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Budget management is complex and highly specific to each organization, but one thing rings true across industries: being proactive with budget management reduces operational interruption by keeping an organization¡¯s cashflow adaptable to change. But how is it done?

What Are Budgetary Control Techniques?

1.?Keep expense data handy

Our experts always recommend keeping your Expense Category Summary data handy to maintain bumpers for your budget and stay on track. Once you have your data ready, it¡¯s easier to compare your organization¡¯s key performance metrics (KPIs) to peers in the industry, use benchmarks, and assess your spend management. That way you¡¯re ready to adjust spending as needed while also building out a plan for the next budgeting season.

2.?Educate and train employees

Although control of employee discretionary spend ¨C items such as home office expenses, mileage, meals, or seminar registration ¨C certainly has changed, you can regain control over expenses with clear education on how to categorize expense types and promote the best practices to an efficient approval process. Spending can stay within existing budget allocations or be adjusted with minor interruption to business operations.

Setting Goals for a Healthy Budget

Here are some recommendations on how to maintain a healthy budget to stay agile and resilient in the years to come:

1. Verify spending is aligned with your budget

Comparing expense category spend to budget allocation may uncover challenges in spend management. When you compare a report of your expense types year over year (YoY), it¡¯s easy to identify the highest spend categories ¨C that is, if your team is accurately reporting them! Educating employees and using audit rules on expense policy spend categories are fundamental to effectively managing spend against budget ¨C both in the short and long term. When employees submit properly categorized expense reports the first time, managers can verify the expense or invoice they are approving aligns with their operating budget and that the correct categories are reported. This accuracy, in turn, will illuminate trends and cashflow status.

2. Maximize the value of a single platform

While allowing employees a certain level of autonomy is valuable, providing them with multiple options to report expenses can cloud your visibility, particularly when an emergency occurs and there is a temporary gap in the utilization of expense reporting. According to a of 500 finance leaders from businesses of all sizes, ¡°75% of finance leaders say their business often exceeds expense, travel, and invoice budgets. And even more agree that their expense, travel, and invoice systems need to be better connected for a single view of spend.¡± Maximizing the use of a single platform keeps both the process and the data as clean as possible.

3. Ensure the alignment of spending and goals

Once you understand the YoY total spending of your organization, you¡¯ll be able to identify trends over time. This helps you build a budget and plan that everyone can stick to. Equipping decision-makers on your team with accurate expense type data will empower them to make the right choices for your organization¡¯s successful budget management and overall operational performance.

US Benchmarks for Spending by Expense Category

Once you have leveraged our tips, we recommend regularly running a report of your Spend by Expense Category. You¡¯ll be better able to spot and reduce budget overages through this level of granularity. Let¡¯s see how you compare this year:

Best Practices to Keep Spend on Track

After comparing your expense categories to those of other SAP »ÆÉ«¶ÌÊÓƵ customers, here are some best practices to keep your organization¡¯s T&E program aligned with your budget:

1. Submit expenses in the time period in which they occurred
2. Observe real-time spend to budget access
3. Control spending before it occurs with pre-approval
4. Integrate travel program to expense tool, and reduce ¡°invisible¡± spend
5. Allocate P-Card spend as soon as it occurs
6. Maximize corporate card use
7. Distribute Actual vs Budget Spend reports to department managers on a weekly cadence
8. Automate mileage expense submission

Better Manage Budget with These Resources

• Use our handy spend management assessment tool to determine how your systems measure up and learn what you can do to take your processes to the next level.
• Listen to this podcast to learn the basics of zero-based budgeting, and how to combat the Great Resignation, harness the power of spending technology, and disambiguate the financial priorities for your organization today.
• Read this whitepaper: What does a healthy financial process look like? We asked some SAP »ÆÉ«¶ÌÊÓƵ and Deloitte experts to weigh in and share their insights.
• See how Budget by SAP »ÆÉ«¶ÌÊÓƵ works.