Alistair is a Financial Business Partner at Quantico. Prior to Quantico, Alistair worked for 5 years as a Forensic Accountant at PWC. Quantico is an accounting firm for entrepreneurs.
For Alistair, managing company spend is a lot more than re-budgeting and tracking financial metrics. Learn how Quantico has used transparency to reduce spending and keep staff motivated, and how they’ve helped their clients grow during this crisis.
The team at the accounting firm Quantico makes a living helping businesses grow and solve problems, so reducing costs was a natural part of their work even before COVID-19.
During the pandemic, they’ve refrained from recommending additional layers of sign-off to their clients’ spending.
Instead, they’ve encouraged management to keep communication channels open with staff. Leaders should promote more employee discretion when using company funds, which will help reduce unnecessary expenditure.
During a national lockdown that sent so many people home, office rent became one of the largest – if not the largest – unnecessary expense for companies.
Among their client base, Quantico saw different levels of cooperation from landlords: while some offered very generous discounts, others insisted rent was still paid in full regardless of empty offices.
Nonetheless, many Quantico clients successfully renegotiated payment terms with suppliers – especially software suppliers.
Alistair highly recommends businesses contact their suppliers to check if they can offer any discounts or, at the very least, payment deferrals. If there’s a time to do it, it’s now.
Naturally, not all Quantico clients came out unscathed from lockdown, and some suffered badly – particularly those in the entertainment business, who have had to cut all costs down to the absolute minimum in order to survive.
Zero-based budgeting (ZBB) isn’t the most appropriate approach for Quantico’s mostly SaaS-related companies.
Alistair suggests instead that, where possible, businesses invest through the crisis (if they’ve got the funds for it). This way, they redirect resources towards something that will immediately help them.
Alistair is in favour of optimising utilisation (especially when teams are working remotely) during a crisis.
It’s crucial for businesses to ensure their employees are staying happy during this difficult time, and that they’ve got the resources and equipment they need to be productive. This will, consequently, drive financial metrics such as growth margin and return on capital.
Besides those, Quantico considers cash flow and overall liquidity the most important factors to consider right now. Too often they’ve seen start-ups fail because they’re not as forward-thinking as they should be regarding their cash runway.
This results in unpleasant surprises, such as finding out they’re running out of cash. Invest well enough, ahead of time, and you’ll be more prepared the next time your business needs help staying alive.