Posted: Thu 2nd Aug 2018
Everyone knows expenses equal costs. But to a small business, managing expenses also costs in terms of time, administration and organisation. Dave Oliver suggests some tips to help you streamline the management of business expenses.
This article is sponsored by Soldo, a solution to simplify the entire business expense cycle.
Expenses can soon creep up and hit your bottom line. But it's often the case that a careful review of those 'essentials' reveals a lot of 'nice-to-haves' and perhaps even a few 'never-neededs'.
Managing expenses for you and your business can be quite a strain on resources in itself, so it's worth taking time to take a closer look at how you organise and pay for expenses. It could save you more than just money.
Why travel when you can videoconference?
Face-to-face meetings are best. But when you factor in travel costs and the burden of travelling time, it's not always the most effective way to do business. Travel also requires planning and administration, which can be a drain on resources.
Microsoft's Skype (and its paid-for variant, Skype for Business) or Apple's FaceTime are the obvious free teleconferencing tools, depending on which operating system you use, which you can use via computer or phone, for video or simply use audio for reduced phone costs. You can have any number of people on a call and there's the option to either see their smiling faces or share your screen.
There are many other options too, some free, some paid-for, including GoToMeeting, PowWowNow and Webex. Each has its own advantages, ranging from ease of use to enhanced security. Do your research and pick the one that best suits your needs. The result; travel expenses and admin slashed at a stroke.
Subscription and membership fees can easily build up over time. So it's worth reviewing them on a regular basis to make sure you're still getting your money's worth.
Whether it's software licences that you no longer need, unnecessary service charges on your premises or magazine subscriptions that can just as easily be obtained via the internet, it's worth taking another look at all your regular payments to see where savings can be made and admin reduced.
Managing paper is time-consuming, expensive and largely unnecessary. Big corporations can spend a fortune on 'digital transformation', but for smaller businesses it could start with buying a scanner, and ensuring that you keep digital records of all your transactions.
You can store them on your premises but make sure copies are kept in a secure location, perhaps in the cloud, and that they're backed up daily.
If you're holding customer data you'll also need to ensure that you're GDPR-compliant.
Payroll is a major drain on any organisation, especially in the years when you're building up your business. Outsourcing particular skills and responsibilities can help reduce your bottom line and also cut back on the admin associated with tax calculations, benefits and holidays.
Using a contractor to handle your accounts for a few days a month, or marketing, IT support or data entry, will cost less than a full-time member of staff, and cut down on the amount of management and admin required to look after them.
Or you could outsource your HR requirements, and let them take care of all the employee admin. It'll cost, but it might be worth it to free up valuable executive time.
When you're bootstrapping, it's tempting to source services from different providers, perhaps even pitting them against each other, to try to drive down prices. But that can require an awful lot of time and energy, which could be distracting you or your team from more important matters.
It's certainly worth regularly reviewing your providers and seeing where a single provider can take on the work of others. ho
You may be able to do some consolidation deals, where a single provider will give you a better price in exchange for a broader range of work. Even if a single provider can't quite match the price of a single specialist, the reduction in admin and management costs may have their own benefit.
It's your business, so of course you want to go it alone and you don't necessarily want to do business with rivals. But pooling resources with similar, but different providers, can help you cut down on costs and admin.
In marketing or sales, for instance, a printer can make common cause with a mailing company, restaurants with distinctively different cuisines can share both the expense and resources to sell their respective solutions to prospective customers.
Automate your processes
Using dedicated software for various tasks can reduce admin, save time and drive efficiencies. Cloud solutions, software packages and software as a service (SaaS) options can help you deal with tasks more effectively and allow you to scale up or down as you need to.
That also goes for managing your expenses. A solution like Soldo lets you set up smart pre-paid cards, making it easier to allocate funds and fix limits, while on-screen dashboards let you take in your full expenses estate at a glance.
Using this kind of service replaces the need to use lots of corporate cards to pay for travel, entertainment and other company expenses which can be costly and time consuming.
You can also access instant reports of who's spending what which helps you better manage your business' cashflow and capturing mobile receipts gets rid of the rigmarole of staff having to submit paper expenses.
In addition, software allows you to restrict limits for certain team members both in terms of spending and location.
With the government's push towards digitising business payment activity such as the Making Tax Digital programme, using the latest technology now can put your business ahead of the game.