How can I make my back office more efficient?
Support services are often among the first areas to undergo cost-cutting measures when times are tight, together with employee travel. However, the knee-jerk reaction in making support staff cuts offers little more than a short-term effect on business expenses, and often brings with it reduced morale and productivity.
Some shrewd reconfiguring of support functions – and even investing in more efficient and innovative systems is a smarter way to achieve reductions in company spending over the long term.
Identifying the root cause
A common mistake is to take cost-cutting measures without fully understanding the problem. In an ever-evolving business environment, back-office structures and processes need constant evaluation to maintain optimum efficiency. Here are some common areas for consideration.
By simplifying the scope of back-office functions, companies can focus on what is essential to their customers and the business. Reporting is a good example. Reducing reporting to a minimum means that a back-office can operate at a lower cost. Additional services can then be offered to business units at an extra charge. Creating a service stripped back to the essentials with charges for extras manages expectations and creates market mechanisms that promote better quality services. These relatively simple changes can reduce costs by around 25%.
A complete restructure of support services is almost invariably the hardest strategy to implement but can yield the most significant cost savings. It may involve relocating staff, consolidating support functions in several locations into a single, regional service centre, or bringing support personnel out of branches and into the corporate HQ. The decision to outsource can emerge from a fundamental restructuring exercise.
Implementing smarter processes in the back-office involves analysing existing procedures and eliminating steps that consume time and money. Take travel expense processing, for example. Employees have traditionally collected receipts while travelling and filed lengthy expense claims on return.
Expense approval can take time, so it’s important to have a clearly outlined employee expense policy that includes instructions for employees’ claiming expenses. Out-of-pocket employees can be waiting up to a month or more for reimbursement. With many bookings and payments having moved online, the collection of paper receipts and back-office procedures surrounding them are becoming outmoded. In fact, that extra step of printing out digital receipts to attach to an expenses claim adds to an already laborious process.
Identify automated solutions
Turning manual processes into paperless solutions is a well-known method of cost-cutting, as is clamping down on all but essential business travel. The Soldo expense management solution goes several steps further to combine the best of both worlds.
Using our expense management dashboard, finance teams can manage individual prepaid business cards or virtual company cards, setting rules on validity such as specific periods of time, countries, and types of expenses. This measured approach to control company spending, coupled with initiatives to increase the use of virtual meetings and webinars can reduce travel expenses significantly.
Valuable time is saved too: via the dashboard, expenses can be reviewed, processed and approved in real time, eliminating the need for employees to compile a claim at the end of a trip. Employees can even photograph paper receipts and send images for immediate review and approval via the Soldo app. All expenses are compiled digitally and in real time, and since the company cards are prepaid, the need for reimbursement is eliminated.
Our dashboard works together with major expense management software such as Quickbooks, Concur and Xero, as well as Sage accounting software, integrating the management of employee expenses with the overall financial management of the business.
If you are interested in streamlining expenses management, or want to learn more about our prepaid business cards, click here or alternatively contact us for more details.