AI-Driven Spend Analytics to Improve EBITDA

‍Combine advanced analytics and expert know-how to reduce non-optimal spending and improve internal spending policies.

Understanding Spend Leakage‍

Spend leakage refers to the use of company resources in a non-optimal fashion, often termed as "Tail Spend". It includes spending on employee purchases, reimbursements, and operational materials. Process Tempo provides a platform and plan to address this issue effectively.

What is Tail Spend?

Tail spend constitutes non-strategic expenditures made up of numerous transactions across various merchants. Managing this spending can be challenging due to its breadth and volume.

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Potential Savings

Estimates suggest spend leakage reduction can save 10% to 50% of total tail spend annually. Here’s what it could mean for different company sizes:

Small to Medium-Sized Company

Employees: 200-500
Annual Spend: $10M
Potential Savings: $500,000/year

Medium-Sized Company

Employees: 500-1000
Annual Spend: $50M
Potential Savings: $2.5M/year

Large Company

Employees: Over 1,000
Annual Spend: $200M
Potential Savings: $10M/year

Benefits of Spend Analytics

Reduce Wasteful Spending

Identify patterns to cut unnecessary costs.

Optimize Contract Spending

Enhance negotiation with accurate data.

Implement Smarter Policies

Develop data-driven policies.

Identify Spending Patterns

Understand spending trends across business units.

Address Spending Culture

Drive behavior change with data.

Identify Potential Fraud

Detect non-compliant activities

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Quick Wins with Spend Analytics

The Evaluation

‍Load spend data into Process Tempo to highlight exceptions and anomalies, providing metrics to adjust policies.

Types of analysis performed during the evaluation stage:

Changes in spending behavior turning certain times of the year. For example, an increase in spending during the holidays.
Patterns between employees and denied transactions
Patterns that repeat weekly. For example, supplies always purchased on a Monday.
Political donations

Policy Tuning

The next step in the journey is to begin to fix the root causes of non-conforming spend by reviewing existing policies to see if they still make sense. Policies can become stagnant over time and therefore do not always reflect what is in the organization's best interests.