Proactive spend control that is quick to implement and adjustable for remote teams can help to minimize a downturn’s negative impact on your 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. These strategies include:
- Lockdown spending
- Over-communicating with your team
- Reforecasting and deferring costs
- Increasing accountability and responsibility
As a supplement to our guide, we’ve created a 16 step checklist that your organization can follow. This checklist is helpful for small business owners as well as financial controllers in larger organizations.
Here is a sneak peek of what we cover in the 16 step checklist:
Adjust your requisition and approval process
Firstly, lower limits of purchase order approval authority. For instance, consider designating the CFO, Controller, or CEO as the final approver on all requests, especially employee spend. This will vastly improve and allow you to control company spending.
Increase visibility and regularly review spend
Secondly, develop new processes to analyze budget-to-actual variances. This will be based on users, accounts, and departments. In addition, S=schedule regular meetings with business units to discuss the differences.
Strategically replan and reforecast
Thirdly, prepare new forecasts for all the departments. This will help you develop “worst-case” and “best-case” scenarios. After that, update your break-even analysis. Additionally, make adjustments to workplace policies. Switching from full time in the office to remote work takes a lot of planning. You should re-evaluate things like 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
Finally, invest in conferencing platforms to uphold connection and community. Keep team members engaged by being transparent. Communicate the new expense report workflows.
It’s clear that everyone is facing new challenges and figuring out how to survive this 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 crucial.
With this in mind, if you’re looking for more guidance on how to control company spending read our guide “Control in a crisis”. In our guide, we cover four spend management strategies to help companies minimize a downturn’s negative impact on the business.