KPIs to Create Margin Impact

This report shows how select multi-location companies use Coupa’s #1 AI Total Spend Management platform as a margin multiplier. Discover KPIs and community-powered benchmarks along with best practices that have an exponential impact on growth, productivity, and efficiency.

2024 Benchmark report cover

Access exclusive data and insights to free up capital for growth

Structural cost pressures. Tighter financial conditions. Cost volatility. Supply chain disruption. Today’s economy is fundamentally different. And in this new era, the ways that most companies are continuing to do business aren’t designed to build margin-multiplying capabilities that drive profitable growth. The companies that can’t adapt are the ones that close their doors forever.

To guide business transformation, CFOs and finance and procurement leaders can look to best-in-class performance in total spend management. How are top performers using AI, data, and advanced technology to improve margins and make smarter decisions? This report features community-powered benchmarks across 14 KPIs to help leaders answer questions like:

  • To what extent is my business capable of stopping margin erosion?
  • How can I transform our company’s spend management to gain a margin multiplier? Where will I need to invest?

What makes Coupa benchmarks unique?

6.0% overall savings

What it means

Traditional spend management approaches typically yield 2% to 3% in savings relative to overall spend. Top performers this year saved far more by applying total spend management best practices.

Why it matters
  • Total spend management is emerging as a reliable, sustainable, and comprehensive approach to ensuring profitable growth. Sales forecasts may stay unpredictable, so CFOs and finance leaders are paying closer attention to what they can control – spending practices across their organizations.
  • An investment in a total spend management platform gives CFOs and finance leaders the visibility they need to understand how resources are being used across the company.
  • Increased visibility across all spend types, from cost of goods sold (COGS) to operating expenses, helps leaders fund their company’s growth through ongoing and disciplined spend control.
How to improve

96.0% pre-approved spend

What it means

The total amount of invoiced spend linked with approved POs.

Why it matters
  • Finance teams can inspect each transaction before the spend is committed and control costs in real time to meet targets and increase working capital.
  • AP generates accurate accruals without follow-up when teams have greater and earlier visibility into spend that’s committed but not invoiced.
  • It helps lower operating expenses since it’s more likely to go onto negotiated contracts, resulting in lower prices and better terms.
  • Virtual cards help streamline pre-approved spend. Teams can increase liquidity by driving card rebates and optimizing the card’s payment cycle.
  • Fraud prevention is more robust when more invoices are matched against POs automatically.
How to improve

74.3% On-contract spend

What it means

The percentage of spend put through pre-negotiated contracts to enable better prices and terms.

Why it matters
  • Finance teams have more options to lower operating expenses. Procurement’s role is critical: negotiate lower pricing in the future with contracted
    suppliers by channeling more spend through each
    contract.
  • AP teams can improve cash flow when higher amounts of spend are covered by favorable payment terms in each contract.
  • Higher on-contract spend reduces financial risk because it prioritizes relationships with suppliers who have risk-related contract protections in place.
How to improve