Cash flow is increasingly a top priority for most small businesses and many are looking at how to optimize it by getting a better handle on managing employee spend. If you can approve, monitor, and analyze all of the money being spent in your company in real time, you know exactly how much cash you have on hand. This in turn lets you keep your business running even in a highly changing environment by allocating cash to new or different business priorities.
However, properly managing the vast array of expenditures that make up employee spend can lead to a huge drain on time and productivity. Understanding how to simplify the process of spend management and implementing the right tools can help improve not only cash flow but also the general productivity of your employees.
Big-ticket expenses such as rent, equipment purchases, and salaries are generally well managed. For these types of costs, the amount doesn’t change much, so companies can better plan for and manage them. It is easier to prioritize funding, negotiate better rates, and cover these expenses with cash injections when needed. Challenges arise with the remaining part of a company’s total spend, the tail-end spend. This part is not as easy to plan, it varies in value from one item to the next and changes in times of economic and environmental uncertainty.
Often, tail-end expenses are not even visible to finance until the expense hits the books. At this point, it’s too late to do anything about finding a better deal, negotiating a better rate, or even deciding if it should have been spent in the first place.
Although the value for each of these items may be small, taken as a whole, they represent a significant spend category. It’s important to better manage it to improve your cash flow. Because those expenses are spread out over many vendors, or are made ad hoc, business leaders can rarely manage, record, and analyze the business benefit of that spend in a timely or efficient way. Additionally, while employees are spending time purchasing goods and services, they are not focused on doing their job to add value to your company.
To keep up, a simpler, more automated, and consolidated approach is needed to efficiently plan, purchase, report, review and manage employee spend.
Neo1 is also a free-to-subscribe employee spend management platform that helps manage all employee spend in one place from budget requests to approvals. It also centralizes purchasing with integrated Amazon Business, including receipt capture and reconciliation.
Register now to set up your business for the free-to-subscribe service. It only takes five minutes to set up and you can start getting a handle on your employee spend right away. https://app.neo1.com/signup