The spend cube allows you to look at all of the analyzed data from a variety of angles. Get a clear picture of your organization’s spend and make informed sourcing decisions. This guide covers how procurement data can be extracted, refined, and analyzed for actionable insights and value. Stacked bar charts show the total value broken down into sub-categories, making them useful for comparing the composition of spending across different categories or suppliers. Bar charts are versatile and effective for comparing values across different categories.They are commonly used to visualize spend by category, supplier, or business unit.

Spend analytics vs. spend analysis

• BI tools excel at creating interactive dashboards and visualizations, making it easy for procurement teams to analyze complex spend data.
• It helps organizations get a clearer view of where money is going—across both direct and indirect spend, so they can optimize their procurement strategies and align spend with business goals.
• These can transform the way you go about business, including how you conduct a spend analysis.
• These systems are designed to automatically flag discrepancies, such as mismatched invoice amounts, duplicate payments, or missing purchase orders, by embedding compliance checks directly into the workflow.
• Another massive advantage of automation is the increased frequency of analyses, which prepares you for the dynamic business environment.

AP automation can help support these efforts by better tracking vendors’ and suppliers’ environmental policies to ensure compliance. AP automation solutions can also improve transparency in the bill payment process with a vendor portal. This allows vendors to easily track their invoices’ status and ensures they receive clear and accurate information, resulting in a stronger, more collaborative supplier relationship. Supplier performance insights help strengthen supplier relationships and automated spend analysis promote proactive development. Companies may easily identify underperforming vendors using automated expenditure analysis.

Reliance on manual reporting

According to McKinsey & Co., organizations using automated procurement solutions have seen a 30% reduction in procurement processing costs, highlighting the impact of automation. For example, digital transformation can address data fragmentation and improve spend visibility by centralizing procurement systems and ensuring real-time access to spend data. Digital platforms like user-friendly supplier portals support improved supplier collaboration which in turn simplify supplier management, strengthen relationships, and enable better contract negotiations. Once the data is cleansed and classified, it can be analyzed to gain insights and identify trends. Various analysis techniques such as spend distribution, supplier performance analysis, cost variance analysis, and benchmarking are used to examine the data. The analysis aims to uncover opportunities for cost savings, supplier consolidation, contract compliance, and other strategic insights.

Automated categorization

Despite the difference in spend purpose and necessity, both are essential to maintaining business operations. Enterprise Resource Planning Systems allow for integrated management of the core business functions through software and technology. Spend analysis is unique to every business, and therefore, there is no one good way to do it all. There will always be gaps in our knowledge, there will always be things we are missing. But, if you aren’t shining a light on all aspects of your corporate spend, then you are in the dark about how much your business could be saving. What you will need is a Custom Dashboard, where you can mix and match any dimension, measure, and chart type for any report you need and slice and dice with any data point you want.

What kind of reports can the spend analysis software generate?

With ProcureClix’s procurement software, you can stay compliant and informed. Procurement teams spend entire weeks manually reconciling spend data from dozens of disconnected systems while critical cost-saving opportunities slipping by unnoticed and competitors leverage real-time insights. When deciding how to automate accounts payable processes, some Online Bookkeeping companies consider environmental sustainability as described by their environmental, social, and governance (ESG) policies.

• Accounting teams continue to lag behind many other professions in automation, and even when they work to find solutions, they don’t solve the whole problem.
• ProcureClix stands out by offering a completely managed service that transforms procurement spend data across your entire organization into strategic intelligence.
• Spend Analysis provides sourcing teams with insights using historical spend data, supporting strategic and tactical sourcing decisions, aligned with Procurement (KPI’s).
• In an era where speed and accuracy are critical to financial success, many finance teams are falling behind.

Spend Analysis Tools

While there are numerous steps to ensure your spend analysis is accurate, the first and most important stage is ensuring your data is uncontaminated and error-free. recording transactions Further, it is crucial to adopt a standard classification schema that the industry adopts. Standardization is a critical element that will help you to organize and correlate spend data for actionable insights.

• AI ensures data is clean, categorized correctly, and always up to date—improving the accuracy of procurement reports.
• Category Management Dashboards, provide real time information, help shape policy and strategy, provide progress on strategic and tactical sourcing decisions.
• This means less time spent on customization and more immediate access to actionable insights.
• To combat this, you can identify contract leakages and maverick spending.
• Get detailed insights into your spend data and make informed, strategic decisions using advanced GEP SMART spend analytics tools.

Don’t worry about watering down the data too much at this stage, you’ll use a fine toothcomb later on in the analysis. Tracking down incomplete, missing, or incorrect data is challenging and time-consuming. With loads of data down the line, stakeholders might not always have all the data points on hand, which can waste the analyst’s time.

• It offers actionable information with item-level visibility across the enterprise, helping you understand your spend — what, who, where, and whether you’re getting your money’s worth.
• Once you have narrowed the scope down, you can capture your spend data and consolidate it into one central database.
• This KPI is valuable because it can pinpoint opportunities to save or cut back on expenses by negotiating better contract terms or changing suppliers.
• Supplier strategies and potential savings opportunities can emerge using procurement spend analysis dashboards.
• Without appropriate inputs, the usefulness of spend analysis software is restricted.
• Instead, we offer first-hand observations and guidance based on decades of practitioner experience to help you self-assess your needs and options.

Implementing and customizing BI tools to handle procurement-specific data often takes significant time and development resources. This delays the realization of cost savings and efficiency improvements, resulting in missed opportunities as organizations wait for full spend visibility and actionable insights. Unlike dedicated spend analysis tools that offer automated data cleansing, classification, and reporting, Excel requires repetitive manual processes for updating and analyzing data. This lack of automation means that procurement teams spend more time on administrative tasks rather than gaining actionable insights. Spend Analytics aims to provide procurement with insights using historical spend data, that form the basis of strategic and tactical sourcing decisions, protect supply, and deliver value for money.