Financial management decisions carry a lot of weight. Decision-making in finance can impact not only the immediate spending of the company but also its long-term growth potential. The process of decision-making in finance, however, is often complex.
Organizations of all sizes can struggle with the financial decision-making process. Data from McKinsey shows that inefficient decision-making leads to $250 million of wasted labor costs per year. But, when finance teams are able to make decisions quickly and efficiently, companies are twice as likely to report financial returns of at least 20% as a result of recent decisions.
Senior leadership and finance professionals need access to the right data, in the right context, to improve key business outcomes, such as spend optimization. If you are seeking to improve financial decision-making at your organization, here are some steps you can take.
Financial decision-making requires full insight into the current health of the company’s spending. Spend visibility is the process of aggregating expense and spending data from many different sources within your company to get a baseline of the company’s past and present spending patterns. From there, the organization has a clear roadmap to identify where you can improve.
[Read more: Spend Visibility: Benefits, Challenges, and Best Practices]
Spend visibility may seem like an achievable starting point, but many organizations struggle to get a handle on where their budgets are going. More than 80% of finance leaders admit to blind spots in travel, expense, and invoice spend, allowing cost-saving opportunities to fall through the cracks.
Fortunately, there are tools that can help improve spend visibility, such as Glean AI. Glean AI’s platform drills down into specific line items to compare spending from month to month, see which line items have changed, and even understand if other customers are paying less for a certain item. This immediate insight can help speed up the decision-making process.
Today, only two in 10 companies use dashboards to track vendor costs. Tracking and reporting costs on multiple spreadsheets, documents, and platforms makes it incredibly difficult for financial decision-makers to get the data — and context — they need. Finance leaders must be able to access all the information they need, as well as the context surrounding each bill, to spot trends, and uncover savings.
Many companies track what drives revenue, but when it comes to company spending, the picture gets opaque. Glean AI takes data from complex, confusing spreadsheets and centralizes it in one dashboard. We even extend your reporting capability by analyzing data to produce relevant, non-intuitive insights on every bill that we call “gleans.”
This advanced degree of reporting empowers Finance teams to focus on strategic work that moves the business forward.
It’s estimated that 15% of vendor invoices contain errors. Manually finding and correcting these errors is a time and labor-intensive process, and still does not guarantee that all errors have been rooted out. Finance leaders who are making decisions need the most accurate data possible. Bad data can lead to poor decisions at worst, and at best slow down the decision-making process.
Implementing an intelligent AP platform can reduce the risk of error, creating a win-win for financial management leaders and AP teams processing invoices. Decision-makers can feel confident they’re getting the most accurate picture of their vendor spend and actionable insights to understand exactly what to do with it. AP teams can improve productivity, reduce the risk of double invoicing, and save time.
When new businesses fail, it’s due to cash flow issues; 82% of startups struggle with cash flow projections. One way to improve your financial decision-making is to have control over your burn rate, optimizing your spending to secure long-term business growth.
Burn rate describes how quickly a startup is spending its initial investment (e.g., venture capital) to finance overhead before generating positive cash flow. Part of optimizing burn rate is determining which projects and initiatives are worth pursuing—and which should take a backseat.
[Read more: Burn Rate: Understanding What it Means for Startup Businesses]
Making these financial decisions requires knowing you’re not spending more money on vendors than is necessary and keeping more budget for what matters. This information can easily be derived by tapping into trends in Glean AI’s centralized dashboard. Optimizing your burn rate with this information can prevent overspending in one business area that may not be serving your ultimate growth objectives.
Financial decision-making requires the right data at your fingertips, with the assurance that the information you receive is accurate and up-to-date. Real-time, centralized data from Glean AI puts the power of financial management decisions in one streamlined platform, designed to help businesses grow profitably.
To learn more about financial decision-making and how Glean AI can help, request a demo, today.