The 3 phases of effective spend management 

Many businesses think spend management begins and ends with reconciliation. They assume they have the control they need if every transaction is accounted for at month-end. 

The truth is that good spend management isn’t just about control. It’s about bending to the unpredictability of business spending without breaking. It’s about not letting unexpected expenses derail budgets or slow down essential operations. 

It’s about deciding where your money can (or can’t) go before anyone makes a single transaction. Making it easier for employees to spend money when they need to (and they often need to). And, finally, of course, giving your business the ability to recoup and re-evaluate whether those spending decisions were smart enough to repeat (or repair).  

In this series, we’ve helped you identify whether your spend management software is working and explored the benefits that you can expect from investing in a new process. Now, we’re taking a step further.  

We’ll explore what the right spend management process fixes for businesses looking to get more order, agility, and efficiency into how you manage business expenses.  

But before that, let’s talk about the building blocks of good spend management. 

Good spend management happens in phases 

Pre-spend 

The spend governance phase is the stage at which you determine who can spend, on what, and when.  

It’s you – and your team – proactively deciding what your business is prioritising in terms of spend. Your hygiene rules. The decisions made at this stage are usually formally recorded into an expense policy, which will cover what purchases are allowed, who needs approval, and how spending should be tracked. 

Why is spend governance worth your attention? Because rules aren’t just good for your finance team who needs visibility and control without slowing the business down. It gives your whole business clarity.  

For example: The marketing manager wants to spend £5,000 on an industry event sponsorship. With a clear expense policy, they can determine whether the expense falls in line with the organisation’s larger strategic objectives. Just knowing that, will change how they plan, justify, and track their spending. 

Spend 

So, you’ve set the rules. Now, how do you enforce those rules while employees are out spending on behalf of the business?  

Some finance teams issue corporate cards or set up a reimbursement process.  

Whichever process you choose, make sure to account for:  

• Agility: Covering last-minute opportunities, impending fires 
• Order: Knowing that you can track who’s spending what 
• Efficiency: Giving employees access to immediate or near-immediate access to money they need to get their jobs done. 

Post-spend 

This is the phase most businesses think of when they think of spend management. It’s no wonder because the tasks are a heavy lift. There’s: capturing, classifying, and validating expenses so that your financial records stay accurate and compliant.    

But now that you’ve set specific governance in place and monitored spend as and when it happened, reconciliation and reporting become about better decision-making.  

It isn’t just about looking backwards. It’s about using data to improve future spending. 

With real-time tracking and automation in place, you spend more time analysing trends and optimising budgets. 

Bridging every step of your spend management process 

Spend management is the most effective when every phase happens simultaneously.  

When decisions made during your pre-spend phase feed into how spending is monitored and controlled in your spend phase. When your post-spend phase decisions are based on timely insights from your real-time tracking phase. 

That’s what spend management software providers (like us) mean when we describe their products are “end-to-end”. The benefit is more visibility. And more visibility = more control.  

So, how do you bridge the gaps between the three phases?  

• Use software to automatically match receipts with transactions, reducing manual effort and ensuring accuracy 
• Set up clear approval workflows that ensure compliance and streamline authorisation 
• Automate policy enforcement and approval workflows  
• Track spending in real-time 
• Issue virtual or physical cards with preset limits and category restrictions to prevent overspending 
• Connect your spend management tool with your accounting system for real-time financial reporting 
• Alert employees and managers when spending thresholds are reached, or when policy violations occur 
• Use apps that allow employees to submit expenses, track spending, and capture receipts from anywhere 
• Use analytics to identify trends in spending and uncover opportunities for cost-saving. 

Effective spend management goes beyond simply tracking transactions. It’s about creating a process that works seamlessly from start to finish. By bridging your pre-spend, spend, and post-spend phases and using the tech that gives you more visibility and control, you’ll have everything you need to make smarter decisions.