We spoke to 1,000 small business owners in the UK about their concerns surrounding business expenses. Here are the results, they may shock you:
42% admitted that concerns about business expenses are disturbing their slumber. 52% of respondents said that balancing cash flow is also a worry, and 41% said that coping with a long payment pipeline can pile on the pressure too.
Thankfully, there are numerous ways that business owners can streamline the expenses process and make it less of a headache. Here are my five tips for how SMB owners can deal with some of the business expense burdens and get back to a good night’s sleep again.
Implement an effective expense policy
It might sound obvious but putting an expense policy in place that actually works is the crucial first step to eliminating the expenses issues that keep you awake at night.
Put down on paper what exactly counts as a business expense, and the process your employees need to go through to claim the money back.
Be clear with your definitions so there is no ambiguity. It’s also important to be sensible and reasonable with your expenses policy some things will need to be expensed but trust your employees and encourage them to find ways to avoid unnecessary extravagance.
Crucially, once you have your expenses policy, communicate it with your employees. It’s no good having one in place if no one knows about it.
Utilising technology to minimise admin
Another reason why people lose precious hours of sleep over expenses is because of the drain on resources when administering them; our report found that UK SMEs are spending two full days of staff time per week reconciling expenses.
Printing out and manually filling out expenses forms is antiquated and clearly time-consuming, even entering expenses reports into a spreadsheet isn’t very effective as a time-saving method.
For smaller businesses, there’s a lot of time spent on expenses that could otherwise be spent on taking care of other necessary tasks and growing the company.
Invest in expenses software that lets employees submit their expenses digitally on their desktop or smartphone. Advanced solutions can help to ease the reconciliation process by keeping track of all company spending, and providing one automatic consolidated invoice, rather than dealing with multiple bills at the end of the month.
What’s more, it also provides added control for business owners, who are able to set limits on spending, from the amount spent, to the frequency, location or purchase type.
Using this type of solution that simplifies and automates the process for reconciliation, maximising efficiencies and reducing the administrative man hours of expenses.
Use fuel cards to help manage one of your biggest business expenses
Astonishingly, many SME owners consider fuel to be a relatively small expense for their business.
However, our research suggests these same SME owners pay out on average of ?665 per month on fuel alone. It could be having a much bigger impact on cash flow than most realise.
Intelligent fuel cards, such as the Allstar Plus VISA card, enable employees to seamlessly pay for business-related fuel expenses with a company card, while ensuring the employer is in control of any spending on the card.
They are able to set limits on purchases, from how much is spent, to the location it is used in, and on what.
At a time of acute economic uncertainty, combined with the recent four-year high for fuel prices, it’s more important than ever to lower overall spending on fuel.
Opting for an advanced fuel card that provides access to discounts on diesel at the forecourt, or rebates on vehicle maintenance and repair work can help to significantly cut fleet costs.
Get discounts and interest-free purchases from expense card providers
Some expense card providers will offer purchases that are interest free for a select period, so choose one that has a longer time limit.
While this might sound like a small change to make, it will go a long way to helping businesses stay on top of cash flow, particularly in their early days when cash might not be so readily available.
Don?t let employees foot the bill
Research suggests that over 26% of employees asked to foot the bill for expenses upfront have looked for other jobs.
It’s an issue often overlooked by employers forcing employees to initially cover business expenses out of their own pocket puts those employees in an uncomfortable position. It can place unnecessary strain on personal bank accounts, especially for high-value purchases.
Implementing a charge card system for expenses will ensure that employees aren?t hit with morale-crushing costs. If you’re losing sleep over expenses, the last thing you want is to lose staff over it because they are bearing the business expense burden themselves.
The key to a better night’s sleep
Dealing with expenses is a big admin burden for many companies, which can have a significant impact on the overall efficiency of a business.
However, if you put some of my advice into action, you?ll find that you can easily reduce some of the headaches that managing finances cause for you and your employees.