Accounting for a staggering 54% of all U.S. sales, the 28 million small businesses in America have quite the stake in today's economy (Small Business Association). So, as a small business owner, it's important to understand market changes and current economic conditions in order to position your company in the most successful way possible. And although small businesses can often feel overwhelmed with growing expense pains, following certain steps can help businesses grow in both return on investment and company size. Consider some of the top tips for managing small business expenses:
- Separate personal and corporate finances: Whether this be enacting a company credit card to keep expenses separate, or opening different bank accounts to differentiate spend. As your company grows, it's often easy to lose track of where expenses are going, yet by keeping organized and implementing an automated expense system, your company has the chance to avoid hidden costs and increase spend insight.
- Cut costs when possible: Although this may seem obvious, as your employee count grows and your budget increases, the task of managing everyone's expenses might seem unbearable. It's important that there is transparency into both fixed and variable costs. But, how you control these costs is what shows a stand-out small business from the followers.
- Monitor and measure performance and analytics: Look into your company's financial performance and make sure to benchmark against previous quarters. As small businesses often grow quickly, it's imperative that you keep track of your company's spending before any errors might possibly arise.
The assumption still stands that small businesses and pen and paper expense reporting go hand in hand. And, many small businesses are still under the impression that they don't need much more than that for their reporting, and that only the large companies need an automated system for expense management. But according to the 2016 Certify's Annual Expense Management Trends Report, with 70% of small businesses still using a manual system to keep track of T&E expenses, there is an immense amount of room for improvement. And, overarchingly, automation can be the key to success in managing small business finances.
In Certify's 2016 Annual Expense Management Trends Report
, after adopting a web-based expense management system, 87% of small businesses experienced 100% ROI in one year or less. Companies were able to see such a successful return for a multitude of reasons, not the least of which is the increased insight into company finances and spend. So, if your small business is in the process of switching to an automated system, or even in the beginning stages of realizing the manual burden, be sure to utilize these tips to stay ahead of the ever changing world of expense management.