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'''Spend management''' is the way in which companies control and optimize the money they spend. It involves cutting operating and other costs associated with doing business. These costs typically show up as "operating costs" or SG&A (Selling, General and Administrative) costs, but can also be found in other areas and in other members of the supply chain.

Whether it is the money spent on goods or services for direct inputs (raw goods and materials used in the manufacture of products), indirect material (office supplies and other expenses that do not go into a finished product), or services (temporary and contract labor, print services, etc.), a company needs a mechanism by which they are not only able to save money but also control costs.

Spend Management is meant to represent a holistic view of the activities involved in the "source-to-settle" process. This process includes spend analysis, sourcing, procurement, receiving, payment settlement and management of accounts payable and general ledger accounts.

In an enterprise, spend management is managing how to spend money to best effect in order to build products and services. The term is intended to encompass such processes as outsourcing, procurement, [[e-procurement]], and supply chain management. Since the "spend manager" could have a significant impact on a company's results, it has been advocated that this manager have a senior voice in running the company.

== Cost reduction vs. revenue generation ==

Companies divide money into two major buckets - [[revenue]] and [[cost]]. In hard economic times, when revenue is harder to come by, companies often turn to [[cost cuttingreduction]] initiatives. Cost cutting will increase [[net income]]. An increase in net income leads to a greater earnings per share and ultimately a higher market value (higher market capitalization).

Because cost cutting affects a company's bottom line directly, certain types of cost cutting can be the quickest way companies can increase their [[market value]]. The typical consensus is that the revenue to cost ratio is about 3 to 1<ref>Citation Required</ref>; for instance, increasing revenue by $300 has about the same effect as cutting costs by $100.

This is why, in hard times, companies typically turn to cost-cutting measures such as [[layoff]]s and [[product quality]] reductions. However, most analysts agree that this short-term [[tactic]] creates little long-term value, nor any long-term [[sustainable  ]] [[savings]]. This is why "Spend Management" has become a key long-term strategy for companies seeking to maintain long-term and sustainable value.

== Spend management systems ==

(contracted; show full)==References==
{{Reflist}}

[[Category:Management accounting]]
[[Category:Procurement]]
[[Category:Supply chain management]]

[[sk:Riadenie výdavkov]]