Spend management software tracks and manages non payroll business expenses such as the cost of raw materials and components, or services such as marketing and subscriptions. This software is used to gain insight into company spending across the entire organization by collecting and analyzing spend data. This type of software helps companies avoid overspending and account for business expenses, ensuring they are accurately reflected in financial statements. Spend management software is used mostly by procurement departments to plan and monitor business expenses, but can also be used by accountants for financial reporting purposes.
This type of software should not be confused with expense management software, which focuses exclusively on employee-initiated and ad hoc expenses, such as airfare, lodging, and meals. Spend management integrates with procurement software and supply chain solutions such as supply chain planning software and sales & ops planning software.
To qualify for inclusion in the Spend Management category, a product must:
Provide a centralized repository of procurement and purchasing data
Manage corporate or procurement spend
Include rules and workflows to approve purchases and payments
Match purchase orders, supplier invoices, and payments
Compare procurement budgets with actual spending
Provide real-time reporting of spend transactions
Analyze historical data and identify changes and trends in spending
Deliver suggestions for savings by product, supplier, or department
