How to cut costs by using online expense management software14 September, 2018 10:55 am
Here’s a radical thought: No company should seek to cut costs. ‘Rubbish!’, we hear you shout. But hold on a minute. Financial management in any Organisation is about exactly that; managing finance. The real objective is to become more profitable and cost-effective, and there’s more to that than simply ‘cutting costs’. Here’s why.
Faced with falling revenues, a company looked around for ways to reduce its expenditure. Employees were made redundant, offices were closed, and spend was reduced.
That worked for a couple of months. But in reducing the number of employees and closing offices, the company was inevitably reducing the levels of service it was able to provide. Customers weren’t slow to notice, voted with their feet, and revenues declined further.
They put the company into real difficulties. Having been through a painful exercise, it found itself back exactly where it had started.
The cost-cutting exercise was flawed, and therefore doomed from the start because of one fatal error. The company had sought to match its outgoings to its income, and that was back to front. A sounder approach would have been to benchmark the spend required to provide a proper service, and then working out ways to lift revenues to meet that figure.
In that context, efforts to cut costs are acceptable, so long as the question remains the same: “How can we cut costs without reducing service levels?” And that question remains unanswerable until spending has been benchmarked.
Evaluate the position with business expense tracking software
You’re going to need proper records. To get that you need the simplest possible system, and that’s going to be online expense management software like ExpenseOnDemand.
Developed over almost two decades, this smartphone app is the perfect tool to benchmark spending. Every spend can be itemised and collated, and the resulting record can be used to generate reports which will provide an insight into the way your business spends money.
Every employee can use it, and its simplicity, as far as the user is concerned, means its easily adopted. (It’s in the background that the complexity is built in, allowing you to understand the spending in your business).
How to use the knowledge
Armed with that information, it’s possible to see patterns and analyse spending peaks. For example, how much time do employees spend travelling, and is it all really necessary? How hard would it be to switch to videoconferencing, for example? The technology exists, and could be an ally in your cost-cutting efforts. Taking that option would remove the transport costs and strip out time wasted in travelling. Some clients may still wish you to see you face to face, and that’s OK, you could still make those trips – but you could also make savings in the relationships with others.
You might also see rises in input costs that can be addressed by working with existing suppliers, or casting around for new ones.
Online expense management software can also be used to highlight fraud, and its simply faster than outdated old school techniques. That delivers opportunities to make better use of time, such as searching for and following up new sales leads – with no detriment to the expense recording process.
In short, you’ll learn how business expenses are linked to so many other metrics, including sales, stock levels, and profits. It’s a complex and ever-changing picture, which is why online expenses software is the way to go, since the data it contains is instantly accessible.
The features in the ExpenseOnDemand business expense tracker app can be turned on and off at will to create a truly bespoke business management tool that’s infinitely scalable to fit any organisation. And the competitive pricing structure means that far from being an extra cost burden, it can turn into another income stream – perfect for a company seeking to enhance its profitability.