Who doesn’t love to spend! Who wouldn’t love to read blogs about What would be the funniest way to waste a million dollars? Or 40 Crazy Ways to Have Fun With Money. A lot of companies would love to spend millions of dollars entertaining their clients and buying employees slippers for their birthdays! The reality is, you can’t just waste money because it defeats the purpose of putting in all the effort to obtain it in the first place.
As working class individuals, we eagerly await payday in anticipation of having just that little bit of money left over to spoil ourselves with the latest trend or that oh-so-needed jacket for winter that we have been saving up for, while the icy winter slowly crawls up underneath our meager summer shirts. However, by the time we have to face necessities like food , having a roof over your head and petrol to get around, these dreams slowly fade away.
We would all like to be an extension of our personalities and wear the latest Gucci boots or go kayaking in Tahiti for the weekend. Until we have done enough of the legwork to reach those pleasurable moments we have to face the reality of our everyday musts.
Every business leader is like a father figure, and every decision they make affects all the members of their family i.e. their organization. Every family member has to do their part to take care of how money is spent, otherwise, no one would eat at the end of the month!
The term Spend Control sometimes sounds ‘yukky’, just like another word your mother used for the supposedly “good for you vegetables” that was negotiated down your throat! Or annoying like the perfect lines you had to walk in at school, where everyone had to look the same and walk the same like stormtroopers in a scene from Star Wars. But make no mistake, spend control isn’t yukky or annoying – it is necessary for your organization to thrive!
For a business to be an efficient working machine, every cog has to turn and the whole machine needs to be oiled in order to function properly. Spend Control is that essential oil. The business needs to spend their revenue on the right things for the business to be in motion at all times. For instance, let’s say your business is an internal combustion engine. If the oil cooler pipe (Spend Control) is leaking, the engine (your business) becomes hot because it is not able to transfer the heat (stresses) to the oil, which is usually funneled from the cooler pipe through a heat-exchanger (departments of the company) to cool everything down. If the oil isn’t cooled and flows back into the hot engine, what do you think will happen?
Even someone who knows nothing about cars knows that excess heat causes pressure and pressure causes explosions!
Spend Control is necessary for your business and in your life!
What does Spend Control entail?
Spend Control is the term or tactic given to all the processes that an organization uses to manage its expenditure in a disciplined way.
Every department has a role to play in spend happening in the business from the purchase order requester to the approver stage.
If you conduct a thorough spend analysis of your business, you can identify gaps across your spend data and then put an action plan in place to prevent wasted spend.
The key is to find a solution that is easy to use, that integrates with your enterprise resource Planning (ERP) and can easily be adapted in all your departments.
Do you agree that spend control is a necessity?