Tracking your company’s spending often feels like being thrust back into 1995 (without the cartoon character ties and Rachel Green haircuts). It usually involves spreadsheets, paper receipts, reams of bank statements, plus a hefty dose of manual data input.
Aside from being prone to human error and a productivity black hole, it’s difficult to get an accurate snapshot of your company’s spending this way. And, without solid data, it’s harder to cut waste, budget accurately, and make informed big-picture decisions.
We looked at how tech can take the pain out of expense management and unlock valuable data in our recent webinar. Before you head off to watch the on-demand webinar, here’s a rundown of the current state of expense management and a look at how you can improve your process.
If you’re like most businesses, your expense management process looks like so:
Both are problematic, because they rely on manual processes and outdated tech.
Most credit card providers issue bank statements monthly. The timing is up to the provider. So, you might have to do reconciliations when you’re slap bang in the middle of payroll, management accounts, or other important deadlines. And that’s leaving aside the issue of credit limits, which staff can go over surprisingly quickly and which you can’t just raise at a moment’s notice when you need them.
Expense reports aren’t much better.
Most employees dislike filing them and postpone it to the last minute. And because many accounting programs can’t import spreadsheets, someone usually has to input the data manually, probably after having spent hours sifting through crumpled receipts and matching them with transactions.
88% of spreadsheets contain at least one mistake. With a company that employs 450 staff processing 135 expense reports a month, a lot can slip through the cracks. Our research, for instance, found 83% of fraudulent expense claims go undetected.
More importantly, it’s hard to have visibility.
In our Variable Spend Management e-book, we explain how even tech-savvy businesses can struggle. Uber infamously spent £165,000 on helium balloons, and Facebook reportedly spent $1.8 million (approximately £1.3 million) on food and drink for a single event.
Your spending might not be so extravagant. But, chances are, you’ll have a hard time keeping it in check if you can only find out where the money’s going by matching receipts to transactions several months after the fact.
As it happens, real time spending visibility is not only possible. It’s also fairly simple.
With Soldo, for instance, it’s as easy as issuing your staff with prepaid cards:
When employees use their Soldo card, they get a notification and upload a pic of the receipt. You can see the transaction in the dashboard as soon as it’s made.
With an expense tool like Soldo, finance teams can provide different cards for multiple teams.
This is a good way of separating out the expenses related to the individual user like their Oyster card spend, spend on hotel, from their role-based spending. Role based spending would include paying for software subscriptions because they’re in the IT department or marketing for Facebook if the employee is in the marketing department.
Want to find out how much a marketing campaign is costing? Log on to the dashboard and check out the marketing campaign’s wallet. The same goes if you want to find out how much of their travel and entertainment budget sales have spent.
Compared to the traditional way of doing things, Soldo slashes admin and all but eliminates human error:
More to the point, because you don’t have to input data manually to complete your accounting records, you’ll have greater visibility not just when it comes to spending, but also of the business’ financial health as a whole. And, as we explained in our webinar, better financial data gives you more control and helps you make better financial decisions.
Here are three ways more visibility can improve your financial decision-making:
Silent drain is when low cost items become gigantic expenses. As we explain in our Variable Spend Management e-book, this happens when different departments don’t communicate, or if it’s difficult to keep individuals accountable for their spending.
Increased visibility means you can keep track and step in if spending starts getting out of hand. With Soldo, you can also set limits, raise those limits at a moment’s notice if needs be, or disallow certain purchases altogether
If you can see spending in real time, there’s no need to wait for month, quarter, or year-end to set budgets. You can course correct as you go.
Noticed sales and marketing are paying separate SaaS subscriptions? Cancel one of them, get them to share, and use the extra money elsewhere
Real time visibility means you no longer have to wait until after the fact to fix issues or make improvements. This means you can think strategically and plan ahead instead of reacting.
Put simply, you’re in control.
In a world where we can check our personal spending in real time by logging onto an app, and pay bills from our phones in seconds, we can do a lot better when it comes to managing our finances. By switching out credit cards and spreadsheets for tech, you can put repetitive, time-sucking tasks on autopilot and spend more time on what’s really important: growing your business.
Want to learn how to plug silent drain, take control of spending data, and get real time visibility into company’s finances? Watch our FREE on-demand webinar Unlocking Knowledge to Create Growth: A Finance Leader’s Guide
Changes are being brought in to harmonise HMRC’s penalties, as currently, there is no consistency across the tax system. For example, filing your annual self-assessment return one day late results in an instant £100 fine. At the same time, there are many instances where the late filing of a VAT return for the first time doesn’t result in any charges.