Spend Analysis with NetSuite

#SpendAnalysis is a process of collecting all current and historical data from all acquiring sources and systems, followed by cleansing and categorizing the data to understand purchasing trends and identify saving opportunities.?

Spend analysis data include;

• Data of expense management systems.
• Procurement software data
• Payroll software data
• Bank and credit card accounts.
• Industry benchmarking information.

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It is helpful for sourcing professionals, management, and budget owners.

Spending data is distributed across several systems throughout different departments and industrial units.

Spend analysis confines this data, so companies can better understand key spending areas and trends.

Traditionally, extensive organization-wide spend analysis was often a labor-intensive process, including multiple manual steps to extract data from different sources, then analyze and present it.

?Nowadays it's possible to complete this task more quickly!

All because of advanced analytics tools and ERPs suites like NetSuite ERP that manage data from across the organizations.

Why Spend Analysis?

Once the company’s service provider and the cost of the service are revealed as a consequence, spend analysis lower procurement costs of goods and services.

It allows companies to track key spending metrics and provides a standard for measuring the impact of new strategies and efforts to reduce spending.

Now companies can focus on areas where they can reduce costs and improve profitability.?

Spend Analysis in 4 Simple Steps

1. Specifying key objectives like finding saving opportunities, monitoring purchasing trends, or identifying strategic vendors.
2. Identifying relevant data sources
3. Clean and convert it to a standard format.
4. At last, organizational analysis and visualization of the data using business intelligence or reporting tools.

Sources of Spend Analysis Data

• Accounting systems.
• Enterprise resource planning (ERP) systems.
• Expense management systems.
• Procurement software.
• Payroll software.
• Bank and credit card accounts.
• Industry benchmarking information.

Spending can be categorized into two “Direct Spend” and “Indirect spend”

1. Direct Spend refers to goods and services connected directly with making products.

It includes raw materials, machinery, direct labor costs, production services, and shipping costs.

1. Indirect Spend refers to goods and services not directly related to #production but still able to maintain and develop an organization’s operations. It includes accounting and legal services, travel and lodging, maintenance and utilities for administrative facilities, and human resources.

Benefits of Spend Analysis

1. Improves the visibility of your business’s finances.
2. Reduces costs and unnecessary spending
3. Identifies Inefficiencies
4. Helps improve value
5. Improves vendor compliance
6. Improves administration
7. Mitigates risks
8. Repeatability

How to do spend analysis?

1. Define your Objective

The goal is to find money-saving methods, establish standards for the future, monitor trends, and identify strategic vendors.

1. Recognize Information Sources

Take a comprehensive approach to identifying every source of spending data.

1. Combine Spend Data

Pull data together in a single database.

1. Clean and Organize Data

Examine data and correct faults in transactions and their description.

1. Link Spend Data to Related Supplier

It reveals an accurate picture of the total no. of suppliers and business conducted with each of them?

1. Categorize Spending

It allows you to classify spending using a standard classification system like UNSPSC or ECLASS or a company-specific classification.

1. Analyze Spend Data

Besides monitoring spending by category, department, and function, you could track the percentage of spending that is directed to your preferred suppliers and the percentage of maverick spending.?

1. Repeat the Process

Regularly update the data to make sure that everyone is sticking to contract terms, working with preferred suppliers and recognizing savings opportunities.?

Bringing It All Together

Organizations may monitor and manage spending with the aid of #NetSuite cloud #accountingsoftware, which offers real-time visibility into financial data from all areas of the firm.?

#NetSuiteCloud accounting software saves financial teams time each month by automating repetitive tasks and eliminating the need to collect and normalize data from various departments. This frees up their time to review transaction details, look into anomalies, and spot trends. Financial teams can monitor and enhance progress toward spending goals by using the extensive reporting tools and real-time dashboards offered in #ERPSystem

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