The Glean Blog

A penny saved is a penny earned. Really.

Written by Zach Negrin | January 7, 2022

Revenue matters, but so does spend.

 

There is a reason why people have been using this popular expression for over 350 years. It’s because it is true.

 

Let’s take a quick look at two scenarios: 


Scenario 1:

You own a paper supply business and want a prospective customer to commit to $10,000 of purchases.  You call them daily, you conduct Zoom calls, you send them snail mail, and you even visit them in person.  You spend a substantial amount of time and energy trying to convince them that your paper is the highest quality and most affordable on the market.  Finally after a lot of back and forth, they sign a purchase order and commit to the $10,000 purchase.  Hooray! 

 

Scenario 2:

One of your top suppliers for your paper business billed you for $100,000.  You analyze the details of their invoice and realize it included $10,000 of erroneous charges, and the correct amount owed is only $90,000. You pay them $90,000 instead of $100,000. Hooray!

 

Under both scenarios you have $10,000 more, but in scenario 2, you’ve invested significantly less time, energy, and resources.  Also, when you consider the paper in Scenario 1 may have cost $3,000 to manufacture, you’ve actually only netted $7,000.

 

But if Scenario 2 is more preferable, why is Scenario 1 the more exciting and celebrated option in most businesses today? 

 

Revenue matters, but so does spend

Revenue brings in customers which means cash-flow to the company’s operations, but spend management also positively affects cash-flow via savings that can fund growth and other important business initiatives. 

 

In many ways, Finance teams are the other half of Sales teams: one side brings in money, and the other side makes sure it’s invested wisely. 

 

It is time to start treating these two sides equally, ensuring that they are both given equal amounts of management attention and access to tools that enable them to do their jobs effectively. 

 

Arm your Finance team with the enablement tools they need

Sales teams are directly compensated, and widely celebrated, on performance. We believe in celebrating wise spending and proactive financial management with equal vigor. 

 

Both your Sales and Finance teams should have equal access to the best tools available in the market. A quick internet search brings up literally thousands of tools designed to train and motivate sales teams, while a similar search for financial tools? Not so much. 

 

This massive discrepancy is not an indication that financial analytics are less important than revenue generation. Rather, it is just another example of revenue generation being mistakenly prioritized over spend management. 

 

Don’t fall into this trap! Focusing only on ‘bright and shiny’ revenue generation means one less dollar of runway, one less dollar of future ownership dilution, one less dollar that can be spent on building your business.

 

"We're Growing, Don't Worry"

Perhaps you are in the high-growth stage of your business, therefore a focus on revenue is your only priority.  But even for high-growth companies, spend management is crucial. 

 

As any finance professional (without a working crystal ball) can attest, forecasted revenue is never a sure thing.  Having a real-time understanding and big-picture grasp of your business’s spend could prove vital in the case of an unexpected slowdown in revenue. Spend management does not replace revenue generation; it enhances it. 

 

Contact us to learn more  

Glean’s intelligent accounts payable solution ensures that your company’s spend is intentional, controlled, and as impactful to the bottom line as securing new revenue. Contact us today at hello@gleancompany.com to learn more about Glean or to see Glean in action.