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Smart Spending is Easier than You May Think

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Ben Franklin said, “A penny saved is a penny earned.” Most of us have heard this phrase many times, but when it comes to running a business, the emphasis is often focused on growth and revenue more than on managing company spending. As companies experience high growth they can start to experience challenges, especially with keeping tabs on spending.

By setting up automated systems to help organizations manage spending, many of these concerns, as well as employee frustration, can be alleviated. Let’s take a look at how smart spending might work in the company purchasing process.

For a business to gain control over its spending, the first step is to know exactly where every penny is going and then find areas for saving. The true benefit of using an automated purchasing software system is that it gives you, the business owner, a refined and proven process to spend money more wisely.

Smart spending means that before a purchase is made, you have already set up your automated system with the right vendors, products, approval workflows and more. Then as requisitions are created, you know that employees are selecting items from the right vendors and that you are receiving the negotiated prices for those items. Approval workflows are preset and can be as simple or as sophisticated as you need. For example, you can trigger approvals for items over a certain budget, or for specific categories, or simply set up a workflow by named individuals.

Once the system is set up, the purchasing process flows smoothly through your organization. Individuals create requisitions by “shopping” for goods or services using the online catalogs or punching out to e-commerce vendors. You can choose to use an “order pad,” which is a saved requisition that your organization may use regularly, such as a new hire package, or for a tradeshow. Items are selected and added to the requisition similar to how one fills a shopping cart. Once everything is on the requisition and any supporting documentation attached, you can either save it for use later, or route it for approval.

If your company gets in the habit of creating requisitions as soon as you know you may need to order something, you’ll have a record of planned spending in your system. This gives you a clear picture of spending that is in the pipeline, but not yet approved or paid.

Approvers are given a robust set of tools to make informed approval decisions. Information can be viewed, sorted and aligned to what you need to see in the way that is easiest for you to consume. A handy Quick Approve option lets you quickly approve a series of items that you know are okay, or you can drill into any transaction to review line item details, supporting documentation, and any comments.

Approved requisitions are easily turned into purchase orders that can be consolidated and sent to vendors. As goods and services are received, a packing list option lets you track what is received against what was ordered. You can set up thresholds that may require re-approvals if more goods were received than ordered.

Finally, as vendors send in invoices, everything can be matched to ensure what was ordered was received, avoiding duplicate or over payments. Invoices can be routed for approvals as well, to ensure the right people are approving transactions before payments are made.

The online purchasing system gives finance and other executives real-time visibility into spending. Should revenue growth not be keeping pace with plans, spending can easily be stopped before cash goes out the door. At the same time, if sales are exceeding expectations, then even more money can be allocated to continue company growth.

“One of the main factors contributing to the new processes and procedures was the need for greater visibility into spending and access to necessary information in a timely manner. With ExpenseWatch, financial processes have been improved through appropriately structured processes for purchasing goods and services, enhanced budget oversight and management, and increased visibility through control and reporting.” -Detroit Institute of Arts

Automated purchasing software will help you and your employees save time and money because it enables management to see how the company’s money is being spent. It also enforces spending policies, let employees easily purchase items, get approvals, and enables accounting to oversee payments to vendors. ExpenseWatch Purchasing and Payable Invoices module will encourage you and your employees to manage company purchasing and payable invoices confidently. In the long run, this can help you best manage money to support company growth.

For a more in depth conversation about how ExpenseWatch Purchasing and Payable Invoices modules can benefit your organization, simply fill out the form on the right and we will contact you soon.

(Posted 6-30-15)

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