How do I keep a company’s expenses in check?
We all want our businesses to be successful, and in almost any industry, in order to achieve this, you have to spend money. However, the adage that money makes money only holds true if the expenditure is correctly directed.
The problem is that today many companies don’t keep a tight reign as to where that money is going, and waste can and does occur over time.
This isn’t regarded as a major issue when the going is good; however, it could become one during a financial downturn when you suddenly realise that all that waste could be a contributing factor to your current profit warning. Let’s take a look at some of the best ways to keep expenses in check.
Businesses can save money by spending more money. While on the face of it this may seem counter-intuitive, companies that spend more on the right technology and exceptional employees will save more in the long run.
If you go for a cheaper option, you will probably have to replace it a few times down the line and end up spending more than if you had made the correct choice in the first place. This is as true of people as it is of capital equipment or technology.
Outsourcing can be a great way of cutting down on fixed costs. We now live in a world where freelancers who can do things at an hourly rate are a mouse click away. Make sure that the staff your business is employing are really needed to fill their full-time positions and are fully utilised. Recognise when someone’s role is no longer essential and only hire new people when the long-term order book fully justifies it.
Your business might know how to get money from its clients, but does it know how to get money from its suppliers? By this we mean, are you spending too much money on office rent, manufacturing, supplies and other things you need to run your business? Use the skills you’ve learnt negotiating with your clients and apply them in equal measure to your expenses.
Just how much time and money do businesses spend on meetings and meetings about meetings? The answer, for many, is far too much. If they spent more time getting on with the job at hand rather than having a post-meeting follow-up meeting they’d most likely have more time to make money, uncover new ideas and discover new clients.
Reconsider overseas travel
Networking outside of your immediate region can bring dividends, but make sure every trip you make has a return on investment.
Before agreeing to take part in the next conference or trade show, ensure it is worth your while. Plane tickets, hotel rooms, staff dinners and entertainment can really take a toll on a company’s bottom line. Consider video conferencing technology which is far more affordable than it was even five years ago, thanks to VoIP internet-based systems.
Control employee expenses
If you’re not monitoring your employee spending adequately, then you’re opening a door to a world of financial problems. In the past, it was either petty cash or a business credit card, which led to all kinds of unwanted issues from lost receipts, runaway spending, added bookkeeping and a lack of control.
This is where Soldo’s prepaid business card comes in handy. Controlled through an integrated dashboard system, the card can be topped up remotely along with limits and spending rules. Alongside prepaid cards, companies should consider developing a comprehensive employee expense policy that explains what are allowable expenses and how to claim them.
Our prepaid company card gives administrators the ability to define clear spending rules at individual card level, immediately transfer funds where needed and to monitor all transactions, giving them full visibility and control.
The card also enables you to extract data according to department and expense type so you can see where money is being spent which leads to better future forecasting and control. The dashboard works with all the major accounting software including Xero, Concur, Expensify and more, meaning expense reports are automated.
Learn more about our business prepaid cards here to understand how your company can benefit from Soldo’s comprehensive spending management solution.