How can I cut back-office costs?
While the UK economy has recently seen higher levels of growth than expected, many companies are looking for ways to improve efficiency and cut company spending in a business environment overshadowed by Brexit uncertainty. This includes looking at back-office expenses and how to reduce them without impacting performance or productivity.
While some back-office functions, for example, finance, will have a specific schedule of work, others will not. Instead, their work will be reactive, responding to seasonal peaks and troughs. This can leave you with too many staff for the work required at times, meaning you’re paying people not to work, and insufficient staff at other times, leaving you exposed to contract staff agency fees or expensive overtime.
Forecasting workload requirements help you to avoid these unnecessary costs, allowing you to identify how many staff you need and when you will need them. If there is downtime and staff aren’t required, you can then look at redeploying them in other parts of the business or asking them to take on additional responsibility. This way, you won’t lose good staff during quiet periods and the team you have will broaden their skill base.
If you need staff to pick up work in other areas, you’ll need to make sure they are trained up to do so. Investing in staff training might seem counter-productive when you’re looking to cut back-office costs. However, it will be cost-effective in the longer term as you won’t need to recruit staff when you have skill shortages or rely on expensive agency staff.
If you decide to train your employees up to do another job as well as their own, make sure that they carry out their additional tasks on a regular basis so that their skills are kept up-to-date, and you don’t lose time later on with them having to relearn to do something all over again.
Low productivity can impact back-office costs, and many UK companies are less productive than their European or American counterparts. Staff engagement is critical to improving productivity. The more engaged staff are in their work, the more productive they’ll be, leading to higher quality work, fewer mistakes, and – ultimately – lower costs for you as work won’t need to be redone.
Look at ways in which you can motivate staff and reward them for work well done. Develop a reward and recognition policy that has tangible benefits. This might mean letting people finish early on a day when they have completed their work or recognising them in a company newsletter. You might also consider flexible working or bonuses when targets are hit.
Use technology to bring about efficiencies.
Many back-office functions tend to work in silos and can often be invisible to the rest of the organisation, even management, who set up administrative departments and then forget about them, focusing on other areas that more obviously impact business performance such as sales. As with any other part of the business, however, back-office teams should be reviewed to ensure they are performing efficiently, and changes should be made if they are not. Technology can play a big part here.
Finance teams, for example, often say that one of the most significant issues for them is the managing of expenses. They can be time-consuming, with staff completing paper-based returns which need to be checked. This can lead to delays in paying expenses and errors in processing them, both of which have an impact on employee morale as many staff are asked to cover the cost of business expenses out of their own pockets.
Another issue with staff expenses is the number of ways they can be accumulated, with staff not only using their own funds but also those from petty cash and company credit cards, making consolidation time-consuming for finance teams already stretched at month-end.
Soldo’s spending management solution, which includes a prepaid business card, mobile app and finance dashboard, provides a technological solution to these problems, helping you cut down on back-office costs and improve the productivity of a key department.
Our solution enables you to set budgets, so there is less risk of overspend, and implement restrictions as to what staff can and can’t spend money on, reducing unnecessary and unwanted costs. And, because it offers real-time reports, your finance teams can monitor spend across the month rather than waiting for paper-based expense reports to be submitted along with paper receipts that can easily be lost or damaged (the app lets employees upload receipts).
If you would like to find out more about reducing the cost of expense management, why not contact us today or visit us HERE.