- How to Rock the Future with Committed Spend Analytics
How to Rock the Future with Committed Spend Analytics
According to a benchmarking report by ProcureCon, spend analysis is the most popular automated procurement process among their survey respondents, with 2/3 currently automating the process.
The rock band Whitesnake had a hit with “Here I Go Again” back in the 80’s. One of the key lyrics in the song that David Coverdale sang was “Well I don't know where I'm going, but I sure know where I’ve been.” That’s the same problem many organizations are facing today in relation to spend analytics – they have visibility over purchase to pay, but they need help predicting how much money they will need for the future.
Well, they’ll have to sing a different tune, because Basware has solved their problem with our new committed spend dashboard.
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Why do you need committed spend analytics?
With most software, you can get an endless stream of analysis based on what has happened. It confirms the past. It tells you something you already know. But the past should also tell us what we can expect in the future, and that’s the aim of our new committed spend analytics dashboard. We want to show you where you’re going and help predict cash flow by seeing when spend is likely to occur. Leveraging predictive analytics and real-time data about what the future will look like gives you an edge.
What is predictive analytics?
Predictive analytics is about recognizing patterns in data to project probability. This technology uses historical data, trends, and patterns to make predictions about what is likely to happen next. The process leverages data along with machine learning, statistics, and analysis to create a predictive model to help forecast future events. It’s the logical result of big data and business intelligence.
Data-driven predictive models can help companies solve long-standing problems in new ways – such as committed spend. It starts first with a business goal such as using data to gain visibility and cut costs, but then evolves to the next level – how do we use data to predict cash flow needs for the business?
How does the committed spend dashboard work?
With an impressive user interface (UI), the highly interactive dashboard was created for ease of use and flexibility to allow the user to start their analysis from any dimension available.
It helps to highlight two innovative concepts within the dashboard:
Commitment of spend with commitment levels that are graded from 1 to 3 to gauge the probability of spend
Expected due dates to provide insight as to when spend will occur, which helps with overall cash flow and financial reporting.
Read on to learn how this can help you better manage cash flow and optimize spending.
3 Ways Committed Spend Analytics Will Help You Rock the Future
Basware not only helps you access the insights in your spending data and predict the future, we put it all in one place for you to see with:
1. One Comprehensive View:
The committed spend dashboard gives you a comprehensive view into all open commitments (payment plans, purchase orders, and invoices) regardless of its source, from internal or external documents. This helps in long-term planning for budgeting, cash forecasting, and cost control. The overview dashboard:
Provides total visibility for open spend
Let the user freely define and sort the allocation of the commitments through organization, cost centers, and accounts
Enhances communication and collaboration between different financial and sourcing teams like procurement, business controllers and treasury to plan financial future.
2. Expected Due Date Prediction:
There is an expected due date prediction for all open commitments on a unified timeline – showing committed spend by due date. The calculated date represents the date when the payment is due if the process of the document proceeds as expected. This enables:
Visibility of all committed business documents on a unified timeline
Data points and history to predict when spend is expected to actualize
Cash forecasting for more predictive financial planning
3. Spend Commitments Categorization:
The user can categorize spend commitments based on different phases of the process flow, which simplifies the business flow of documents. The commitment level increases while the system gets more info on both the validity of the business document and as well as the associated payment. This helps you:
Identify the level of commitment for better cost control, cash forecasting and financial management
Pinpoint unmanaged spend within the process
Manage workflow progression from purchase orders to invoicing to payment.