Has finance process kept up to international requirements?

Today’s procurement professionals have to be diligent in countless areas to keep up with the ever-changing global market. More organizations than ever are buying and selling products globally, which means many are making these worldwide transactions before their financial operations are mature enough to manage multi-currency and multi-national hurdles. 

Even though markets are now global, organizations’ financial operations have not been able to scale processes quickly enough to process international payments with tax compliance. For this reason, today’s procurement professionals must constantly be on the lookout for ways to update their financial operations to stay in the race, specifically when it comes to optimizing the procurement process, spend visibility, procurement software, and more.

Let’s take a closer look at spend visibility first.

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What Is Spend Visibility?

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According to Spend Journal, spend visibility is “the level of oversight and understanding you have about where company funds go.” The journal offers an example: “Finance teams who can accurately show where dollars are spent – in as close to real time as possible – have a high degree of spend visibility.”

So, why does spend visibility matter? What difference does maximizing spend visibility make regarding financial operations? All the difference in the world! Let’s dive into the why of it.

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How Spend Visibility Impacts Your Financial Operations

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Most people think of spend visibility as tracking business expenses across the year, but it’s far more than that. It gives procurement a direct window into the productivity and efficiency levels their company’s financial operations and purchasing processes are currently operating at. 

This window is full of data, which after being analyzed and broken down, will allow finance teams to budget their operations accordingly. It will also alert them to any areas of concern, so they can course-correct if and when needed. 

From here, your spend analysis might uncover an issue that leads you to realize you need a change. So what can you do to implement it in the best way?

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Changing Your Procurement Process

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Enacting a proactive and strategic approach to improving your procurement process—like using updated procurement software, for starters—is vital for optimizing your operations’ efficiency and profitability. It can also make all the difference when buying and selling products globally. 

Listed below are some simple yet highly effective steps you can take to ensure your procurement process is operating at peak conditions.

• Minimize Costs and Increase Leverage - To minimize supplier costs and increase their buyer leverage, companies need to look closely at their suppliers to see if they are doing business with more than one company of a similar branch or family tree. Identifying such company kin will give them leverage to pick and choose, negotiate better contract terms, and go with the companies with more spend.

• Conduct Real-Time Spend Analysis with Procurement Software - By taking advantage of an easy-to-implement, cloud-based software-as-a-service platform, corporate-wide spend can be analyzed in real-time. Spend managers can then use this information to identify the most optimal sourcing opportunities, mitigate risk, and keep close tabs on employee purchasing to gauge maverick spend. 

• Create and Maintain Close Collaboration Between Operations and Finance - Ensuring operations and finance enjoy a symbiotic relationship is key to success, as it is a vital ingredient to the recipe for restructuring the entire procure-to-pay system. The sweet spot comes with the perfect division of focus from each side, meeting in the middle to accomplish the shared end: optimum efficiency and profitability. Zip helps teams with compliance and workflows making end-to-end buying processes much, much easier – even when there are multiple stakeholders. 

Usually, this looks like operations teams concentrating on driving efficiencies while finance focuses on gaining clarity on the supply chain. The result is a shared and ever-evolving strategy where everyone wins.

If you’re looking for resources on international markets and finance processes, connect with us today at Zip.