What is business spend management (BSM)?

BSM is the strategic process of managing, controlling, and optimizing a company’s expenditures across all business operations.

Business spend management (BSM) refers to the processes, tools and strategies companies use to manage, track and optimise their spending.

From expense management and invoicing to procurement and supplier management, the purpose of BSM is to gain visibility and control over all types of expenditures.

BSM is about tracking, analysing and automating a company’s spending patterns and processes to reduce risk, improve profitability and boost operational efficiency. It’s all about ensuring businesses allocate their resources efficiently while maximising savings – without compromising on compliance.

The term ‘business spend management’ is often used interchangeably with ‘expense management’. In reality, however, expense management is a subcategory of business spend management which covers things like out-of-pocket expenses and travel expenses.

Business spend management covers those and many other areas, including:

Product development

Sourcing

Procurement

Supplier management

Inventory management

Invoicing

Office supplies

Software

Marketing

Cash management

In short, BSM covers all company spending – both direct and indirect costs.

No matter the size of your business, it’s always important to stay on top of your finances. That’s exactly what business spend management is all about.

Business spend management (BSM) is all about boosting your operational efficiency and getting the most out of your savings.

In this article, we’ll cover what business spend management is. We’ll also give you 5 steps to implementing an effective business spend management strategy.

Key takeaways:

Business spend management (BSM) is about tracking, analysing and automating a company’s spending patterns and processes.
BSM helps you control costs, boost financial visibility, make data-driven decisions and much more.
To implement an effective BSM strategy, you should take stock of your spending, set clear goals, pick the right BSM tools for your business, automate repetitive processes and monitor and adjust your strategy as you go.