How to Cut Costs Not Quality with Automated Spend Management

Cutting business costs is a go-to strategy for most organisations facing the damaging effects of inflation and supply chain issues. The problem is, if too many corners are cut in a bid to protect the bottom line, it can have a detrimental effect on your business. 

The good news is, there are some business cost cutting strategies that don’t damage the quality of your products and services or the employee experience – they can even enhance them. 

In this blog we’ll explore four ways you can automate business spending to reduce costs, without sacrificing quality.

How Can Business Cost Cutting Negatively Affect Quality?

Using inferior raw materials, switching to unreliable-but-cheaper suppliers or reducing headcount can all have a a negative impact on your business. Long term, these measures can actually cost you more than you save.

There are other business cost cutting measures that don’t reduce quality – in fact, they often improve it. Finance automation is one of these measures, as it enables you to cut business spend without reducing the quality of your products and services or diminishing the employee experience.

 

Your Guide to Financial Automation: 5 Steps Toward Digital Transformation

For practical tips, helpful questions to ask, and next steps to keep you moving, or get you started, on the journey toward digital transformation check out the guide below:

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What are the Benefits of Finance Automation?

Initially, employees might be concerned that finance automation will make their roles redundant, that they’ll lose their previously enjoyed benefits and compensation, or worry about their entertainment and mileage budgets being slashed.

You can alleviate employee concerns by letting them know that as well as cutting costs, finance automation can also have benefits for them and the business. It builds business resilience, improves productivity and reduces the potential for errors and unintentional fraud.

Let’s look at four ways you can cut business costs whilst maintaining or improving quality.

Four Business Cost Cutting Strategies That Increase Value

1. Automate Finance Processes 

By choosing a cloud-based platform to handle business spend management, you not only cut business costs but quickly start streamlining operations, reducing errors and increasing productivity.

Four steps to choosing the right finance automation solution:

• Evaluate current workflows, identify repetitive manual tasks and uncover bottlenecks or areas of inefficiency. 
• Choose solutions that integrate with back-office systems including ERP, HR and CRM, for a more holistic view of spend.
• Implement a solution that consolidates credit card and p-card spend data, for ease of approval. 
• Reporting tools allow employees to identify trends, anomalies and potential issues, helping them make informed decisions.

Quality check

SAP Concur solutions cover the range of business spend management processes, including Expense, Invoice and Travel, with added features such as reporting dashboards and mobile apps. According to Analysys Mason 2022, Travel, Expense and Vendor Invoice Management Study, 29% of businesses cited increased employee productivity as a top benefit of employing travel and expense (T&E) solutions and 36% cited finance/accounting employee time savings as one of the top benefits of implementing an automated invoice solution.

2. Reduce or Eliminate Unnecessary Spend 

Once you’ve automated business spending, the next step is to reduce or eliminate unnecessary expenses. Be sure to consider the impact any changes will have on customers, partners and employees.

Four steps to tackling unnecessary spend:

• Categorise expenses, including fixed, variable, direct and indirect expenses.
• Track expenses to identify trends, anomalies and areas where savings can be made.
• Compare your expense processes and policies against industry benchmarks and competitors to identify areas of possible improvement.
• Review expenses regularly to ensure you’re not missing anything.  

Quality check

Business Intelligence allows you to keep a close, analytic eye on what’s being spent across your organisation. According to a recent study, 72% of businesses agreed an automated T&E solution allows better response to business challenges thanks to improved visibility of company spend data.1

3. Negotiate Better Supplier Rates 

Supply chain issues have hit the headlines and businesses hard in the last couple of years and you’ve probably had to develop new skills in negotiation to get better rates on goods and services to cut business costs. 

Four steps to tackling negotiating with suppliers:

• Do your research. Don’t be afraid to leverage other suppliers’ rates in negotiations - loyalty is commendable but not if it costs your business.
• Make suppliers feel valued and appreciated to boost their likelihood of being flexible with pricing.
• Price isn’t not the only negotiation point. Identify other objectives such as delivery time, quality, service levels, warranties or payment terms which could all have positive financial ramifications.
• Have a concise, clear contract to help prevent potentially costly misunderstandings or disputes in the future.

Quality check

Concur Invoice gives you invaluable visibility so you can enter supplier negotiations with all the information you need. In a recent study, businesses realised 11% cost savings through supplier-negotiated rates and discounts with SAP Concur solutions in place1 .

4. Improve Compliance 

By ensuring business spend policy is adhered to every time an employee submits an expense claim, books travel or approves an invoice, you cut costs whilst reducing employee stress. 

Four steps to improving compliance:

• Implement internal controls and conduct regular audits to help prevent and detect fraud.
• Educate employees about fraud prevention and detection to create a culture of honesty and integrity.
• Utilise tools that enforce policies at the moment of spend and highlight tax requirements automatically.  
• Encourage employees to report suspected instances of fraud.

Quality check

Intelligent Audit drives compliance, identifies fraud and minimises workloads for your team while Tax Assurance by Blue dot helps employees keep up with local tax regulations, allowing you to maximise VAT reclaim, for example. Businesses implementing SAP Concur solutions or SAP Concur partners saw a 26% increase in tax reclaim savings1 .

Keep Quality High and Costs Low with SAP Concur Solutions

By following these key steps to cutting costs, you’ll put your business in a stronger financial position to tackle whatever is ahead. What’s more, you’ll do it without cutting corners on your products and services, damaging your reputation with suppliers or engagement with employees. In fact, you’ll improve them.

See for yourself how the unique features and benefits of SAP Concur solutions can help you keep business costs under control by booking a demo for Expense, Invoice, or Travel, or contact us for more information.

• 1 a b c Analysys Mason Study 2022