5 Spend Control Best Practices to Help You Scale Without Overspending

You’re the CFO of a rapidly growing mid-size company, and things are moving fast — new departments are emerging, and your employee ranks are expanding by the day. Everyone’s excited about the growth, but it comes with a serious challenge: your procurement process is starting to unravel.

One team is using company cards to subscribe to new software, while another is ordering supplies from a vendor nobody's heard of. Contract renewals are passing by unnoticed, and spending data is scattered across multiple systems and spreadsheets. While not a mission-critical problem yet, you can see the writing on the wall — missed deadlines, compliance breaches, and out-of-control spending are just around the corner.

If any part of this sounds familiar, now is the time to get acquainted with the concept of spend control.

What is spend control?

Every business says they want to get a handle on their spending, but actually doing so requires putting specific structures in place. Together, these structures are known as spend control — it’s a proactive approach that helps businesses align their spending with their broader goals. It provides a clear line of sight into how resources are being used, making sure every dollar spent directly supports the company’s objectives.

And it’s more important than ever — a study from SAP Concur and Wakefield Research revealed a 17% increase in claims with missing receipts, and a nearly 30% rise in spending for those claims in 2023. Despite these worrying trends, only half of organizations have a system in place that requires spending to be approved in advance.

As businesses grow, so does the complexity around managing expenditures. Spend control equips finance teams with tools to get their arms around this complexity and better manage resources across the board.

Why does it matter for businesses?

Spend control ensures that companies have the cash flow necessary to maintain existing operations and seize new opportunities as they arise. This is especially crucial for fast-growing companies — at this stage, it’s easy for overspending to creep in as expenditures get lost in the shuffle. What’s more concerning is that, without proper controls, you run the risk of wading into murky compliance territory and exposing your business to fraud.

When you can easily see how and where money is being spent, it becomes much easier to make more informed purchasing decisions, cut down on waste, and minimize compliance risks.

Spend control versus cost control

Spend control and cost control are often used interchangeably, but there are some important differences between the two.

• Cost control involves slashing expenses when an organization needs to save money, usually by cutting budgets or freezing purchases. While effective in the short term, it’s an inherently reactive solution that can deprive departments of critical resources needed to meet their long-term objectives.
• Spend control, on the other hand, takes a holistic, strategic approach. It’s about ensuring that resources are spent in a way that furthers company goals rather than cutting costs for the sake of it. Spend control spans the entire procurement processes, from initial purchase requests to managing contracts and renewals, ensuring that each decision is made with long-term value in mind.

Understanding the value of spend control is one thing, but the real impact comes from applying it well. Let’s take a look at some ways to make that happen.

5 best practices for effective spend control

Establishing effective spend control in your organization doesn’t require a monumental effort — implementing just a few impactful processes can make a world of difference. Here are five best practices that can help you regain control over your expenditures and ensure they’re being put to good use.

1. Establish one simple intake portal

One of the most impactful ways to bring clarity and control to your spending is by setting up a simple, intuitive intake portal. But its effectiveness hinges on one overarching principle: user-friendliness.

Even the best-intentioned procurement processes are destined to fail if they aren’t designed with the end user in mind. When workflows are overly complex, several things can go wrong:

• Mistakes inevitably happen
• People start finding ways to bypass the system altogether
• Procurement requests get lost in inboxes or delayed because of unclear procedures
• Unauthorized purchases go unchecked, exposing the company to budget overruns and compliance issues

To avoid these problems, the intake process needs to be intuitive, efficient, and user-friendly. The best way to do this? Centralizing intake into a single, easy-to-use portal. A good intake system gathers all necessary information upfront without overcomplicating the process. This means only asking for essential details — no more, no less — so that procurement requests can move quickly through the pipeline without getting bogged down by unnecessary complexity.

When your system is simple and user-friendly, employees are more likely to adhere to it, making it easier to manage requests right from the get-go. Tropic’s intake-to-procure workflow is built to do exactly that, helping organizations establish a more efficient procurement process. See it in action with a free demo today.

2. Automate workflows and approvals

A cumbersome approval process is a notorious procurement bottleneck. Workflows that run on top of outdated systems and manual inputs are prone to frequent delays and human error. Teams are left waiting for approvals, causing frustration as critical decisions get stalled and operations come to a standstill. In fact, a recent report from Payhawk found that nearly a third of companies cite “human error” and “time wasted on reconciliation” as top spend management challenges.

It shouldn’t be a surprise that, when approvals drag on for weeks or months, teams resort to sidestepping the process altogether. When that happens, you’re left with shadow spending and a host of avoidable issues.

Automation changes all of that. When workflows are automated,

• Procurement requests move through the funnel faster without the need for constant follow-ups
• It takes the guesswork out of the process — automatic notifications keep everyone in the loop and prevent approvals from getting stuck in someone’s inbox
• Because requests are routed to the appropriate approvers in real time, there’s no more waiting around or unnecessary back-and-forth

Plus, since automation tools streamline communications between departments, everyone knows exactly where a request stands and what needs to happen next at any given moment. Employees no longer have to chase down approvers to keep things moving.

Beyond reducing frustration, automation also brings significant savings. The Hackett Group found that organizations that implement digital transformation efforts like procurement automation can reduce process costs by 30%.

3. Centralize contract management

Top-line growth is objectively a good thing, but it tends to come with some not-so-good things — like added supplier complexity. What may start as a handful of easily manageable contracts in the startup phase quickly snowballs as the company grows, making manual tracking unsustainable. As contracts start to multiply, having a centralized system becomes less of a convenience and more of a necessity.

When contracts are scattered across different systems — or worse, buried in email chains — it’s almost impossible to keep track of them all. This disorganization can lead to:

• Missed renewal deadlines, resulting in unplanned costs or service interruptions
• Overspending due to unmonitored contract terms and missed opportunities for renegotiation
• Added stress on procurement staff, who must scramble to locate information during critical moments like negotiations

A survey from DocuSign puts this challenge into perspective: 68% of teams “need to access completed contracts at least weekly,” yet on average, “it takes 30 hours of staff time to generate, negotiate and locate a contract.” That’s hundreds of hours per year that procurement could be spending on more value-adding work.

The fix? A centralized contract repository. When all of your contracts are housed in one secure, searchable location, you’re able to:

• Access necessary documents quickly, ensuring no renewal slips through the cracks
• Monitor supplier agreements proactively to avoid surprise costs
• Focus on maximizing supplier value rather than constantly putting out fires

4. Implement proactive renewal management

No one enjoys the unpleasant surprise of an unexpected auto-renewal, especially when it locks you into services you no longer need at prices you didn’t anticipate. It’s a helpless feeling knowing that, with just a bit more time, you could have renegotiated terms or explored better options.

Proactive renewal management changes that dynamic, putting your team in the driver’s seat rather than at the mercy of supplier deadlines. Along with preventing auto-renewal surprises, it promises:

• Increased leverage for pricing and terms: Starting the renewal conversation early — at least 90 days in advance — can lead to massive savings compared to waiting until the last minute. During this time, you can also analyze market benchmarks and use that data to negotiate more favorable terms. 
• Cost savings and better vendor relationships: Having visibility into upcoming renewals gives you the leverage to secure better pricing and terms. Companies that adopt this proactive approach tend to see substantial cost savings and build stronger relationships with key vendors.
• Organized renewal tracking: A good renewal management system keeps everything organized and easily accessible. No more digging through emails or spreadsheets to track down contracts or expiration dates. With all your contracts and deadlines at your fingertips, planning ahead becomes simple. Automated reminders ensure that you never miss a chance to renegotiate or cancel services before they automatically renew.

Tropic’s renewal calendar promises all these benefits and more. It doesn’t just track deadlines — it gives you full visibility into your universe of contracts and sends automatic notifications via Slack or email well ahead of time. With a single click, you can start the renewal review process, routing it to the right stakeholders for approval. And with Tropic’s Supplier Intelligence feature, you gain access to real-time pricing data from over 40,000 SaaS contracts, giving you the upper hand when it’s time to negotiate.

Tropic takes the hassle out of renewal management, turning it into a strategic advantage that maximizes the value of every contract. Try a free demo today and see the savings potential for yourself.

5. Streamline your reporting and analytics

Data is only as valuable as the insights it provides. Most modern businesses have plenty of data at their disposal; where they struggle is making sense of it. Information that’s spread across various systems and spreadsheets makes doing so exceedingly difficult. When this is the case, visibility into spend data is cloudy at best, making it nearly impossible to forecast future expenses and stay within budgetary bounds.

The power of real-time insights can’t be overstated here. In fact, McKinsey found that top-performing procurement organizations have data and analytics capabilities that score “at least 40% higher” than their peers.

A strong reporting and analytics competency allows you to:

• Spend less time wrangling data: A single, centralized source of truth eliminates the frustration of chasing down fragmented information. Instead, you have everything you need in one place, giving you more time to focus on strategy rather than troubleshooting.
• Improve decision-making: Knowing exactly where your money is going, what’s working, and what isn’t at any given moment allows you to pinpoint where improvements can be made.
• Leverage customizable dashboards: Customizable dashboards help you zero in on the metrics that matter most to your business goals. Being able to slice and dice your spend by different categories, track supplier performance, and spot trends that might have otherwise gone unnoticed gives you a whole new level of insight and control.
• Shift from reactive to proactive: With streamlined reporting and spend analytics tools, your team is empowered to move beyond reactive decision-making and start taking a proactive approach to procurement management. Whether it's identifying areas of waste or spotting opportunities for renegotiation, you can be sure that every dollar is being used effectively.

Unlock insights at a glance with Tropic’s intuitive reporting and analytics features. Gain real-time visibility through automated reports and customizable dashboards — all designed to help you pinpoint opportunities to eliminate waste.

Effective spend control starts with a unified approach

As your business grows, the complexity of procurement processes, approvals, and contract management will naturally increase — but that doesn’t mean it has to spiral into chaos.

Managing your company’s spend doesn’t have to be a constant uphill battle. Through the strategies we outlined, you can regain control and set up processes that scale alongside your organization. And with the right platform to support these efforts, staying on top of spend becomes less about firefighting and more about making progress towards your strategic goals.

Tropic’s all-in-one solution makes spend control effortless and effective. Ready to see the difference? Watch a free 5-minute demo today and discover how Tropic can help you scale with confidence.