Securing APpropriate Spend Under Management
SPEND UNDER MANAGEMENT
The general trend in modern corporate finance is towards source-to-pay software, streamlined series of processes that allow total visibility over previously opaque expenditures. This decisive paradigm shift, providing visibility and control to executive stakeholders, is unparalleled in its ability to streamline and facilitate budgeting, control and enforce compliance, and ensure that all spending is appropriate for the business in question.
In order to manifest the benefits of source-to-pay software, executives must first understand the preparation and implementation of such system, the specifics of its functionality, and the ultimate effects it will bear upon their own organizations financial health.
STEP 1: Ushering in the Necessary Changes
Before source-to-pay system can be implemented, the internal policies of the organization must be examined and scrutinized in order to determine the most appropriate settings for the system. This initial process will be driven by the strategic operations of the company, and coupled with the execution of the source-to-pay software.
To begin, the involved executive will first consult with the Chief Financial Officer to review the fundamental costs and objectives associated with budgeting and spend management. This consultation will help develop strategy aligned with behind-the-scenes costs and outside spending compliance.
From there, groups involved in spend management must be identified and requirements regarding spend approval must be properly communicated. Methods of approval will likely vary between departments and categories of spend, meaning that individual specifications must be outlined with great precision.
STEP 2: Establishing the System
Once the strategy is set, the executive must transition to the implementation of the source-to-pay system. The first step in this process involves suppliers and requisitions, as the systems must be ready for connections with them. Any misconfigured entries will slow down the approval process, so careful attention must be given to each entry.
Afterwards, payment methods must be set up, as this link is integral to the source-to-pay platform. The executive must guarantee the accuracy of payment terms to ensure that the most efficient methods applicable to each source are utilized. Additionally, strategy must be put in place detailing the levels of approval from multiple stakeholders that will be necessary to effectuate payment.
STEP 3: Refining the Process
The successful implementation of source-to-pay system does not solely rely upon the initial configuration of the system, for the effectiveness of the system maintenance is integral to its long-term applicability.
The executive must remain vigilant in the updating the system with new requisitions, payment methods, and supplier profiles. Additionally, contracts that the supplier?s abide by must be continually monitored to ensure compliance, as well as the addition of any new terms which may present new obligations.
Finally, ongoing feedback from stakeholders must be continually welcomed to ensure the accuracy of the information contained in the source-to-pay system.
STEP 4: Taking Full Advantage of Source-to-Pay Software
Once the source-to-pay system is fully incorporatd in to the financial operatioens of the organization, the executive will have fully realized the utility of this platform and the additional ramifications of source-to-pay system.
The executive can monitor their organizations spending in real-time, accurately assessing the financial resources and their individual budgeting each month. This granular approach will provide the most natural path to long-term forecasting, as any disruptions or irregularities will be immediately obvious in the data.
Furthermore, the accurate automation of the payment cycle can provide substantial boost to working capital. As the system carries out necessary payments, it also streamlines the process by sending out vendor invoices and helping with payment reconciliations.
In similar vein, visibility of the purchase to payment cycle will be desirable for internal auditing, enabling any reporting requirements to be satisfied with greater ease.
Overall, by operating source-to-pay system, executives can ensure that their organization has robust financial security and attain economies of scale without interrupting critical business processes.
Conclusion
The advantages of source-to-pay software to corporate finance are myriad, manifesting themselves in terms of budget control, payment automation, and strategic operations. With the correct implementation and utilization of such system, executive stakeholders can guarantee efficiency in their financial operations, along with the additional benefits of visibility, consistency, and precise control over their corporate spending.
