ARTICLE — The good news for most businesses – they still control most of their spending.
The bad news – 25 percent of their spending is outside their control, according to the results of a poll conducted during a town hall meeting held by the Institute of Finance and Management (IOFM).
In tough economic times, this is a shocking amount of spend that businesses cannot see.
Sixty percent of businesses polled say their travel and entertainment expenses are not well-managed.
No surprise there.
But spending on services (cited by 44 percent of poll respondents), indirect materials (35 percent), and indirect labor (19 percent) also were identified as sources of poorly controlled spending.
One-quarter of businesses report that the pandemic has made it harder to manage their spending.
Uncontrolled spending, as the name suggests, is a really bad thing. Uncontrolled spending does not undergo the same level of scrutiny as planned purchases. Uncontrolled spending also is potentially wasteful. In many cases, a business could get a better deal on goods and services through centralized purchasing. And it often results in budget overruns that can undermine financial plans and forecasts.
None of this is good for the health of a business.
Increasingly, businesses are looking to better manage spending and control budgets. Revenues are down. Profits are declining. Cashflows have been disrupted. Businesses want to reduce costs fast. They want to scrutinize purchases to ensure that they are in alignment with economic reality.
With the stakes high, it makes sense for businesses to automate budget control.
Automated budgetary control solutions for NetSuite help businesses control their budgets better.
- Budget availability is checked and enforced at the point of requisition
- Budget-versus-actual reports are automatically reconciled against procurement data
- Approval workflows can be configured for requested out-of-budget purchases
- Spend can be managed on a per-location basis
- Complex business process such as CapEx and OpEx budgeting cycles are streamlined
- The budget ledger is updated every time a transaction is modified
All this provides decision-makers with real-time insights into all spending, not most of it.
With an automated budgetary control solution, business leaders can be confident that spending is tightly controlled. Out-of-budget purchases can be stopped in its tracks. And the real-time insights provided by the technology enables business leaders to quickly adjust as market conditions change.
This is what business leaders have always wanted.
Year after year most businesses are under tight budget constraints. Now the pressure is high for businesses to manage spending more tightly. Businesses should start by automating budget control.
PyanGo can help.
Our budgetary control solution for NetSuite extends both standard and advanced procurement to provide the granular budget information businesses need to manage spending and control budgets.
See for yourself how PyanGo can help your organization get control of all its spending. Contact PyanGo at … to arrange a no-obligation online demonstration with one of our automation experts.
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