Emburse Research Finds Eight in 10 Companies Vulnerable to Spend Leakage

According to new research from global spend management leader Emburse, countless organizations are missing out on opportunities to improve their overall cash flow, reduce their existing operational costs, and identity and prevent expense fraud.

Without further ado, let’s go over the findings.

How many companies feel their spend management is optimized?

Of nearly 200 finance departments studied, Emburse found that only 17% had fully optimized their spend management processes, while the remaining 83% retained semi- or fully manual processes, leaving valuable optimization savings opportunities up for grabs.

Organizations with fully optimized spend management systems can enjoy a host of benefits over their manual-based counterparts, including:

Timed payments to help maximize cash flow and leverage early-pay discounts
Reduced cost leakage due to out-of-policy expenses and fraud
Improved and better-informed decision-making regarding existing vendors

By automating all applicable processes, organizations also stand to save valuable resources while reducing employee effort and the endless frustrations that can arise from manual data entry and related processes.

The 4 stages of Spend Optimization

To help with this spend automation and optimization effort, Emburse has identified four main stages in the journey towards total spend optimization, which can apply to both organizations as a whole or to independent departments within an organization:

AdHoc Stage: This is the most manual stage in the spend optimization journey, in which organizations enjoy little-to-no automated processes and rely heavily on sweat and tears to manage spending.
Managed Stage: Organizations at this level may have some processes automated, which is better than nothing, but will still have a long ways to go. Manual processes are still over-utilized in comparison to automation.
Accelerated Stage: This is the step below complete spend optimization. At this stage, organizations likely have a well-implemented, automated spend management system for most of their processes, which is great! However, there is always room for improvement—after all, automation and optimization are not the same thing.
Optimized Stage: The final stage and end goal for any organization that finds itself constantly behind its own spending. At this stage, just about everything in the spend management process that can be automated is automated, all proper checks and balances are in place, team members are more engaged because they’re spending their time on high-value work they care about, and the bottom line looks great.

What finance leaders think about modern spend

In the report, Emburse CEO Eric Friedrichsen noted that, “Finance departments are in the midst of a major shift from spend control to spend optimization. Employees want more autonomy over what they spend on, when, and with who. Finance departments can get ahead of this by improving their visibility into spending and putting in place guardrails that are informed by data and enforced through automation.”

He also added that finance teams that choose to “continue to operate with predominantly manual processes or siloed data systems are at a significant disadvantage because they simply spend too much time on the basics, and don’t have the time or the ability to generate the kind of insight needed to optimize their spend.”

Meanwhile, Robert Kugel, SVP and Research Director at Ventana Research, also noted that the pandemic, alongside other global concerns, presented countless challenges to ill-equipped finance teams, forcing them to reevaluate and revamp their existing processes to best weather what seems like an endless storm of uncertainty.

“In the case of spend management, some were able to provide their entire organization with significant improvements to productivity, control, and employee satisfaction. Unfortunately, many continue to use ad-hoc, manual and reactive spend methods,” Kugel said.

“However, armed with a clear set of objectives they can use today’s spend management solutions to quickly evolve to optimize processes and spend while future proofing their operations from the impact of any disruption.”

A better way to optimize corporate spend going forward

To meet these needs and help organizations better optimize their spend management, Emburse has developed the Spend Optimization Model.

This solution allows businesses to pinpoint processes that cause spend leakage, calculate the cost impact, and identify necessary improvements, which can help accelerate their progression and that of their existing teams through the four stages of the optimization journey.

About Emburse

Emburse is a modern spend management company that offers a growing portfolio of spend solutions that revolutionize the way organizations manage employee expenses, process invoices and make payments. Emburse humanizes work by empowering business travelers, finance professionals, and CFOs to eliminate manual, time-consuming tasks, so they can focus on what matters most.
Its innovative offerings, which are tailored to meet the unique business needs of specific industries, company sizes, and geographies, are trusted by more than 9 million users in more than 120 countries. Over 16,000 customers, from start-ups to global enterprises, including Bosch, Grant Thornton, Telefónica, Lufthansa Systems, and Toyota, rely on Emburse to make faster, smarter decisions, improve compliance, and optimize spend -- making corporate spend deliver meaningful value for the organization.