Trouble with Expense Management?
March 16, 2022
Expense Management, Management
Expense management is not generally a fun topic of discussion for business owners. Just the mere mention of the term by an accountant or bookkeeper can produce groans and shrugs from a business owner. Of course, we all know the importance of vigilant expense management. But really who wants to deal with it?
Here are some proven ways to take the headaches out of expense management:
Invite feedback from your employees:
Too many business owners keep the costs of running the business a secret from the rank-and-file employees. Either the owner believes his employees won’t understand or don’t really care about expenses. Or even worse, the owner equates revealing his business expenses to showing the ledger of his personal checking account. But transparency is a key to healthy expense management.
When employees know the impact of expenses on the bottom line, they are more likely to make conscious and frugal spending decisions. Moreover, when the owner asks for feedback from his employees on expense management the entire organization can rally around a common cause. Employees should be empowered to make good expense decisions and equipped with the knowledge of how those decisions (no matter how small) impact the health of the business. And when they feel they have a say in how expenses are handled, they’ll stop seeing expenses as spending “your money” and start understanding they are spending “our money.”
Leverage automation in your expense management system:
Many of us have worked cumbersome expense reimbursement procedures including duplicate forms, multiple signatures, time sensitive approvals, and then waiting for multiple pay cycles before ever being reimbursed. Too often the processes for purchases that are directly billed to the business are equally as cumbersome. In this digital age of automation there is no reason for any business to still be using a manual expense management system. Processes can easily be automated using cloud-based or local server-based solutions. As a bonus, when automation is used properly, the owner can track those expenses more efficiently and pull powerful reports for both reporting and planning.
Pass the savings down:
Business owners are often quick to reward their employees for sales and growth. But what about cost savings? All of these can add to the bottom line, and both should be celebrated. You can then set expense management goals for your workforce and celebrate milestones and hitting goals. Use some of the money saved through more efficient processes and better spending by your employees to throw an office party, provide small gifts, or pay out a “profit” bonus. If your employees understand that there is a reward for saving the company money, they can get just as charged up as they do for sales and growth.
Does your business need help automating your expense management? Talk to one of our business consultants about expense management solutions.