What is Expense Management?
In the United States, over 600,000 new businesses are opened every year. The report also indicates that there are approximately 30.2 million small businesses in the country. More than 58.9 million people are employed in small and medium businesses. Of all the new businesses launched, only 20% last for more than one year and 50% of those that survive the first year fail within the next five years. Only 33% survive for up to 10 years, and one of the primary reasons why they fail is lack of proper management of funds.
Professional expense management service can help change the tide by helping entrepreneurs make informed financial decisions and plan for the future. The service is offered using online expense management systems that enable the business to process, evaluate employee-related expenses, pay, and plan for the future. All costs including entertainment and travel expenses are included in the system.
Thanks to advancement in technology, the new systems are automated, and all the data is stored in encrypted servers to guarantee the privacy and confidentiality of the businesses.
Why Small- Medium Businesses Need Professional Expense Management Service
Reduce Financial Data Processing Costs
Businesses that are yet to adopt the automated systems and still rely manually create and file financial reports spend $31.4 on the average per report. Experts are of the idea that this figure could increase to $41.12 for rapidly growing medium businesses.
By hiring an accounts payable service provider that offers expense management tools, the company can save costs and leverage the newly generated automated systems and software. You will also be able to process an unlimited number of reports at any given time without breaking the bank.
Guarantee and Reinforce Compliance
Failing to file monthly and annual reports with the relevant government organizations is one of the surest ways of getting your license cancelled. Such an unfortunate turn of events could have a significant negative ripple effect on your business growth trajectory, reputation, and credibility.
The hefty fines you will be forced to pay to get your license back could plunge your business in a financial turmoil, especially during this Covid-19 pandemic. Manually checking all the reports and making sure that everything is captured can take you days or even weeks.
Free up your schedule and concentrate more on other equally important business operations by hiring a company that is accredited and known to have a robust expense management system for businesses. The company will install systems and protocols that resonate with the nature of your business to ensure that it’s fully compliant always.
Saves on Time
Unfortunately, there are still businesses that rely on offline travel expense management systems to manage their operating costs. Employees in the finance department often have to spend hours submitting notes, receipts and sending emails to various departments and individual employees for clarifications.
Such a cumbersome way of managing your finances is detrimental to your brand regardless of its current stage in the growth curve. Having an expense management team on your side from the onset will help safeguard the sustainability of your business.
The team will use their skills and expertise in corporate expense management to automate the processes and carry out audits on your behalf as well as generate reports to help you know if your brand is headed in the right direction. Concisely, the automated systems are unequal to the manual systems as they can comfortably handle large bulks of data and are scalable.
Increases Productivity of Employees
The level of employees’ productivity and focus on business goals and objectives will determine how successful your brand will be now and in the future. By delegating the expenses tracking and management roles to a third-party service provider, the employees will get ample time to work on other tasks.
Your CFO will no longer have to spend a whole day reviewing reports when they should be coming up with plans for the next financial year. By embracing a mobile expense management software, in just a few clicks, the financial expert will be able to review the ready reports from the service provider and advise the management team accordingly.
Accurate and Comprehensive Analysis of the Financial Health of the Business
As an entrepreneur running a small or medium business, it is very easy to get confused with the numbers you see in the company’s monthly financial report provided by the bank. If you are not careful, you might get the illusion that you are making profits and the business is financially stable, when the reality is that it’s on the blink of becoming bankrupt.
The accounts payable service provider has a team of experts who work round the clock monitoring client’s expenditure and generating reports. Having these financial experts in your corner will help you make sense of the report. They will also go an extra mile to advise you on extra what you need to do to generate more revenue and reduce expenses.
For example, they will help you to understand the business’s spending patterns and dive deeper into nifty gritty details that you would have ignored yet have major ramifications on the financial health of your business. All the loopholes that could ruin your business will be pinpointed by the travel and expense management system and sealed to keep you ahead of the curve.
Streamlines Financial Processes
The first thing to note is that as a business owner, there is always the temptation to try and do everything yourself instead of delegating some roles to the other employees. If you don’t delegate, your business will be affected when you are not around to approve the reports.
Delays will demoralize employees and business partners equally if you fail to make payments on time. With a team providing expense management solutions, you can easily avoid such hurdles and streamline financial processes. You will also be able to come up with robust and timeless terms and conditions to govern every process.
Professional expense management service is the secret recipe for success in business as an entrepreneur. The management systems can be customized to suit your specific needs and preferences as the company continues to grow.
Make sure the service provider understands your goals and objectives from the onset to pave the way for informed financial decisions and financial systems that resonate with your brand.
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