Businesses are looking to cut costs in smart and impactful ways that remove unnecessary waste and improve their overall financial picture. Unfortunately, business leaders can’t effectively reduce spend unless they know what they are buying in the first place.
According to the 2023 Trends in B2B Purchasing study, 47% of finance and accounting professionals in the U.S. are looking to reduce operating expenses by more than 20% in the next year. However, half of these respondents say that stakeholders in their company – such as the executive team or stakeholders in finance, legal, IT and security departments – lack sufficient visibility into the company’s purchasing and approval process. This critical visibility gap is making cost-savings initiatives incredibly complex to execute.
Lack of visibility into business purchases means leaders have less control over their operating expenses. What’s more, poor communication and a lack of clear processes can leave ample room for error and cutting corners. This can lead to an environment where rogue spending and non-PO backed spend are the norm, posing security risks and compliance issues for the entire organization.
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The survey found that only 10.9% of respondents believe 81%-100% of the spend in their organization is under management, or PO-backed. When employees are confused and unsure of processes, they may be inclined to skip over necessary steps to get their purchases approved more quickly.
Companies with accurate visibility and control over the procurement process are better positioned to reduce OpEx and weather whatever economic climate lies ahead. By embracing automation and moving purchasing processes away from legacy tools and workflows, businesses can improve efficiency and unlock new levels of spend visibility and control.
B2B purchasing processes have remained largely unchanged for nearly a decade. Yet, this business function will be a critical driver to unlocking never-before-seen cost savings and control. Businesses need automated solutions that can orchestrate the end-to-end B2B purchasing process across the procurement tech stack, or risk compliance and legal issues down the road.
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Finance and accounting professionals are aware that this change will be beneficial to their companies. The vast majority (87%) of respondents said it would be beneficial if they could use an all-in-one software solution to manage the procurement process for B2B software and services from the initial purchase request through payment to third-party vendors. If procurement and purchasing processes were improved, many respondents believe they could achieve key business objectives, including increasing operational efficiency (42.7%), improving finance team productivity (37.5%) and improving employee productivity (38.7%).
The bottom line is that you can’t control the spend you can’t see. The more visibility and control businesses are able to gain, the higher cost saving they will see. Automating processes will allow for more intuitiveness to analyze how much your company is spending and on what. The purchasing process should be clear to not only employees but to stakeholders and all executives involved.
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