6 KEY TIPS TO KEEPING BUSINESS EXPENSES IN CHECK

By Ryan Weidenmiller, CEO and Co-Founder

Ah, expenses. It doesn’t matter what type of business you run. You have them. Every business has to deal with expense management.

Maybe you are a general contractor overseeing a home renovation, and you need more paint or tile to finish the job. You send an employee out to buy it — in some cases with your card — and you’re stuck reconciling the books. Or perhaps you manage a trucking company with drivers across the country. You give the driver enough for gas and meals but what happens in the middle of the night when the truck breaks down? In my case, I’m an entrepreneur with a fast-growing business — Karmic Labs (we introduced DashMasterCard.Com last year). I don’t have time to approve every expense my staff needs to make, but they need to make purchases and fast to keep us growing.

Expense management is a core part of basically every small business and properly managing expenses can be the difference between a company’s steady growth and treading water.

Here are 6 tips I’ve learned to help you you smartly manage your small business expenses:

1. HAVE A POLICY. This may seem basic, but the first step to optimized expense management is making sure everyone in your company knows the ground rules. A key part of growing a business — saving money and earning money — is creating best practices. Expenses are no exception. Studies show that for businesses with travel expenses, as many as 20 percent of expense reports contain at least one item that is non-compliant with company policy. Having firm guidelines make for easier expense management.

2. BUT BE NIMBLE. Like every part of your business, your expense policy should evolve as you grow. Look for ways to streamline your costs — and talk to your employees about it. Zingerman’s is a tasty example — just ask anyone who’s been to the flagship, Ann Arbor, Mich. deli. A wildly successful business, with $60,000,000 in annual sales, Zingerman’s management prides itself on empowering employees. In this article, a line cook told managers they were wasting egg yolks they discarded while making cocktails that could also be used for pastries. Be willing to adjust — so that you can save.

3. TIME IS MONEY. At our company travel is a large cost. Booking travel without admins can take my employees’ time — and can cost us a large chunk of money. While you might think it is cheaper to scour the Internet for low-cost flights, a service like Hyper — a full-time concierge — can bundle your travel needs. Look for solutions that will help you save time AND money.

4. AUTOMATE IT. Again, time is money — and you want to save as much time and money as you can. Technology makes it easier than ever to streamline parts of your business. Companies like Xero, an accounting software solution, helps you do things automatically that might have eaten up valuable time before. You can create regular, recurring invoices and manage your cashflow by scheduling payments. At my company we use our no-cost card solution which allows you to request cards for all of your employees that integrate with our expense management app to automatically log employee expenses, and let you track spending in real-time. When you manage to automate those tasks that you have to do as a business — but don’t generate the revenue — you free up more time to focus on what does create your revenue.

5. CREATE A CULTURE OF TRUST. You want your employees empowered and embodying your best entrepreneurial spirit. Studies, like this one show doing so creates real, tangible value. Some of the biggest, most successful companies, like Google, have a culture of empowerment. At our company, I put all our employees on our cards and the vast majority — all of my management team and most employees — are also made administrators so they can approve their own spending. I’ve found this actually holds employees more accountable as they have to approve their costs before they spend. We all share one expense account so we hold ourselves accountable.

6. BUT VERIFY. Through Dash, I can monitor employee spending in real time. I get an automated daily spending report every morning. I only move a certain amount of money to the account for expenses. This keeps everyone in check but I don’t have to do it constantly. You don’t want an employee to feel like they need to ask permission to do their jobs. That can take up tremendous bandwidth on all sides. But the best businesses audit their practices, if for no other reason than it allows you to look for areas where you can save. And mistakes and fraud definitely happen. Studies show one “fraudster” can cost your company thousands of dollars. Use technology to make it easier for you to audit your spending and track it with your goals and you’ll soon see results.