Putting a spotlight on your spending: Why visibility matters

There is a single word that can often define what separates successful organisations from those with less success. It's not "profits," "marketing," or "products." 

It's "visibility."

When we say visibility, we don't mean an overriding corporate vision, but rather the ability to peer deeply into the dynamics of your business. A company with deep visibility into how, where and why money is being spent is a company that has a massive advantage in controlling costs. 

Yet cost control makes up only a small part of visibility. At its broadest, it provides a window into virtually all of the activity within an organisation. Visibility is a prerequisite for making the key strategic decisions that can make or break a company. 

With that in mind, let's take a closer look at why visibility matters and strategies for incorporating it into your business. 

The basis of financial understanding and control 

Spend visibility (insight into all expenditures in all departments) is the foundation of good financial management. With it, you can identify opportunities to reduce costs, optimise budgets, and make strategic decisions about how to deploy limited resources. In the absence of this kind of visibility, an organisation may struggle with low-return or redundant spending, and make poor decisions about how to allocate assets. This lost money could otherwise be used to help fuel company growth, compensate workers, and more. 

Staying on top of spending and budgets isn't the only benefit of deep visibility. Today's regulatory environments have never been more complex or challenging. If the right stakeholders have broad visibility into cross-functional spend, they can oversee transactions, identify potential problems before they exist, and eliminate the blind spots that lead to policy violations, audit red flags and, in the worst-case scenario, financial penalties, sanctions, or reputational damage. 

Finally, deep spend visibility is essential to data-driven decision-making. Without it, teams are forced to rely on incomplete information. If you can see historical spending patterns and identify new ones in real time, you can glean extremely actionable insights. Those insights can inform everything from budget setting, resource deployment, supplier negotiations, and even long-term strategic objectives. 

Ultimately, think of a map. When it's clear and legible, a map shows you the optimal path to your destination. If your map is torn or partially obscured, you then have to rely more on intuition or educated guesses to find your way there. Sure, you might have a compass (in this metaphor, a general direction), but that doesn’t always provide the most efficient route for your desired end result.  

And in business, educated guesses and inefficient processes are far from ideal. 

What are the most pressing visibility challenges? 

Now that we've discussed the core benefits, let's talk about some of the roadblocks that are preventing deep spend visibility. First, organisations often deal with lots of fragmented data generated by systems that don't always play well together (or at all). One company may have separate solutions for expense management, accounting, procurement and other departments. When data proliferates and fragments, it becomes almost impossible to get a unified view.  

In such cases, it may be exceedingly difficult to track something like spending. You may end up tracking expenses in multiple systems, and reconciling everything requires a lot of tedious manual work. It also introduces the possibility of errors and bottlenecks. Overall, it's a highly inefficient process that has severe downsides. 

Assuming an organisation manages to aggregate data from a multitude of disparate systems, the problem doesn't end there. Categorisation and coding are another roadblock. Classification processes may vary from department to department. Travel to an industry conference may be classified as a sales or marketing expense in one department, and workforce development in another. This situation, which commonly occurs, creates problems when it's time to make spending comparisons across those departments or seek to develop an organisation-wide picture of spending. Making an attempt to create standardised codes and categories is a big step toward mitigating these issues. 

The standard way of handling expense reports may also create delays related to visibility. Think about the lag time between when the expense happens and when the finance team sees the transaction. This lag time creates an ongoing blind spot that makes it difficult to get a handle on current spending, which in turn makes it difficult to analyse spending patterns. If you have a team that relies a lot on hybrid or remote work, the expense process can be even more delayed and fragmented, especially if your process is mostly paper-based. 

Enforcing travel and expense policies across departments is also a serious challenge in the absence of visibility. When so much occurs out-of-sight, it raises the possibility of unauthorised spending or even fraud going undetected. Also, after-the-fact expense reporting limits your ability to recoup lost funds, as that money may already be gone by the time the problem becomes visible. 

How to achieve deep spend visibility 

There is a straightforward roadmap for getting a comprehensive, real-time view of spending and other important business activities, such as travel. It begins by creating the right framework. Make sure clear expense categories are defined. If you can create category-level visibility, you can benchmark against industry standards and trends over time. As mentioned earlier, standardisation is key here. That's one reason why an automated travel and expense management tool can pay dividends.

Analysing spending by department can also help you make informed budget and allocation decisions. You can pinpoint which departments may need extra attention and take early steps to help them get on track. Visibility also helps with budget planning, as you can make decisions based on historical data that shows what your actual needs are likely to be, rather than relying on arbitrary budget increases. 

Other areas to focus on include monitoring your rates of policy compliance to ensure expense controls are effective, and tracking the time it takes to approve and process your expenses. Long reimbursement cycles frustrate employees and can delay the process of financial reporting. 

 

7 ways to increase visibility and control over spend

Discover 7 key capabilities every spend management tool needs to provide finance leaders with spend visibility and increased cost control.

Get the checklist here

How SAP Concur can help you get deep visibility 

One of the most immediate and impactful ways to get the kind of across-the-board visibility we've discussed is by adopting the right tools and software. SAP Concur offers robust solutions that deliver spend visibility for travel and expense programmes, regardless of the size of your organisation. Concur solutions offer an integrated approach to travel and expense management – eliminating barriers to visibility and transparency while providing powerful reporting and analytics. 

Concur Travel & Expense streamlines the management, review, and approval of expenses so that you can see exactly where, when, and how your funds are being spent. Instead of fragmentation and siloes, gaps and blind spots, you now have a unified view of all relevant travel and expense data for 360-degree visibility. For example, you can capture spending data from travel bookings, corporate credit cards, mobile receipts and more.  

Concur also enables you to derive actionable insights from your spending data via easy-to-use dashboards and reports. Finance professionals, travel managers, business analysts, and other stakeholders can analyse metrics for real-time insights, enabling tactical problem-solving and strategic oversight. 

Additionally, rather than wait for quarterly audits or year-end reviews to uncover policy issues, Concur solutions help you stay ahead of the compliance curve. Automated policy checks can flag or stop the submission of non-compliant expenses. This increases your compliance rates, educates employees about what is allowed in real-time, and helps ensure managers don't get bogged down in a never-ending manual quest to find faulty submissions and rectify them. 

Finally, Concur integrates with your existing ERP, accounting, HR, and other systems, ensuring that travel and expense data flows automatically where it needs to go.  

The takeaway 

If you’re looking for total visibility into your travel and expense data, look no further. Concur solutions can help you get the real-time holistic view needed to make your business more efficient while improving compliance. Reach out to us today to learn more about what SAP Concur can do for you.