Business spending is one of the most important areas of finance, and one that can easily get out of control. This means having effective tracking schemes in place is crucial - but are you recording the right elements?
Success can look different to each company, based on what your specific goals are and the KPIs you have in place to track your progress. Whether you choose to bring all of these together within a Business Spend Management (BSM) platform or not, it's important that you have reliable data about the company's expenditure.
Here are four ways you can track business spending:
By having a cloud-based platform to manage your expenses, you can get a much clearer idea of how much expenses are costing the company. You'll want to ensure it's user-friendly as a system like this only works if all employees are engaging with it and using it as the primary way of filing expense claims. You'll also be able to decline late submissions that fall outside your company guidelines without any awkwardness.
Once this is in place, you can set up KPIs to track the different elements of expenses or how much is spent by individual teams. This will help you understand whether there is any improper use and ensure everyone is adhering to the same policy rules.
2. Cost of Customer Acquisition
It's important that you're not spending more on acquiring customers than the value of them as a client. Tracking the amount you spend on preparing sales professionals and even travel to secure new business can tell you whether you are getting worthwhile clients or whether you need to change your acquisition strategy.
You may also want to factor in the ROI of any marketing efforts you do as a company as this all adds up to the total cost of securing new clients.
3. Structure purchases
Implementing a guided buying system can help professionals make the best choices when it comes to purchasing from suppliers. By having a list of recommended companies that are proven to deliver good ROI, you can ensure a high level of value from each and every contract throughout the business. It also helps to encourage consistency for your clients regardless of who they are in contact with. KPIs can be used to determine how much time is saved by introducing a structured purchasing system.
4. Operational Performance
Wages are one of the biggest areas of spend that a company has so it's important that you track employee performance and productivity. There are a number of KPIs you can put in place to get a clearer picture of how employees are adding value to the company, where they may need more support, and any areas where significant change is warranted.
Regardless of the industry your business operates in, getting as much value as possible from your workforce is essential.