expenzing3-blog

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10 ways to Reduce Expenses with effective automation of A/P and Procurement

With increasing pressure on CFOs to shave off (yet another) 5-10% of spend each year, what better way than to look at expense management and procure-to-pay solutions?

Expenses have often been the “invisible dragon” in the room – eating away at the profitability of your enterprise. CFOs and CPOs can tame the “beast” with Expenzing.

Post-modern ERPs like Expenzing represent the new wave of solutions, which augment ERPs, to bring in higher efficiencies and controls in the finance and procurement functions. Such solutions bring in expertise in specific areas to streamline and optimise, as well as provide strategic process enhancements in procurement and payments.

 Using the Expenzing suite, there are many dozens of ways to control expenses. A few examples are listed here. 10 to be precise.

10 Ways to Reduce Expenses:

1. Small A/P teams which can increase their productivity by 100-300%!

Having an expense management solution enables businesses to run efficiently, even with smaller A/P teams. Process employee reimbursements and supplier invoices efficiently.

 2. Centralisation. Stop maverick buying.

Automation helps get the HQ and the branch offices all on the same page. Centralisation of procurement and payments has never been easier. Automated procure-to-pay and sourcing solutions like Expenzing give you direct savings.

 3. Enforcement of Rate Cards for all purchases and payments

After the Procurement team spends significant time in negotiating rates with suppliers for ongoing purchases, the challenge becomes, “how to enforce the finalised rates”. An automated system which enforces Rate Cards ensures that there is no way to bypass negotiated rates, from any office or department.

 4. Payment Fraud Mitigation

You can prevent fraudulent payments to wrong suppliers by using automated tools like Expenzing for proper authorization of any payment. Automated due diligence to detect potential frauds in payments makes your task easier.

 5. Welcome, Auditors!

Don’t cringe when auditors want additional details! With detail level information being online, you save time in audits. Now auditors can validate the controls deployed by you, as well as can look into any specific payment made in the past.

 6. Online Negotiations for best rates

Use new age tools like online Reverse Auctions to get the best rates from chosen suppliers. This is a proven negotiation methodology that can help you get 20-30% lower rates.

 7. Save time and reduce errors in Tax credits

You can manage your GST input credits (or of any taxes of your country) efficiently, thus saving time of your teams. Expenzing solutions help you streamline vendor empanelment especially related to taxes. You can ensure that supplier invoices quote the GST data correctly so you get the right tax credit.

 8. Timely and Assured Receipt of Supplier Invoices!

With an effective automated solution, no supplier invoices are misplaced. You enable your supplier to submit invoices online through the supplier portal to save time and get discounts.

 9. Optimised Travel Expense Processes

Travel expense management can be done effectively through a specialised travel expense management software. The earlier you book, the cheaper the tickets. And you can now minimise cancellation wastages. Also, reconcile ticket invoices through automation to reduce the travel wastages.

 10. Expense Policy Enforcement

Having an effective expense management solution enables the HQ to ensure expense policy compliance and provides visibility and control over what’s claimed and reimbursed.

 Organization have wasted a lot of time, effort, and money in managing indirect expenses the traditional way. Now is the time to go digital and manage spend better with solutions like Expenzing to achieve financial control.

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How Organizations can use Procure to Pay software to reduce Spend

Summit in Mumbai. In this session Ila talks about how procure to pay technology is helping CFOs do things better, get wastages out of the way and achieve their objective of reducing Spend while enhancing good governance.

Areas where procurement software and supplier relationship management software can help you reduce spend:

·         Suppliers management

·         Procurement

·         Supplier payments

·         Travel and Expense Management

·         Assets

Process controls to reduce maverick and unauthorized spend are to be expected from a good procure to pay solution, and also from strategic sourcing solutions.

Here are some process controls which procurement technology helps you enforce,

1.       No PR, no buy – No purchase can be made if it is raised without Purchase request

2.      No PO, no pay – No payment is to be made if it is requested without a Purchase order

3.      Only Empaneled Vendors get paid – Procurement should be done only with vendors who have registered themselves and have been empaneled for business

4.      No budget, no buy– No purchase can be made if there is no budget allocated. System to check payment amount against budget allocated

5.      Visibility into every department and every branch office spend – System to get insight into spend made at all level to reduce wastages and identify saving potential

Companies are putting these process controls in place with proper audit trails and governance to eliminate wastages.

Further, a good procure to pay software product offers effective controls in procurement and Accounts Payable processes, like these:

Enforce Granular and Mandatory DoA- Set up Delegation of Authorization (DoA), which helps system to route approval requests to the relevant person (be it a zone, a branch, a department, or an authorized person). The Rules Engine has to be mandatory, granular and changeable – this cannot be done effectively in an ERP.

Facilitate Centralisation – Head office to make all the procurement and the payment. No maverick buying by end users with random vendors.

Sourcing Technologies like RFX, Online Negotiations – New technologies like online RFP’s reverse auctions etc. are used by Banks, Insurance and IT companies these days to get best negotiated prices from their vendors. These technologies when put in place are helping companies reduce spend significantly.

Enforcement of Rate Cards – Procurement teams are put into place and rate cards are made effective for any and every procurement done. Be it a product or a service, there is a rate card in place and the procure to pay system enforces it.

With these process controls you not only reduce spend, but also bring in tight internal financial controls. With Expenzing procure to pay and expense management software you can transform your procurement and Accounts teams.

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How Organizations can use Procure to Pay software to reduce Spend

Excerpts from the Speaker Talk by Expenzing CEO, Ms. Ila Imani at the CFO Engage Summit in Mumbai. In this session Ila talks about how procure to pay technology is helping CFOs do things better, get wastages out of the way and achieve their objective of reducing Spend while enhancing good governance.

Areas where procurement software and supplier relationship management software can help you reduce spend:

·         Suppliers management

·         Procurement

·         Supplier payments

·         Travel and Expense Management

·         Assets

Process controls to reduce maverick and unauthorized spend are to be expected from a good procure to pay solution, and also from strategic sourcing solutions.

 Here are some process controls which procurement technology helps you enforce,

1.       No PR, no buy – No purchase can be made if it is raised without Purchase request

2.      No PO, no pay – No payment is to be made if it is requested without a Purchase order

3.      Only Empaneled Vendors get paid – Procurement should be done only with vendors who have registered themselves and have been empaneled for business

4.      No budget, no buy– No purchase can be made if there is no budget allocated. System to check payment amount against budget allocated

5.      Visibility into every department and every branch office spend – System to get insight into spend made at all level to reduce wastages and identify saving potential

Companies are putting these process controls in place with proper audit trails and governance to eliminate wastages.

 Further, a good procure to pay software product offers effective controls in procurement and Accounts Payable processes, like these:

 Enforce Granular and Mandatory DoA- Set up Delegation of Authorization (DoA), which helps system to route approval requests to the relevant person (be it a zone, a branch, a department, or an authorized person). The Rules Engine has to be mandatory, granular and changeable – this cannot be done effectively in an ERP.

 Facilitate Centralisation – Head office to make all the procurement and the payment. No maverick buying by end users with random vendors.

Sourcing Technologies like RFX, Online Negotiations – New technologies like online RFP’s reverse auctions etc. are used by Banks, Insurance and IT companies these days to get best negotiated prices from their vendors. These technologies when put in place are helping companies reduce spend significantly.

Enforcement of Rate Cards – Procurement teams are put into place and rate cards are made effective for any and every procurement done. Be it a product or a service, there is a rate card in place and the procure to pay system enforces it.

With these process controls you not only reduce spend, but also bring in tight internal financial controls. With Expenzing procure to pay and expense management software you can transform your procurement and Accounts teams.