Businesses today are in unique territory, with government interventions and economic uncertainty taking out their traditional revenue streams. To continue operations, they need to look at reducing their burn rate.
To do this effectively, companies must gain clearer and more granular visibility into their cash flow – only by knowing where they are spending, and understanding whether those expenditures are excessive, will they be able to figure out where to cut spend.
One vital area to scrutinise is employee spend. With many firms instituting remote work and typical finance management systems being disrupted, it is more crucial than ever to see and proactively manage employee spend.
Here are five tips for organisations to manage spend in uncertain times:
- Eliminate manual finance processes. With a remote workforce, paper-based management of expenses and invoices can lead to challenges and even cause late payments that can skew financial outlooks. Companies should consider investing in cloud technologies to operate and control spend remotely, on the go, and from anywhere in the world. One example is cloud-based travel, expense, and invoice solutions.
These automated tools, which include mobile apps, allow employees to submit expenses by simply taking photos of their receipts. Finance managers can also approve expenses and automatically update them into finance management systems without having to track down the physical paper trail at the office. - Set clear spend policies. An updated and clear expense policy can help eliminate any grey area and get everyone on the same page when it comes to corporate goals and parameters for the company spend.
As a best practice, these spend policies should be transparent and must provide comprehensive direction on how expenses, invoices, procurement requests and other financials should be handled. - Get forward visibility on outgoing spend. When it comes to cash flow in uncertain times, knowing what spend needs to happen and ensuring that approvals can still take place can make the difference between healthy cash flow and late payment fees.
Don’t fall behind on your accounts payable. Instead, ensure steady cash flow and resilience against any business changes by increasing visibility. - Understand spend trends to negotiate payables. Connect with regular suppliers and ask about options so that both businesses can continue to run in harmony when cash might be short. With technologies like a centralised invoice platform, businesses can have full visibility into the why and where of outgoing spend.
- Prioritise employee needs. It has never been more critical for businesses to take extra care of their staff and provide them with the resources they need to do their job effectively. A recent Forrester study found that organisations that create exceptional employee experiences have engaged workers and improved business outcomes. It’s important that employees have the right tools to do their best work – they are brand advocates and the first line of communication to current and prospective customers.
Determine what they need and pinpoint solutions that will streamline their work, opening up more time to check in on customers and foster positive relationships. These may include mobile solutions that simplify administrative tasks with the touch of a button or API integrations that connect data across an organisation so it is accessible in one place.
Many businesses run with substantial excesses. During difficult times – when the inclination for investment dips – agile businesses have the opportunity to get a leg up on the competition by streamlining their operations while keeping their employees engaged and productive. So now is a good time to work on the above five steps.
And when a business has its cash flow sorted out, it can afford to take a step back and delve into strategic tasks like understanding the current landscape of their market and re-optimising the business’s positioning. It will also be in a better position to study how its customers’ preferences are likely to change as we enter a new normal and make adjustments to its medium-term business model.
When crisis visits, so does the rare opportunity to reshape a business and build it more sustainably for the future.
