Spend management software is the budget holder's record of money leaving against money planned: every commitment against its budget line, every actual against its commitment, and the variance and run rate worked from the two. What is spend management, asked by a finance lead rolling three departments into one figure, is that record kept current; a spend management platform, a spend management system and spend management solutions are the same record sold at three sizes. This page is about what the record must keep for a small business, and the free departmental roll-up sheet on this site works the variance and the full-year run rate from the budget holder's own numbers with no account.
Commitments before actuals
A purchase order is money committed before it is money spent, and a budget line that shows only actuals is a month behind the truth. Spend management software keeps the commitment against the line the day it is raised, so the line's remaining figure is budget less commitments less actuals, not budget less invoices.
The variance and the run rate
Year-to-date budget against year-to-date actual is the variance per department and rolled up; actual over the months elapsed times twelve is the run rate, and the run rate against the annual budget is the full-year overrun. The departmental roll-up sheet on this site works both: $10,000 overspent at month six and a $20,000 full-year overrun at the run rate on the worked example.
What a small business needs from the platform
Lines, commitments, actuals and approvals against a named budget holder, with an export. Spend management solutions sold with procurement workflow, supplier onboarding and card programs are buying the enterprise's problem; the budget holder's problem is the variance, and Opexvo Pro keeps the record that produces it at one flat price.
Questions people ask about spend management solutions
What is spend management?
Keeping every commitment and actual against the budget line it belongs to, so the variance and the run rate are lookups. The free roll-up sheet works both from the budget holder's own figures.
What must spend management software keep?
Budget lines, commitments, actuals and approvals against a named holder, with an export; the variance and run rate worked from them.
Is a spend management platform different from a spend management system?
Same record at different sizes; the budget holder's question is the variance either way.