Spend management has evolved exponentially, and in just a few years, technology has taken it further than ever before. Rather than a responsive and reactive approach, companies are now able to take a proactive approach with the help of financial technology. Gone are the days of simply responding to requests for obscure and difficult-to-find paperwork. Searching amongst paper copies of purchase order slips, receipts, and paper invoices, while hoping to organize everything with manual and archaic methods has become a thing of the past. Now, a request for paperwork can be easily handled using procure-to-pay software and completed by performing a digital search for any transaction. Data can be easily accessed from a sleek, cloud-based system anywhere in the world. Let’s take a closer look at the history of spend management to see how far we’ve come.
Businesses of all sizes had to manage the company budget, in some way, before the advent of software. Spend management in the 20th century was filled with many practices which today are considered outdated and redundant. Additionally, a comprehensive way to view internal spend as a whole didn’t fully exist, and as a result, there were no solutions concerning things like indirect spend. Businesses that wanted to perform any type of spend analysis had to manually compile data and look over each payment from every vendor over a period of time. Once all of this data was sifted through, then there was the possibility of seeing a pattern in the data to aid in the decision-making process.
This type of spend analysis was time-consuming, to say the least, filled with inefficiencies, and left a large margin for error. As a result, there arose a need for assistance in this specific area which became a subspecialty. Soon companies cropped up that were solely dedicated to cleansing data, categorizing spend, and then analyzing the results. Several companies that offered this type of standalone spend management service began to automate areas of the process to improve efficiency. However, the process still lacked the ability to direct employees to the needed suppliers when they needed them. This caused disparate ordering and uncontrolled spending with no way to directly control and track supplier relationships.
Moving out of the 20th century and into the 21st has seen spend management evolve into a more robust and agile sector. Instead of reacting to the need for data and organization, spend management has become more strategic. With the introduction of the internet, technology has seen spend management blossom from infancy to adulthood with singular dexterity.
The advent of the internet has witnessed a complete transformation and evolution of spend analysis. Technology has created new subsets of spend, which encompass data collection, data analysis, virtual cards, approval workflows, supplier management, and more. Instead of a disjointed and disparate data collection system, spend management has had the chance to evolve into an all-encompassing vehicle for complete cohesion across all aspects of procurement, accounts payable, and expense management.
With spend management being transformed into a one-stop solution, there arose the creation of total spend management platforms. These complete start-to-finish solutions provided companies with access to full control over every aspect of company spend. Using one platform, VPs of finance could now access every facet of spend using cloud-based software as a service (SaaS) solutions.
Modern spend management platforms offer agility and dexterity that standalone spend management solutions of the 20th century simply can’t compete with. These platforms can set rules and limits around spend, dictate who can approve orders from certain suppliers, and manage every other aspect of company spend.
Covid-19 saw significant changes in how companies did business, with many turning to remote teams. This has made digital spend management more relevant than ever for companies seeking to stay current in today’s climate. With spend management platforms offering access to features critical to remote teams, it became a simple choice to rely on software to manage spend instead of doing everything manually.
Thriving during tenuous times has put a spotlight on controlling costs and spending even more critically than in the past. This has made managing corporate spend one of the most vital components of maintaining operational efficiency and, even for many companies, operational survival. By implementing a sound spend management strategy, utilizing spend management tools, and developing a conscientious culture concerning company spend, businesses could thrive during challenging times.
Spend management has matured into an exceptionally versatile sector that ensures a company’s financial solvency. With technology continuing to offer more advanced options in spend management and SaaS, it has become easier for businesses to proactively manage every aspect of company spend.
Today’s versatile spend management financial technology platforms connect the dots between the components that affect a company’s internal spend. From expense management to procurement and accounts payable, all facets are interlaced into one cohesive unit. Modern-day SaaS options offer real-time visibility and transparency that no other spend management solution has previously been capable of.
This brings us to the future of spend management, which will continue to pivot businesses further into the driver’s seat. Companies like PayEm will continue to be able to more proactively control internal spend through a dynamic, user-friendly, collaborative platform. PayEm is proud to be a part of the leading edge, transformative digital solution in the spend management category. VPs of finance turn to our fully featured, end-to-end platform for the ultimate in connected finance solutions. Contact PayEm’s experts for a commitment-free, no-cost demo of the platform.