compliant, and auditable.

Some spend management platforms stand out due to their advanced analytics capabilities and the integration of artificial intelligence (AI). By leveraging these technologies, the software can automate repetitive, error prone tasks and provide deep insights into spending patterns, enabling purchasing and finance teams to identify cost-saving opportunities. 

This data-driven approach empowers finance leaders and professionals to make informed decisions, optimize budgets, and enhance overall financial performance with speed and accuracy.

Spend management software is designed to simplify and streamline the entire procure-to-pay process. By automating and integrating various tasks, this software can help you reduce administrative burdens, improve operational efficiency, and drive cost savings. One of the key benefits of spend management software is the increased visibility it provides into your organization's spending. This enhanced visibility ensures that you have a clear understanding of your operational spending, the vendors you’re purchasing from, which departments and budgets are on budget or overspending, and enables timely and proactive spend control.

Additionally, spend management platforms offer budget-friendly solutions by optimizing spending and reducing unnecessary costs. By automating routine tasks and minimizing errors, the software helps you achieve greater accuracy and efficiency in your financial processes. This not only saves time but also translates into significant cost savings for your organization.

Why Deploy Spend Management Software

Why deploy spend management software?

Deploying spend management software offers unique advantages that can significantly enhance your organization's financial operations. Here’s how:

1. Operational efficiency

Spend management software simplifies and streamlines the entire procure-to-pay process by automating workflows for purchase and expense requests, approvals, purchase order management, and invoice processing. 

These automated workflows ensure that each step is handled efficiently and accurately, reducing manual intervention, minimizing errors, and accelerating the procure-to-pay process. This frees up more time for your team to focus on more strategic tasks.

2. Unmatched spend visibility

Gain real-time insights into every purchase, expense, invoice, and approval, complemented by powerful reporting and analytics features. 

Spend management software provides a comprehensive view of your organization's spending, enabling you to track spending across employees, departments, projects, budgets, and vendors. This visibility ensures that you have accurate and up-to-date information to make informed financial decisions, identify trends, and spot any irregularities or overspend.

3. Effortless savings

Effective spend management drives cost savings by automating and streamlining the entire procure-to-pay process, reducing the time and resources needed for manual tasks. It provides real-time visibility into spending, allowing businesses to identify and eliminate maverick and unnecessary expenditures. 

Enhanced analytics help uncover spending patterns and negotiate better terms with vendors. Additionally, automated approval workflows ensure compliance with budget policies, preventing overspending and fraud.

By optimizing these financial processes, spend management software enables organizations to make more informed, strategic decisions, ultimately leading to significant cost reductions and improved financial efficiency.

4. Compliance, risk mitigation, and spend control

Ensure policy adherence and mitigate risk with automated approvals and pre-configured workflows. Spend management software helps enforce compliance with company policies by automating approval processes and thresholds and embedding compliance checks and escalations into workflows. 

This reduces the risk of non-compliance and ensures that all spending activities are properly authorized and approved against real-time budgets. 

5. Accountability and auditability

Spend management solutions enhance accountability and auditability by providing a transparent, traceable digital record of all financial transactions. Real-time tracking and comprehensive reporting enable businesses to monitor spending patterns, identify discrepancies, and enforce compliance with budgets and policies. This level of visibility and control not only supports internal accountability but also streamlines external audits.

6. Seamless integration

Integrate seamlessly with your existing accounting system or ERP (e.g., QuickBooks, Microsoft Dynamics Business Central, Sage etc.) for effortless data exchange. Spend management software is designed to work in harmony with your current financial systems, ensuring smooth data transfer and consistency across platforms. 

This integration eliminates the need for duplicate data entry, reduces the risk of errors, and ensures that all financial data is synchronized and up to date.

7. Scalability and mobility

Mobile access and scalability are key benefits of cloud spend management software solutions. With mobile access, employees can submit and approve expenses, capture receipts, and manage purchase orders on-the-go, ensuring real-time financial management and reducing delays. 

Scalability allows the software to grow with your business, accommodating increasing transaction volumes and expanding operations without compromising performance or efficiency. This flexibility ensures that as your business evolves, your spend management processes remain robust and effective.

Additional features and benefits to look for in spend management software

Messaging app integration

Improve communication and collaboration via messaging app (e.g. Microsoft Teams or Slack) integrations, ensuring that relevant stakeholders are always in the loop. The familiarity of these apps drives rapid adoption for key day-to-day processes such as requisitioning and approvals.

PunchOut, PunchIn and internal catalog capabilities

Streamline purchasing by integrating with vendor catalogs directly from within the software, making it easy to compare products and prices, and place orders seamlessly, while complying with pre-configured purchasing and approval rules.

The ability to host internal catalogs provides additional opportunities to streamline processes, manage spending, and realize savings from pre-negotiated product and vendor agreements.

AI-powered AP automation

The latest AP automation tools are powered by artificial intelligence (AI), the next wave of technology succeeding optical character recognition (OCR) technology. Source solutions that automate accounts payable processes using AI to increase efficiency and accuracy. From invoice intake, AI-powered line-item data extraction to easy invoice matching, and invoice approval, AP automation reduces manual effort and accelerates payment cycles.

Spend analytics and reporting tools

Utilize advanced spend analytics to gain deeper insights into your financial data with easy visualization via dashboards. 

These embedded tools automate the analysis of large volumes of spending data, reducing the time and effort required for manual data compilation and analysis. Identify trends, benchmark performance, and make data-driven decisions to optimize and reduce spending.

Why every business needs spend management software

For companies of all sizes, the risks associated with inefficiencies, manual errors, and lack of visibility into spending are substantial. These challenges often catalyze the need for spend management software, as businesses face mounting pressure to maintain financial accuracy and control.

Without proper spend management, organizations are vulnerable to fraudulent activities, which can result in significant financial losses and even reputational damage. Manual processes and inadequate monitoring create opportunities for unauthorized spending and errors, undermining financial stability. 

Implementing spend management software is key to mitigating these risks, providing automated workflows, real-time analytics, and robust compliance checks that ensure every expense is authorized, traceable, and within policy. This technology not only safeguards against financial mismanagement but also enhances operational efficiency and strategic decision-making, making it an essential tool for any forward-thinking business.

Take control and reduce costs with Fraxion’s spend management software

Explore the transformative benefits of Fraxion’s spend management software and see how it can propel your business towards greater efficiency, cost reductions, and a culture of accountable spending. Whether you need easier, more efficient purchasing, expense, and AP processes, or require more spend visibility and control, Fraxion has the solution for you.

Spend management software features

Fraxion’s key features: 

  • Purchase requisitions
  • Advanced approvals
  • Purchase order automation
  • AI-powered AP automation
  • Expense management
  • Catalogs
  • Spend analytics, reporting and community insights
  • Mobile app
  • Budget and policy control
  • Flexible integration options with ERP/ accounting systems, Microsoft Teams, Amazon Business PunchIn and over 50 PunchOut vendor catalog integrations. 

Ready to take the next step? Schedule a free demo - get in touch to share your requirements with a product specialist, if we’re a good fit, we’ll provide a demo customized to your needs.

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