Accounting Software 411 - Stop Leaking Profits: Best Practices for Establishing Company Spending Policies

Stop Leaking Profits: Best Practices for Establishing Company Spending Policies

Product Name:	ExpenseWatch Spend Management by ExpenseWatch
Download Type:	White Paper
Format:	.PDF
Published:	2/26/2008

Description:
Call it the yin and yang of a thriving small or midsized
business. Company executives are focused on two primary areas: Growing revenues and managing expenses.

Whether business is booming; growing at a manageable rate; or facing challenges because of uncertain economic times, top executives know that without oversight and involvement, spending can easily spiral out of control.

Consider the spending habits of many small and midsized companies. Spending occurs in every aspect of a business. It is not uncommon for individuals, departments and offices to purchase the same items from multiple vendors at varying costs, wait until the last minute to obtain airline tickets and submit expense reports with questionable items.

The finance team continually reminds everyone about obtaining approvals for purchases and booking travel through the preferred provider. But no matter how hard finance pushes, it seems as if the sales force thinks the Four Seasons is the only hotel in New York and employees continue to buy office supplies on an ad-hoc basis without care about costs.

One of the best ways to stop the seemingly endless cycle of unapproved and over-the-limit expenses or to empower more people to spend on behalf of the company without fear of losing control is to establish company spending policies. Without them, it is difficult to set boundaries and create controls, much less enforce them.

As every business matures, there comes a time when the need for spending controls outweighs the apprehension and the anticipated resistance to change that imposing policies may produce. The good news is that much of the concern about building company spending procedures can be avoided with a few strategies to support the process, as outlined in this paper.

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