The notion that “you have to spend money to make money” has stood the test of time and – according to Pleo research, it's a saying 77% of business decision-makers agree with.

But the key qualifier that's missing from this statement is the word “smart”. And, as we’ll come to explore, this is the difference between surviving and thriving in the decade to come.

What does smart spending really look like?

Smart spending used to mean not spending more than you have. But in today's complex business landscape the notion of smart spending is more nuanced.

Today’s finances are about much more than ins and outs. Businesses need to do everything from turn minor investments into big pay-offs, make excess cash work harder, and help stay ahead of the competition.

For finance teams, this means they’re expected to understand the value of impact before anyone else does – seeing the entire lifecycle and variables of all decisions, including the risks and the rewards.

As Pleo marks its 10th anniversary, I’ve thought about the journey smart spending has been on – and where it’s yet to go. To that end, below I unpack my predictions for what I expect will reshape the business finance landscape and how CFOs can be prepared.

How smart spending will evolve in the next 10 years

It’s not possible to predict exactly what will happen in the next 10 years. But it’s the everyday uncertainties that businesses face which pave the road to strategic success. The power of teams lies in how agile they are to the unexpected and how predictive they are of the uncertain.

A faster adjustment of spend

Business context is changing faster than ever. In the past five years – never mind 10 – businesses have had to contend with Covid, inflation, and trade wars. This has underlined the need for them to develop a faster adjustment of spend.

Trying to guess the front pages tomorrow is a tall order, never mind next week, month, or year. But what businesses can do is fine-tune their adjustment of spend. This requires them to empower the financial decision-makers within their business – not only to make decisions, but to become change-makers (those capable of accelerating the business through positive impact). Reactive suddenly becomes proactive and spending decisions are made quicker and with greater confidence.

Technological innovation – backed by human evolution

New technologies have transformed the workplace. AI and automation in particular have ushered in increased opportunities for spend management through real-time spend visibility which has in turn led to better delegation and optimisation. Now businesses need to seize the moment and develop how proactive their spending is. More than ever before, financial decision-makers are under pressure, with decision-freeze a serious problem for those overloaded with different responsibilities and tools.

Smart spending requires minds to be free to make decisions and confident to take informed risks. This will never happen with hours of manual work. Meaning technology has a role to play in streamlining workdays and workloads. But remember that there is such a thing as digital overload, and integration must be a North Star when choosing to innovate with different platforms, so that friction is removed, not added.

Top of mind should also be having the right foundation to scale and evolve alongside new technologies. It’s essential that businesses today are utilising the data they have, but to do this they must ensure they are able to gather, organise, and interpret it correctly. What’s more, AI is only going to accelerate. It might not feel like it, but right now we are at the beginning of the AI era, so readiness is vital and tech stacks should be built for tomorrow, not just today.  

Profitable partnerships across the business

While some businesses will prioritise partnering with external companies and stakeholders, they mustn’t forget the value of partnerships within their business too. There is an expectation for finance to be the engine room of the entire business. But for this to work, the function must understand, communicate and collaborate with the entire business.

Business finance partnering is more important than ever to navigate the decade ahead, and to ensure the best return on spend and fast, high quality decision-making. Finance teams must become strategic advisors to their own departments, other departments and leadership to ensure that smart spending doesn’t happen in isolation.

This means doing away with the notion that CFOs must fight it out with CPeOs or CMOs and that departments are in a scrap for budget. Common ground is where the smartest spending decisions will be made, and it is the job of decision-makers to find it. This is how commercial acumen can develop within teams, and how accurate measurement of spend and accountability can spread business-wide.

Smart spending requires you to keep learning

The best smart spending strategies never stop evolving. This is because the world around us is moving at pace and financial teams must ensure they’re set up to do the same.

Smart spending will be defined by how informed and proactive teams are before a single penny is spent. This means establishing oversight of cash flow and finance through new technologies, but also setting ground rules for collaboration and communication.

Those that do will find it to be a strategy that doesn’t just deliver smart spending decisions in the moment, but on an ongoing basis. And the smartest thing about this approach? That it scales with you, your business, and your ambitions.

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