What’s the difference between general spend management and SaaS spend management. And why you may need both.

In the intricate financial landscape of a business, akin to the serene complexity of a fjord, general spends form the broad waters, while SaaS spending navigates through like a carefully steered boat. Understanding how these two financial tools differ yet work together is essential for any business looking to optimize its journey toward growth and stability.

General spend management: the broad overview

General spend management refers to the process of tracking and controlling the overall expenditures of a business. It encompasses all types of spending — from office supplies and utilities to employee travel and entertainment expenses. This broad category is designed to ensure that all outflows of cash are accounted for, budgeted, and aligned with the company’s financial objectives.

The primary objective of general spend management is to give employees the autonomy to make necessary businesses expenses, such as food for business lunch or travel, while ensuring these expenses align with the company’s broader financial goals and contribute effectively to its success.

The core function of solutions such as Pleo and Spendesk is to give employees the autonomy to make necessary purchases, from lunchtime meals to daily public transport, integrating everyday expenditures into the broader financial system. Tools for general spend management often include budgeting software, expense tracking systems, and procurement solutions that help businesses negotiate better deals with suppliers and manage purchase orders more efficiently.

SaaS spend management: the specialized focus

SaaS spend management is lazer-focused on the costs associated with SaaS (Software-as-a-Service) products. As businesses increasingly rely on various SaaS solutions for everything from customer relationship management (CRM) to data analytics, managing these recurring costs has become a field of its own.

SaaS spend management platforms, like Cardboard, offer a more nuanced approach to managing these specific expenses. They track all your subscriptions in one place, streamline payment approvals, team management, budget tracking for SaaS, automating accounting, and often provide analytics on SaaS spends for your business. With SaaS becoming a significant part of operational costs, dedicated tools for SaaS spend management are no longer a luxury but a necessity for businesses seeking financial efficiency.

The intersection of general and SaaS spend management

While general and SaaS spend management serve different purposes, they intersect in that they both aim to track and optimize spends. General spend management gives you a macro view of where your money is going, while SaaS spend management drills down into the specifics of your software subscriptions — a growing and significant area of spend due to the digital transformation of business processes.

Why you may need both

You may wonder why a business can’t just use general spend management tools for everything, including SaaS. Some tools may even offer you the ability to have an overview of your subscriptions, however, they don’t solve for the challenges posed by SaaS management. The reason is that SaaS spending has unique characteristics that require specialized attention. SaaS subscriptions are typically recurring, can often be modified or canceled at any time, and may have usage-based pricing models. Additionally, it’s crucial for these subscriptions to be paid through company channels rather than through employees’ personal cards to avoid disruptions in service when employees depart the organization. These factors make SaaS spend more dynamic and potentially more challenging to track and manage than traditional fixed expenses.

Moreover, SaaS tools are often purchased by individual departments or even individual employees without centralized oversight, leading to potential redundancies and unoptimized spending. Unless you’re big company that can pay by invoices (even then not all subscriptions are organized in one place), most businesses pay for SaaS through their personal or company credit cards, which can create security and operational risks for the business. A specialized SaaS spend management platform like Cardboard can provide the visibility and control needed to manage these expenses effectively. It can prevent duplicate purchases, streamline payment through secure virtual cards, automate receipt collection, and smoothen the accounting process at the end of the month.

The benefits of using both

Using both general spend management and SaaS spend management allows companies to reap several benefits:

1. Enhanced visibility: While general spend management offers a general view of expenses, adding SaaS spend management gives you granular insights into your software costs, which subscriptions you have, who owns them and how costs are trending, enabling more informed decision-making about your SaaS spends.
2. Cost savings: By identifying and eliminating duplicate or underutilized SaaS subscriptions, businesses can significantly reduce unnecessary expenses.
3. Budget optimization: With better data on SaaS usage and needs, companies can allocate their budgets more effectively, investing in SaaS tools that offer the best ROI.
4. Automated accounting: Dedicated SaaS management platforms can assist with automating subscription receipt collection, so you or your accountant doesn’t have to chase employees every month to collect receipts.

Integrating Cardboard into your financial strategy

Incorporating a platform like Cardboard into your financial strategy allows you to address the complexities of SaaS spend without losing sight of the broader financial picture. Cardboard ensures you have a detailed and manageable view of your recurring SaaS expenditures. It provides a dashboard for complete visibility into your company’s subscriptions, usage tracking, spending trends, and critical alerts, all while enhancing operational security and control.

Synergizing spend management tools

Combining general spend management with SaaS spend management lets you harness the full power of your financial insights. General spend management provides an overall view of a company’s expenditures, SaaS spend management dives deep into the world of softwares and subscriptions. In the current digital age, leveraging both types of spend management is not only beneficial but essential for businesses to maintain a competitive edge. By using platforms like Cardboard for SaaS spend management, companies can ensure that their investment in digital tools is rational, optimized, and aligned with their broader financial goals.

Equipped with both types of tools, you’re not merely reacting to financial challenges, you’re charting a proactive course. In the realm of business, this foresight sets you apart — like a skilled sailor navigating a boat through the expansive fjords, discerning the clear path from the treacherous one.