How Business Spend Management Can Help Accelerate Financial Transformation

Most companies are battling to navigate today’s economic headwinds. Inflation is one of the biggest current challenges, yet simply raising prices is not an option for most organizations. If the cost of operating isn’t impacting margins, then deteriorating cost, cash, and capital structures tend to be the risks most commonly associated with skilled labor and years of accumulated technical debt. To face this commercial context, CFOs must take a broader, long-term view and find effective ways of accelerating financial transformation to become more efficient across key processes and drive faster business value.

Intelligent digital innovation is essential to finding rapid and effective ways to automate transaction processing, enhance ecosystem collaboration, and enable strategic, actionable insights that maintain cash flow, improve margins, increase profitability, and reduce risk in challenging times.

One area that checks all these boxes is managing business spend across the organization. Better spend management enables enterprises to source more frequently, increase competitive procuring and bidding, and — through increased visibility — govern non-compliant transactions. Paying greater attention to what is spent, how, when, and by whom, is transformational. Imagine, for example, if your company could save 6.6% of every dollar it spends with suppliers? Or the impact of automating 70% of all your source-to-pay transactions? Or finding more strategic levers to bring not just savings, but yield to spend?

According to The 2023 Business Spend Management (BSM) Benchmark Report from Coupa, based on data compiled from its community of more than 3,000 customers and 9.5 million suppliers, companies are doing just that by applying the latest spend management capabilities and technology.

To achieve these results, full visibility and control, coupled with higher user and supplier adoption of every aspect of corporate spend, is essential. Enabling procurement and supply chain teams to collaborate more effectively with their finance colleagues gives them the control they need to turn potential savings into budget certainty and drive the business forward with confidence.

Let’s take a look at some of the ways that investing in an effective Business Spend Management platform can help CFOs drive financial transformation.

Start by transforming the engagement model

As the old saying goes, you can’t manage what you can’t measure. Leveraging best-of-breed procurement technology built on an AI platform with integrated data allows more users across business functions to gain real-time insights into spend and opportunity. Yet in this day and age, it’s alarming that some companies still don’t have an accurate picture of their business spend — particularly discretionary expenditure. Nor do they have the necessary controls in place to make informed decisions when selecting the right suppliers, ensuring contractual and regulatory compliance, meeting their ESG commitments, and mitigating risk. Both users and suppliers that operate in a single platform become critical inputs to a successful financial transformation. Coupa has defined minimum standards of 100% of enterprise users and 98% of suppliers active and collaborating within its platforms.

Bringing all direct and indirect spend together on a single platform addresses all these issues by consolidating all relevant data and providing a single version of the truth from source to pay. As well as the obvious savings opportunities, this transparency increases budget certainty and user-to-supplier collaboration, improves financial forecasting accuracy, and identifies cost vs. cash trade-offs. It also helps build better and more open relationships with suppliers, enables continuous monitoring of contract compliance and ESG conformance, and drives better risk management.

Effective controls are equally important; they are the rails that keep the financial train moving in the right direction. By integrating your FP&A planning process with on-the-ground spend decisions with BSM, for example, you can allocate your resources more effectively and be more agile with your strategic investment decisions. Improving the quality of spend data — even across ERP systems — also helps finance and business teams make better decisions faster, based on accurate information. Improved control gives companies more levers to optimize working capital using early payment discount terms (EPD), stretching days payable outstanding (DPO) and having real-time project-level transactional detail to ensure capital efficiency.

Controls are often automated and embedded into processes, making them transparent to employees and easy to use, and helping rather than hindering both process and outcome. Other areas where automation is particularly effective with BSM include invoicing and payment reconciliation. In fact, up to 90% automation of basic repetitive tasks is achievable within the first year — improving the employee experience, boosting productivity, and enabling both the procurement and finance teams to focus on higher value activities that move the business forward. This can also lead to the development of a strategic finance “front-office.”

Make your supply chain run more efficiently

Supply chain management remains very challenging. Demand is still unpredictable, which makes supply chain planning hard as logistics difficulties and materials shortages persist. Yet similar improvements in efficiency and control are possible across the supply chain with the right digital tools.

BSM can help companies navigate this by modeling the trade-off between cost and risk in supply chain design. Using a digital twin of the supply chain landscape, for example, can improve resilience, optimize logistics, and improve inventory management. Enabling better collaboration between supply chain and procurement ensures that orders are filled, and any changes are quickly implemented. Coupa’s Supplier Portal adds another level to this collaboration by connecting purchasing organizations with a growing global community of suppliers on one platform.

Again, automation is the key driver of efficiency improvements across the supply chain. A high level of automation — notably in purchase order and invoice processing — takes cost out of supply chain processes, helps build transparency and trust with suppliers, and provides opportunities to improve working capital and cash flow, such as through flexible and individualized early payment terms.

Accelerate your digital transformation with Coupa and Accenture

The disruption of the last couple of years has shown that incremental change is no longer enough, and the need for radical digital transformation is now a given. Clients want a fast and effective way of harnessing the right technology to deliver speed to value, cost savings, and greater efficiency across the entire organization.

By viewing each transformation through an industry lens, we’re able to provide a 95% solution fit to rapidly infuse proven industry best practices and deliver fast results. We call this “compressed transformation,” a strategy that looks across the entire enterprise’s operations, chooses a single, connected approach to transformation, reimagines the business end-to-end, and harnesses the right technology platforms to deliver best practices at speed. Given the magnitude and complexity of imminent ERP decisions, compressed transformation is the best route to achieving an agile model. The procurement-driven financial transformation requires ERP to be more consumable and rationalized so that technology and process space is provided for digital and value-centric outcomes.

Interoperability between platforms is essential, and as a Coupa Global Elite Partner we use its cloud-based, AI-powered Business Spend Management platform to bring procurement, supply chain, and finance teams together to transform how direct and indirect costs are managed. A truly multi-tenant SaaS solution, it provides a stable, simple to use no-code platform with high user adoption that drives rapid value and can help clients reduce operating costs by 20–50%.

So, investing in an effective BSM platform can give CFOs the opportunity and visibility to understand how resources are being used across the company, and apply precision tools — not blunt instruments — to contain costs and improve cash flow, margins, and profits to drive the business forward in challenging times.