As the uncertainty amidst the global pandemic and economic disruption continues into 2021, companies need to use every tool at their disposal to support financial decision-making. Visibility into company spend data is extremely valuable for enabling datadriven decisions, but many companies struggle to manage spend information and maintain data accuracy. Best-in-Class companies are driving productivity and even profitability in the current economy by connecting disparate sources of spend data for greater access and visibility into company spending. By following these Best-in-Class strategies, all companies can more effectively forecast for future initiatives and achieve Best-inClass levels of success.
Seizing Opportunities in a New Business Environment
With the COVID-19 pandemic as a significant factor in planning for the future, businesses need to stay nimble in managing cash flow and forecasting budgets. Aberdeen’s recent expense and invoice management survey (see appendix) indicates how U.S.-based companies (1-1,000 employees) plan to approach the impact of the pandemic on their business as of October 2020.
While the majority of respondents are either shutting their doors (7%), surviving (22%), or recovering (26%), many businesses in the US (44%) are anticipating revenue increases and growth on the horizon. Future travel plans responses are also showing some optimism (see sidebar). 40% of U.S. companies with 1 – 1,000 employees say they believe domestic travel will start up again in early 2021 and 19% of companies believe international travel will resume by then. As companies work towards and await some semblance of normal business operations, they will need to continue to keep a close eye on cash flow and optimize remote working. This report will uncover what all companies can do to scale their business effectively during these challenging times and how they can gain better visibility into their company spend data to improve planning through data-informed decision making.
U.S. companies are trying to figure out what the future holds for their business, workforce, and everything in-between. The top financial management priorities that finance teams across the U.S. are striving for in 2021 (see sidebar) reveal the motivations behind how they manage their company spend data. Companies indicated that regulation and compliance are at the top of their list of aspects to improve alongside data accuracy and tracking of company spend. By automating steps in expense and invoice management process, companies can eliminate manual errors to enhance data quality and enable timely compliance to help them avoid regulatory and reporting issues. Through integration, businesses can connect disparate data sources to create a centralized repository of information and develop a unified, single view of spending across the business. Whether companies are reducing spending or pushing forward for growth, containing costs and controlling cash flow are always critical.
Top Companies Find a Way to Execute and Perform
Understanding how top-performing companies are handling the effects of the pandemic and strategizing how to move forward provides an outline for companies to follow. Aberdeen’s performance maturity matrix for managing company spend. The maturity level is defined by Aberdeen’s Best-in-Class methodology (see appendix). The metrics below reflect performance in areas that are critical to improving company spend management.
Performance by these maturity levels differentiates Best-in-Class U.S.-based companies with fewer than 1,000 employees from their competitors. Through the adoption of Best-in-Class capabilities and technology investments, All Others can similarly increase their company spend under management to empower data-driven decision making, profitability and productivity.
Utilizing Company Spend Data for Data-Driven Decisions
A company’s ability to generate cash has a direct impact on its survival and success, especially during an economic downturn. A strong cash flow improves operations across the board, including investing in research and development (R&D), acquisitions to fuel future growth, providing value for shareholders, or paying off debt for better financial performance and ROI. Cash flow also has a tremendous impact on companies that are scaling back, just trying to maintain their operations, as well as those that are planning for growth. Companies that are struggling with any of these action plans need to find innovative ways of either developing new revenue streams or cutting costs. Thus, it is vital for companies to understand their company spend and have the ability to optimize cash flow with near real-time company spend data insights. However, only 35% of U.S. companies with less than 1,000 employees see increasing financial visibility to cash flow projections as a critical tactic for future-proofing their business in times of uncertainty. This demonstrates a need for more U.S. companies to focus their efforts on improving financial visibility in order to gain control over their cash flow. U.S.
Companies are utilizing their company spend data. The Best-in-Class and All Others are relatively even for many strategic methods for putting company spend insights into action, but where the Best-in-Class shine is in using company spend data to better manage their cash flow.