As a leader of a small business, you can get bogged down managing expenses. But if you ensure sound financial processes, it will save you time and help provide a framework for you running a successful business.
These 3 practical strategies will free you up to focus on what most business leaders do best – drive revenue and service excellence.
1. Build a complete finance team – really!
This is the most important and foundational strategy, not just for expense management but entire company management, which is why it is #1. Money is the most objective measurement stick for how the market values your services. With an effective finance team, they will keep the company’s financial performance front in center in management meetings. This truth promotes greater honesty and accountability which are key ingredients for a company’s success.
Many business owners feel they can’t afford a ‘complete finance team’and they are right if you were to hire full time employees. Fortunately, just like Marketing and IT teams, you don’t need full time support for any one of the roles. In fact, a ‘complete finance team’ should costs less than the typical bookkeeper / tax accountant setup.
What is a complete finance team? There are seven different roles that make up a complete finance team which is why just having the bookkeeper and tax accountant roles covered is a recipe for failure for over 90% of business in the first five years. The seven roles all finance teams must have are:
- CFO – strategic and concerned about managing risk, cashflow requirements and profitability.
- Financial Controller – financial team manager, competent at most activities and a good coach. Typically lacks the strategic and senior management level experience and thought processes.
- Management Accountant – a disciplined worker with a strong understanding of how numbers must reconcile and fit into categories and time frames.
- Bookkeeper – a customer and service centric person who also understands the business operations.
- Payroll Specialist – a specialist in the laws and responsibilities for all aspects of compensating employees and the related compliance.
- Tax and Compliance Specialist – a person who knows the details within tax strategies and compliance requirements.
- Data Manager – someone who knows how to extract data from multiple systems, aggregate into a single report and visualise the information in a way that is easily consumed by businesspeople.
Accurate financial data stems from inputting correctly the first time and not having to go back and clean things up intermittently. In order to achieve this one touch strategy it is necessary to have the right specialist performing their part in the process. A bookkeeper simply doesn’t have the breadth of skills and experience to by a CFO, Financial Controller, Management Accountant, and/or Data Manager.
2. Use simple and convenient expense validation
Though a strong finance team will free you up to do other things you will still want to know how your business is spending money. This is easier when you are part of a small team, but as you grow, it can be harder to keep track of.
Automated systems can give you real-time expense validation that allows you to have oversight of company purchases and keep track of expenses as they arise instead of at the end of the month. Repeat expense payments can be automated, reducing the amount of paperwork and time.
3. Offer flexible and secure payment methods
When you first start your business, you’ll probably be relying on the company credit card. As your team expands and your salespeople and other staff are charging expenses on a regular basis in different locations, this can become a real headache!
Many financial institutions offer expense cards tailored to individual staff members with monthly credit limits that can be set on an individual basis and broken down into categories of expenditure such as travel, accommodation or marketing.
The advantage for you as the company leader is that you will now have access to a quick oversight of the team’s expenses daily instead of a shock at the end of the month.
Use these 3 practical strategies to free you up to focus on what most business leaders do best – drive revenue and great service delivery.
Get in touch with our team today to see how we can assist your business.