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Bad habits that can stunt business growth

Bad habits that can stunt business growth 

Business growth is best achieved when a company has a solid plan with ambitious, yet realistic targets and measurable goals. Small business owners often focus on the plan and the goals, without paying much attention to things that could be barriers to this growth, especially within your own business. Business owners should ensure they are considering the full picture, including potential barriers, in order to maximize growth potential.

Three examples of bad habits within an organization that can stunt business growth include: unapproved spend, policy compliance and paper-based expense and invoice processes.

Unapproved Spend

When your business is small, and you only have a handful of employees, everyone knows that finances are tight, and purchase decisions are made carefully. But as you grow and revenues increase, this changes. Even when your employees are budget-conscious, small purchases here and there do happen, like team coffee for a meeting or a last-minute taxi when you’re running late. If you don’t have someone who can dedicate enough time to carefully scanning and vetting each purchase, these small and unapproved purchases can really add up.

Automation can really help small businesses get visibility into unapproved spend and control it. It might give you insight into how much is being spent on snacks for the office, or on a certain type of transportation. The visibility enables you to set guidelines and manage this spend moving forward.

Policy Compliance

In a small business, policies are often written and then forgotten, as employees are focused on moving the business forward. Travel and expense policies are no exception. As your business grows, it’s common for employees to forget about spending policies, and finance teams to only have enough time for cursory checks on expenses and invoices. If no one is looking at every expense or invoice, how can you be sure your employees are being compliant?

Automation can solve this problem by embedding policies in the system. With automated travel booking tools that ensure employees book within policy, “set it and forget it” doesn’t mean forget the policy and book however you want, it means the tool monitors for you to alert any out of policy bookings. Employees can be prevented from booking out of policy at the source, or managers can automatically get an alert to approve any out-of-policy spend.

Paper-based expense and invoice processes

Eighty-eight per cent of Canadian companies are still using some level of manual and paper-based finance processes. When you’re small and there are only a handful of expenses and invoices to approve each month, tracking down the right person for sign-off is easy because there’s usually only one person who needs to approve – the boss.

As businesses scale, this simplicity can turn into complexity. More employees and more suppliers mean there can be hundreds of expense claims and invoices a month. With multiple people now included in the approval process, tracking them down becomes a greater challenge. Once you add in multiple office locations, expense reports – with original purchase receipts included – get lost in the clutter more than they should. When the expense process takes weeks, employees are more likely to sit on their expenses for months at a time, making it difficult for finance teams to accurately track spend and cash flow.

Moving to an automated solution can drastically improve this process. When expense receipts can be captured and included in a report simply by taking a picture of them, or when invoices are automatically directed through an approval workflow, it saves time for all employees, and can save your business money, too.

The Common Theme

What do all these bad habits have in common? They all centre around your business’s finances, and they all demonstrate why your finance team is essential to business growth.

When bad habits prevail, cumbersome paper-based processes create extra work for everyone, so less time is spent on work that can drive the business forward. Policies and systems that lack transparency or a streamlined approval process mean money can slip through the cracks, and no one has true visibility into the overall spend.

However, when business owners consider these bad habits, and develop processes or adopt tools to combat them alongside the plans and goals for the business, they can truly maximize their growth potential.

Brian Veloso, Head of SMN, SAP Concur Canada.

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