Are expense processes bankrupting your time?
Hint: it starts with the way you're running your expenses.
The expense of your expenses
Andrew Kerr, GM of Marketing, Product and Transformation at Westpac New Zealand, talks cash-handling, efficiency and how easy solutions are speeding up the expense process for New Zealand businesses like yours.
Businesses often ask, "How can we make managing our accounts more efficient?"
Opportunities for greater efficiency aren't usually hard to find - especially in smaller businesses where people are, quite frankly, too busy running things to find the time to transform them.
No matter the shape, size or battle cry of a business, they all need to make and receive payments - and then manage the cash once it's in the account.
It comes down to processes - and this, ironically, is where efficiency falls short. In business, we don't update these nearly as often as we need to. Many are content to continue to do things 'the way they've always been done'.
Cleaning out processes of the past
The first place to look is how you handle your business expenses. It's hard to believe that many businesses still expect their staff to pay for these out of their own pocket, only reimbursing after the fact in a lengthy, drawn out process. Putting aside the obvious issue of whether staff are willing to use their own money, the reimbursement process is usually a snake pit of wasted time.
Typically, it goes something like this:
Step one: Fill in the reimbursement form.
Step two: Put the form into the office administrator's tray where it sits for 24 hours.
Step three: Get the form back on your desk requesting a better description of the spending and the missing GST receipt.
Step four: Spend an hour going into meticulous detail about the spending incident in question and resubmit.
Step five: Expenditure is coded into finance system and payment is arranged for the next pay-run in a fortnight's time.
Eventually the staff member is reimbursed, but the whole process has taken up a lot of both their, and the administrator's, time.
The good news? There's a better way
Issuing a company credit or prepaid card to relevant staff members can avoid a lot of the hassle, given there's no need to pay them back. Expenditure can be cost-coded online by the cardholder and nothing sits languishing in in-trays or going around in rework loops.
In the past, business owners might have shied away from issuing cards because of the perceived risks involved. These days, solutions have been developed to mitigate almost all of these concerns. There are controls that can block certain types of spending and even settings for only using the card in business hours and at approved retailers.
There are also a number of small businesses that put business expenditure on personal credit cards, leading to hours of work trawling through bank statements with a highlighter marking out the business expenses before sending them off to their accountant. With a separate credit card for business they can have their business expenditure fed directly into accounting software, saving both time and effort to reconcile.
Taking the petty out of petty cash
Another common pain-point is managing petty cash - which could easily be solved using a Prepaid Card to track petty cash spending. Simple.
Payment technology is a fast-evolving space, allowing many opportunities to do things smarter. So, it's worth getting an independent source to assess your business payment processes, especially if you're struggling to find the time. The first stop is asking your banker about what opportunities for efficiencies they can recommend.
In the end, efficiency really comes down to making the lives of those running businesses easier and automating processes where relevant - the solution could be simpler to adopt than you think.