Without good resource management, even the most promising companies risk failure—which could explain why business owners cite controlling expenses as one of their top priorities.
In a 2014 SunTrust survey of small businesses earning between $2 million and $9.9 million annually and midsize businesses earning between $10 million and $150 million annually, controlling and managing expenses was deemed “extremely” or “somewhat” important to a majority of companies. And yet, most feel ill-prepared to control their expenses over the next six months.
Technology could be the answer, says Jim Secord, CEO of accounting software provider Kashoo. In fact, according to the SunTrust survey, 33 percent of small businesses and 42 percent of midsize businesses cited investing in technology as an action they would take to control expenses in the future.
Secord says the advent of cloud-based technology has made it easier and more affordable for companies of all sizes to monitor and manage their financial resources.
“It used to be that enterprise software was really expensive, and therefore exclusive to large companies,” he says. “The cloud has changed all of that. For a relatively small amount per month, you can have state-of-the-art systems that help you manage your business and control your expenses.”
Here are three such systems, which could help your company achieve maximum savings at minimum cost:
1. Expense reporting software
For less than $10 per user per month, companies can deploy a cloud-based expense reporting solution such as Tallie, which tracks employee expenses “from receipt to balance sheet,” says co-founder and CEO Chris Farrell.
“We’ve all had an employee who books really expensive hotels, or pays more than they should for flights because they wait too long to book, or spends a lot with certain vendors and doesn’t realize we could negotiate a discount with them,” Farrell says. “A wave of travel management solutions can help you address all of those things.”
Employing better reporting software may also have the added benefit of making it easier to review the full scope of employee travel—and find areas to cut back. According to the SunTrust survey, 46 percent of small businesses and 43 percent of midsize businesses that reduced travel or switched to teleconferencing to control costs in 2014 found success.
2. Accounting software
Businesses that want to manage not only employee-incurred expenses, but also invoices, deposits, bill payment and payroll, may consider a cloud-based accounting solution such as Kashoo, which turns a business owner’s smartphone into a veritable CPA. The result—real-time transaction recording and reporting—is especially valuable come tax time.
According to the SunTrust survey, 30 percent of small businesses and 41 percent of midsize businesses reported successfully controlling expenses by automating expense controls and reporting in 2014.
“Whether mileage or mobile-phone costs, there’s a plethora of tax-deductible expenses that business owners forget to record,” Secord says. “If you use [cloud-based accounting software] to keep track of transactions as you go instead of waiting until the end of the year to give your bookkeeper a shoebox full of invoices and receipts, you can see thousands of dollars in tax savings that go right into your pocket just because you’ve done a better job at recordkeeping.”
3. CRM software
Expense management and accounting software assist with back-office management, but front-office management can be just as critical, says Diane Haines, vice president of product marketing at business software company Sage. Specifically, she recommends a cloud-based customer relationship management (CRM) solution, such as Sage CRM, which for less than $100 a month can keep track of marketing spend, sales activities and results.
“If the marketing or sales department is using a CRM to track all its activities,” Haines says, “the accounting department can look at its results to answer the question, ‘Is it worth it? Is that social media, or that ad in the newspaper, translating into the customers and sales I want?’”
In the end, it’s all about data, which cloud-based software makes it easier than ever to collect, store, analyze and report. “Automated expense report solutions ease the burden of tracking and reporting expenses,” Farrell says. “And in most cases, the ROI is immediate.”
More than one third of small businesses and 44 percent of midsize businesses invested in productivity-enhancing technology or equipment to control costs in 2014, according to the SunTrust survey. Consider talking with your banker about financing options to make a technological investment that can help your business experience the benefits of better expense management.