Proactive spend control that is quick to implement and adjustable for remote teams can help to minimize a downturn’s negative impact on the business and its bottom line. In our guide “Control in a crisis” we covered four spend management strategies that companies can implement in real-time:
Lock down spending
Over-communicate with your team
Reforecast and defer costs
Increase accountability and responsibility
As a supplement to our guide, we’ve created a 16 step checklist that organizations can follow immediately to start using these strategies today. This checklist will be helpful for business owners of small businesses and financial controllers responsible for business spending in larger organizations.
Adjust your requisition and approval process
Lower limits of purchase order approval authority.
Consider designating the CFO, Controller, or CEO as the final approver on all requests, especially employee spend.
Increase visibility and regularly review spend
Develop new processes to analyze budget-to-actual variances based on users, accounts, and departments. Schedule regular meetings with business units to discuss differences.
Strategically replan and reforecast
Prepare new forecasts for all the departments. Develop “worst-case” and “best-case” scenarios and update your break-even analysis.
Make adjustments to workplace policies. Switch from full time to remote work comes with a lot of planning. Re-evaluate payroll, expense management, upcoming software subscription renewals, and remote working models.
Defer costs and control cash outflows
In modern businesses, purchasing is happening through many channels; purchase orders, credit cards, employee expenses. Review significant budgeted business expenses and change credit card policies. Identify what travel and expense can be shifted to the next quarter or fiscal year.
Over-communicate with the right digital tools
Invest in conferencing platforms to uphold connection and community. Keep team members engaged by being transparent. Communicate the new expense report workflows.
Everyone is facing new challenges and figuring out how to survive the developing economic downturns due to the COVID-19 pandemic. Hence, many businesses will be focusing on basic survival instead of growth. Some teams are fully remote for the first time. As a result, people are facing the challenges of communication and visibility that come with a distributed team. Finance and operations teams will be tightening their belts, looking for ways to stretch budgets and to cut unnecessary spending.
Above all, wisely managing how cash is flowing out of your organization is now crucial.
Looking for more guidance on controlling costs? Read our guide “Control in a crisis” where we cover four spend management strategies to help companies minimize a downturn’s negative impact on the business.