Growth can be elusive, even at the best of times. But it is a crucial factor in furthering the success of your business. A new year is a perfect time to make some changes to your business, so here’s some advice on streamlining your finances to spur growth in 2020.
1. Know your numbers
According to recently released ONS data, fewer businesses failed last year than the year before. If we want to see this upward trend continue, we need to understand and guard against common factors that hurt small businesses. One of the largest killers of small businesses is poor cash flow – especially in times of economic and political uncertainty. When times are tough, it’s much more likely that a financial hiccup will send your business into a downward spiral.
While many small businesses owners are well aware of the money that’s coming in, it can be challenging to keep track of what’s going out. There are so many different areas of company expenditure – rent, expenses, payroll, taxes, and countless other costs – that it can be hard to keep on top of it all. However, a clear-sighted overview of finances can empower companies to take control and make smarter decisions.
Fortunately, real-time insight into company spend is no longer exclusive to giant corporations. Tech innovations mean that companies of all sizes can manage to spend effectively, which is the first step to growth.
2. Trust and transparency
Companies which demonstrate respect and trust for employees will see a happier, more dedicated workforce. And that means higher productivity and stronger growth. Company spend is a prime example of an area where companies can shift toward a more trusting and more empowering system.
Employees are adults, and they are treated as competent, responsible professionals in most parts of their job. So why do many companies continue to micromanage spending? A solution is to offer pre-loaded cards for business expenses. This gives employees autonomy when it comes to spending while still allowing the company to put limits in place and check where the money is going. This gesture of trust can have a significant impact on employee happiness and subsequent productivity.
3. Improve your admin
This also solves another problem – the sheer amount of time spent logging expenses. The expense management process for many businesses is still firmly stuck in the past, taking far longer than other administrative tasks, many of which have been updated for the modern world with time-saving apps and software.
Research has found that the average employee spends 20 minutes every week submitting expense claims. Cumulatively, across all the SMEs in the UK, this adds up to 1.4 million hours a week or 189,146 working days. Twenty minutes may seem like a short amount time, but it all adds up – and it’s time that could be put to better use elsewhere.
The same study also found that many employees often pay for business expenses out of their own pockets, to avoid lengthy and complex expense claim processes. Moving to a trust-based system saves employees both money and time, as well as offering increased convenience for the business.
Fewer time managing expenses means more time to perform other, more productive tasks that contribute to the company’s growth.
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