Around 36% of businesses end up exceeding their budgets. As a result, you need some spend control to keep your business expenses in check and derive the most value. Only then can you maximize your company spending and get more out of every dollar leaving your organization.
Today, we will present a few proven ways to control your company’s spending. However, don’t confuse spend control with cost-cutting or cost control.
On the contrary, spend control is more focused on wise spending of your company budget. Here is how you can more bang out of your bucks:
1. Use Real-Time Tracking for More Visibility
Most financial teams use old data to control spending that is at least older than a few weeks. As a result, they do not have complete visibility into business expenses. Additionally, they don’t know when money is being spent and where it is going.
Therefore, businesses need to shift to real-time data to track spending for more visibility. They need to use appropriate tools to track an expense as it is made. Expense management software can turn out to be a key consideration and pave the way for efficient spend control.
Additionally, you will be able to track each transaction with a few clicks on your mouse.
2. Create a Single Source of Truth
Most businesses are stuck with spreadsheets to control spending. Those who have chosen digitization are also working in silos with fragmented data.
As a result, they cannot justify all expenses and even lose track of some.
The solution is to integrate all your tools to create one source of truth. So, you should integrate your accounting software and expense management tool for a seamless flow of data.
This will allow you to develop quick insights and make informed decisions. You can also expect improvement in your forecasting accuracy.
3. Set Up a Clear Expense Policy
Most organizations lack a clear expense policy. As a result, employees are confused about what they are allowed to purchase or spend on. Additionally, your finance team has to deal with endless approvals and reimbursements that take a toll on your efficiency.
The first step you should take is to create a clear expense policy. Next, communicate the policy to all employees who are allowed to spend money.
Another way to overcome this challenge is to use virtual credit cards. You can create custom cards for each employee with expiration dates, spending limits, and more.
Best of all, you know instantly when an employee spends out of their cards.
4. Validate Every Expense
Every business expense must generate value or bring due returns. However, that isn’t the case with most organizations. They continue to pay for services on auto-mode without measuring what they get in return for their payments.
Therefore, finance teams must take a step back and take the time to validate every expense. You will find many that aren’t generating enough value or are outright unnecessary.
Involve other stakeholders in making decisions on the suppliers and services you need to achieve your business objectives. Additionally, ensure your employees submit proof for every transaction for sound accountability.
5. Automate Repetitive Tasks
The main task of accounting teams is to guide financial decisions to unleash business growth. However, they have to spend countless hours asking for receipts or matching transactions instead.
No wonder most organizations can’t control spending nor maximize their budget.
Automation is the way ahead and can help businesses save time and labor. More importantly, it will free up your accountants to focus on more productive tasks, like controlling spend.
Additionally, you can look forward to reduced costs and more productivity. Plus, you can achieve a paperless system without the need for physically storing files or spreadsheets.
Spend control is a vital business process to ensure your money is spent right. Businesses should rely on real-time data and integrate tools to create a single database. They can use tools to track business expenses and account for every dollar leaving the organization. Additionally, you can justify your current expenses and eliminate those that bring no value.
Ultimately, take the help of automated solutions to stay on track and achieve more growth. You will also be able to enjoy related benefits like reduced costs and a productivity boost.