Why top finance professionals recognise the value of data about money leaving the business
February 12th 2021 | Posted by phil scott
Data about money that is leaving a business is often neglected. This can have a seriously detrimental effect on the activities and finances of the business and the failure to secure this stream of information can hold a business back from achieving success.
Even though this is the case, many businesses concentrate on the money coming in rather than the money going out.
Top finance directors and other professionals understand the value of accurate knowledge concerning the expenditure. They recognise the restrictions that legacy accounting systems can have on acquiring data and understand how to embrace new technology in order to remove these restrictions.
The problems that numerous systems in a business can bring
As a business grows and expands so its internal systems may become disjointed and unwieldy. In the case of spend management, this often happens as departments are added and staff are recruited. Different systems are employed to manage spending in these areas and these systems often become siloed. They all have different operating methods and may also have inefficiencies associated with them.
The most effective finance professionals understand the restrictions of maintaining these disjointed systems. This includes having to collect data from many different places which in turn increases the chance of human error resulting in incorrect data.
Why data on spending is so vital
There are several reasons why using outdated and siloed systems has a detrimental effect. Experiences finance directors know that having accurate spending data is essential to a business as it prevents potential double payments for services, ensures that prices paid for goods are competitive, and reduces the opportunity for fraud to take place.
So, every single purchase made by an individual within a business needs to be accurately recorded and measured. This is an essential part of budgeting for any business. It’s difficult to ensure this data is accurate when using outdated and disjointed systems. This is where modern spend management technology comes in.
The advantages of spend management technology
Traditionally, many businesses, especially smaller businesses, have neglected spend management due to the cost involved. It was often necessary for businesses to work with consultants to obtain the accurate overarching data that they needed. The expense of doing this meant led to the situation outlined at the start of this article. Instead of spending the additional money, businesses stuck with the systems they had and ran the risk of not having full control of their spending. They also left themselves open to fraudulent activity.
Modern finance experts know that there is now a cost-effective alternative to this approach. Businesses can make use of intelligent spend management solutions that can be tailored to their needs. Using these solutions means that they have access to the accurate and current spending data they need to make informed financial decisions. It also means that internal finance teams no longer have to spend time digging into different siloes to compile spending reports. Their time can now be invested in helping businesses to make the most effective financial decisions for growth and success.