Why ‘follow the money’ is the best business expense management advice11 July, 2018 1:29 pm
It can’t be stated simply enough. You’re in business to make money, not to spend it without extracting the last ounce of value from it. And that’s why you need to use expense management software for small business to achieve a sharp focus on what you spend, and what perhaps you shouldn’t. Blogger Stuart Pearcey recounts a cautionary tale that brought it home to him…
My accountant put it succinctly when I suggested I was thinking of taking on an employee because the volume of work I was doing was growing. He came right to the point: “The next time you say that, I’ll beat you with a broom handle until you change your mind.” Hmm. I guess you don’t think that’s the best idea I’ve ever had?
Sir Alan Sugar says something similar to candidates on The Apprentice when they fail to follow the money, though without the threat of physical violence. He nevertheless highlights their failure to remember why they’re involved in the task – or business in general – in the first place.
They’re both right, of course. In Lord Sugar’s case the logic is simple. You’re here to make more money than the other lot, and work together to make that happen, not to fight amongst yourselves in a frenzy of mutual backstabbing. Candidates ought to have worked that out by now, given how long the programme has been running.
In my case, I hadn’t given sufficient thought to the financial consequences of becoming an employer, and what it was going to cost the business before said employee had contributed a bean.
And so, it should be with all the spending your business gets involved in. Getting money into your business is so hard that you really should work as hard as keeping it as you did at earning it in the first place.
And to make that happen, because neither Lord Sugar nor my accountant will be at your shoulder, you need some good quality small business expense management software, because it will do the job for you – without a broom handle in sight.
What expenses are leaking out of your business?
Do you actually need to go? Is there a better way of doing business? Considering how much of a connected world we’re supposed to live in these days, why are station concourses always so busy? Have you explored the possibility of telecommuting? Get some employees doing that – in a proper structure, of course – and it’ll feel like a pay rise when they no longer have to fork out for fares or fuel. And you’ll have them working for you in a better frame of mind.
Food and drink
A few pounds here or there is next to nothing in the grand scheme of things, isn’t it? Well, perhaps. But next to nothing isn’t nothing, so if every employee spends a few pounds here and there on a coffee or a sandwich, there’s a bill to pay come month-end. Add it up over a year, and ‘next to nothing’ probably turns into ‘how much?!’Software
Having an employee will cost you more than a salary. What about their phone; their computer; their desk and chair, their pension, the alterations to the building to make it appropriate; their sick pay, and maternity and paternity leave? None of those things should stop you taking on an employee but work out the expense that’s going to be involved first. If the revenue they generate isn’t going to cover all of the extra costs, especially if you hit a lean patch, you’re not following the money.
Isn’t expense management software expensive?
Certainly not! For a start, it’s a competitive market place, so prices need to be keen. And also, because it’s a competitive market place, providing good expense management software for small business isn’t enough. The product has to have some kind of USP. For Solo Expenses, there are a number of those. For a start, some elements of the package on offer are free (how keen a price is that?). As for the others, you can turn those on and off at will on a rolling contract basis, so you’re never billed for what you neither need nor want. Doing so is simplicity itself; just a few clicks on a simple dashboard will customise your software faster that it takes to read about it.
The killer argument
And here’s the killer argument: Use this software diligently, and you could save 5% or 10% on your expenses, so instead of being a business cost, you could find that using the software actually becomes an income stream!