7Newswire
28 Oct 2021, 20:32 GMT+10
COVID-19 brought about a series of new changes for businesses to ensure their survival. Now, leadership teams need to have the foresight to predict the future in terms of risks or opportunities for their business.
'Companies have begun to modify their cost management strategies from what was a 'Save-to-Transform' right before the pandemic to a 'Save-to-Thrive' model.' -
The unstable economy has led to a 74% increase globally in the adoption of cost-saving methods. However, given the current scenario, it is safe to say that every little penny saved could impact its profitability. To sum it up, there is no better time for businesses to look for new ways to reduce their expenses while also ensuring a solid financial balance than now.
Why should businesses find ways to reduce expenses?
How Can Businesses Cut Down On Expenses?
'Human errors are the reason behind 50% of data breach incidents.' -
The danger of managing critical financial processes manually is that they leave multiple avenues for human errors. Additionally, a remote scenario where managers cannot constantly monitor employee actions and progress results in lost time and money.
How to check if existing financial processes need refinement?
How to fix broken financial processes?
Let's take the case of manual expense management:
If your company processes around 100 expense reports in a month employing a spreadsheet system, it will cost you about $68 per report to process.
But, if you use an expense management software, the processing time per report is cut by a third, and the cost for processing the same 100 reports will be brought down to $11 per report.
Another example that's especially relevant in the remote economy is business travel.
If a company has 10 sales employees that regularly travel and average a cost of $3000/month in air travel, that comes out to $30,000 each month that your business spends on business travel.
But if your company purchased webinar software to eliminate the need for 50% of these meetings in-person, it could save the company an extra $15,000 each month.
Similarly, optimize other financial processes by calculating their ROIs to save on multiple hidden and operational costs.
Alternatively, if you want to track the activity of the sales team and automatically generate activity reports, you can use a sales CRM. It'll help your team to cut off manual tasks and focus on activities that contribute more to ROI.
Efficiently track and monitor business expenses
'Financial management, when done correctly, can ensure that businesses stay well-within budgets and don't overspend.' -
Federal Reserve Bank of Chicago
Staying right on track with one's expenses is the first step of effective financial management. Here's how it benefits businesses in the long run:
The cornerstone of policy compliance is a well-made expense policy. It doesn't just enforce compliance but also dramatically reduces the number of policy violations, expense fraud cases, and back and forths employees need to have with the Finance team.
With the complete shift to a remote mode of work, employee needs have changed. This means all previously existing policies are now subject to change to better adapt to remote work needs.
How can businesses suitably modify expense policies?
How can businesses improve policy compliance?
Conducting regular audits is the only way to ensure that expense fraud is prevented. As mentioned before, taking serious action on fraudsters ensures every employee is aware of the consequences, which drastically helps reduce expense fraud to save costs.
How can regular audits benefit your business:
Conclusion
Fixing your broken processes are essential to sustaining through these uncertain times. Expense management, lying at the core of every business, cannot remain broken if you want to thrive. Streamlining it with an expense software can often go a long way in helping you find cost-cutting opportunities with zero additional effort.
This ensures your business maintains sound financial health to optimize costs wherever it can.
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