Biotech finance teams have a lot on their plates right now — they are managing lab supply budgets while supporting their scientists in navigating ongoing supply chain disruptions, mitigating project risks, and developing financial projections. With so much to juggle at once, finance teams run the risk of basing their decisions on outdated or incomplete data, while being unsure of whether or not their teammates are operating off of the same data.
By integrating spend visibility practices into their workflows, biotech finance teams can ensure that they are making the most informed decisions at all times, and catch overspending or opportunities to save as soon as possible.
With access to modern lab technology and integrations between lab software and AP and finance systems, spend visibility is more achievable than it’s ever been. And, it’s saving fast-paced R&D teams time, helping to include scientists in budget discussions and improve accountability. Here’s how to add more awareness to lab spend and run a leaner lab.
Biotech Spend Visibility 101
Spend visibility is achieved when all parties have access to the same comprehensive and detailed system of financial records, often in real-time. It encapsulates the lifecycle of every dollar spent by the company, from the initial order placed all the way until the money for that order leaves the company’s bank account.
For biotech finance teams, spend visibility increases communication efficiency and creates a seamless supply procurement process. To get started, lab managers will need to research spend analytics solutions and procurement software before investing in the best tools for their specific lab and finance team.
What can spend visibility reveal in R&D labs?
- Excessive fees for last-minute supply orders
- Duplicate work and inefficient processes
- Unnecessary manual labor
- Top areas of overspending
- Costly lab equipment that can be replaced with rentals
- Safety issues that can be reduced by more training
Benefits of Biotech Spend Visibility for Finance Teams
Implementing spend visibility into your finance team workflows is an essential step toward complete lab automation. By centralizing shared, real-time data and maintaining a complete history of purchase records, biotech lab finance teams are able to make more informed and accurate financial decisions.
With 69% of companies agreeing that better strategic decisions were made when using real-time data, spend visibility is critical to biotechs spending hundreds of thousands to millions of dollars on lab supplies and equipment.
Here are just a few of the benefits of integrating spend visibility into your finance team workflows.
1. Spend Visibility Increases Finance Team Efficiency
The key to biotech finance team efficiency lies in how accurately data is gathered and processed, then how well teams are able to collaborate and review. By utilizing a shared spend management platform easily accessible across departments, finance teams can eliminate pre-existing inefficiencies caused by miscommunication or data mismanagement
2. Automation Leads to More Accurate Financial Data
One of the most straightforward ways to implement systems of spend visibility for your finance teams is by transitioning from manual to automated processes. Finance team automation — such as one-click approval systems and a centralized order tracking platform — allows all team members to consistently be operating off of the most up-to-date data, leading to more thorough and accurate financial reporting.
3. Make Smarter Financial Decisions with Comprehensive Spend Visibility
Spend visibility doesn’t just lead to making faster decisions, but also allows teams to make more strategic budgetary decisions. For example, access to laboratory-wide shared data allows finance teams to look at past budgetary patterns and future projections, as opposed to operating off of estimates and approximations. Or, looking at data too late or on an infrequent basis, missing opportunities to take action and prevent overspending in the moment.
Establishing Spend Visibility in 2022
Effective spend management has always been key to successful biotech labs, and in times of frequent supply chain disruptions and increased innovation demand, the need for cohesive spend management only increases.
To set yourself and your lab up for success in 2022 and beyond, begin the process of establishing systems of spend visibility at your lab by:
- Streamlining purchasing cycle times in anticipation of supply chain shortages
- Using a centralized procurement platform that details the lab’s complete order history
- Regularly practice vendor spend and performance analysis to determine if your current suppliers are the best fit for your procurement needs
- Build a visible spend management process to simplify indirect spend optimization
- Align scientists, lab managers, finance teams, and leadership towards common lab budget goals.
Over the past few years, biotech labs have learned how to overcome many obstacles. To continue the process of streamlining your finance team workflows, automating internal processes, and integrating the use of eProcurement tech at your lab, review the Biotech Lab Spend Control Checklist.