Naturally, outdated/static spend management and expense management processes can have a severe impact on your company’s ability to grow. So it is best to watch out for these typical obstacles:

1. Lack of visibility in expenditures

Financial professionals need optimal visibility into a company’s day-to-day spending, that is a matter of fact. Employee expenses here, supplier costs there, with travel expenses and the need of office supplies on top — all that can sum up quickly and generate a lot of spend data that needs proper management. Otherwise, it can lead to maverick spending, duplicate payments, or other costly errors like internal or external expense fraud. If you prefer relying on error-prone paper methods or spreadsheets to record each step of your procurement-to-payment process, you need a detailed (and also time-consuming) way to examine this data.

2. Inefficient data access 

Every business needs to acknowledge: A spend management solution based on traditional paperwork leads to inefficient data capture. Therefore, we recommend that an AP department should at least be able to review past procurement data easily to oversee current spending, and forecast future growth. This approach helps with making informed financial decisions. 

However, manual processes make it difficult to access data, a threat that becomes more and more imminent with the growth of a business. When crucial analytics such as key performance indicators must be tracked and calculated manually, you have to sacrifice more resources than necessary concerning today’s technological options.

3. Optimisable manual processes 

If your company heavily relies on paper handling, you will probably know this already: You have to enter data multiple times to add them to separate financial systems at different stages of the procurement and payment processes.

That is cumbersome work and also poses a high risk of human errors and bottlenecks as payments often must be individually verified and authorised by inefficient routing to the respective administrators. 

4. Complex compliance processes 

Audits do not have to be but easily become a huge pain point when AP professionals are faced with rows of filing cabinets filled with paperwork. Even the best-structured files make verifying procurements a painstaking process since the accounts payable team must meticulously match requisition requests to receipts of invoices and goods. 

5. Insufficient supplier management 

Your competition is probably already taking positive action to address their respective issues, as many businesses have found it necessary to rethink how they spend their money — especially since the AI boom. Not maintaining a robust supplier management software solution might affect your future business as others already might be a step ahead of you. A software that holds centralised vendor information allows you to gather all the latest contact information and contract data.

6. Struggling to stay within the budget 

Businesses holding on to outdated spending management probably end up with inefficient budgetary processes. Why? Companies with traditional management tools are likely to decide budgets based on guessing. Even the previous year’s cycle can be less sufficient than real-time data. Fresh data insights from your automated expense management system could deliver more precise results and could, therefore, lead to better budgeting of business expenses.