Effective business spend management is not just a practice for law firms, it is a vital strategy that can set the stage for success. In this dynamic landscape, the concept of business spend management emerges as a guiding light, illuminating the path toward optimal financial health and strategic growth.
Imagine a realm where law firms effortlessly navigate their financial landscape — making informed decisions, streamlining expenses, and maintaining a competitive edge in the market. This vision can become a reality through the implementation of robust business spend management practices.
What is Business Spend Management (BSM)?
In short, business spend management is defined as a collection of processes, systems, and strategies used by businesses to monitor, analyze, manage, and optimize business costs and corporate spending. It serves as the compass guiding business towards maximum profitability while reducing costs, minimizing risks, and maintaining positive relationships with vendors and service providers.
Business Spend Management versus Expense Management
While the terms “business spend management” and “expense management” might sound alike, they’re not the same. However, both are somewhat correlated. Business spend management encompasses a comprehensive financial concept, dealing with how, when, and why a company spends its money. Whereas, expense management is a bookkeeping system for controlling, tracking, and processing employee expenses. For example, if someone on the team paid for work-related expenses out of pocket, a good expense management system makes sure they’re reimbursed properly.
Best Practices for Maintaining Good Business Spend Management
Implementing a business spend management strategy can be done through various approaches, such as leveraging legal technology to monitor expenses, generating reports regularly, and diligently documenting the entire process.
Monitor time and expense in real-time
Many law firms are now leveraging legal technology’s capabilities to efficiently monitor financial transactions. With solutions like time and expense tracking, law firms can stay on top of their financial data in real-time, allowing you to record all billable hours and expenses, leaving no room for oversight. Whether you prefer hourly rates or a different approach, you can easily customize billing to match each case and client, making it easier for you to manage spending and stay on top of all finances.
Generate spending reports regularly
Generating spending reports on a regular basis brings transparency to your business spending. This practice encourages open communication across different teammates in the law firm to help address any discrepancies, errors and refines your business spending strategy as needed. Law firms can leverage the reporting capabilities in to create custom detailed reports such as financial, time, and expense reports to uncover spending pitfalls and make informed financial decisions for the future.
Moreover, law firms can also apply filters in detailed reports such as individual attorneys, cases, time spans, and more, to examine financial reports across various levels.
Keep a Detailed Record
Maintaining thorough documentation of your firm’s spending process enables you to effectively track all expenses. This practice ensures that you have a clear and organized record of every financial transaction, enhancing your ability to manage and analyze expenses. Law firms can seamlessly store their financial reports in a contact and matter management system. Each expense record automatically syncs with the relevant contact or case, making it easy to keep a sustainable record-keeping practice.
Stay on Track of Your Spending and Expenses with Business Spend Management
Business spend management for law firms is more than just a necessity today, it’s imperative. The efficient management of your business spending will not only nurture financial health but also foster growth, ultimately contributing to your firm’s success. By implementing these best practices you are on the way to sustainable financial well-being and expansion that fuels your firm’s accomplishments. Don’t spend any more expense on ineffective strategies, and start implementing a business spend management system to gain a clear view of your firm’s financial landscape.
Rene Cheng, Sr. Product Marketing Specialist authored this article.