Did you know that it’s said Jeremiah Colman, who founded a mustard empire in Norfolk more than 200 years ago, always claimed that his profit was achieved because what his customers threw away; that little smear of fiery yellowness left at the edge of the plate after the meal was finished?
And did you know that, as a general rule, elections are decided by those small groups of people known as floating voters; those who switch their allegiance from party to party at each election, and by doing so tip the balance in favour of one party or another?
Think of it for a moment; both of those diverse examples go to show that the devil is in the detail, which is where success or failure are achieved; where business dreams might turn to dust, or where you win the right to carry on for another year of gainful employment.
And in business it all comes down to money, how good an expense manager you are. There are two things to be aware of here. The first is that diligence is required in the use of any expense management system. It’s a waste of time trying to change something if you’re not able to monitor it, in this case with some business expense software that’s simple and easy to use.
These days the right solution is likely to be a cloud based expense management software apps that categorise and collate all spending, allowing you to output the results to your accountant or simply an Excel spreadsheet for your own use.
But there’s a need to get forensic in the things you should be recording with your expense manager app. Colman didn’t have such technology of course, which gives you an edge on him. Think about everything you spend in your business, even if it doesn’t appear to involve money – because it surely will, somewhere down the line. Here are some thought-starters you might like to put your expense tracking software to work on.
1. Put that light out! And turn the computer off as well. How much of your energy bill goes on heating and lighting? Don’t know? It’s time you did. Check the bills, which might be a good wake-up call. Turn lights off when there’s no-one in, and do the same with computers. I know of one senior employee who left his computer turned on for several years, even when he was on holiday. He didn’t care; it wasn’t his company. But if it’s yours, perhaps it’s time to check that your employees aren’t squandering your money on unnecessary energy. And turn the heating thermostat down a degree too.
2. Ditch the company car. In the UK it’s probably more tax-efficient for small business owners to use their own cars for business, rather than buying one on the company – because it’s probably a perk you can’t afford under your new online expense management regime. HMRC is good at allowing mileage expenses at 45p a mile for cars and vans. And shop around for the best fuel prices too. Even a few pence a litre will add up over the year. Your expense tracker app will record it all for you, so you can see cumulative savings accrue. (and don’t forget that if you’re running a small fleet the savings are multiplied, and could grow even bigger if you take on a fuel card system to pay).
3. Tout around for tariffs. Are you on the most economical tariff for your company electricity, gas, or telephones? It’s usually worth checking for alternatives – and before you say you’re too busy, think of it in time invested in money management. I know of a company that saved a little more than 40% on its energy costs with a couple of afternoons’ work. Taking the saving over a whole year, that was the best hourly rate the owner had ever achieved – by a country mile. And as far as phones are concerned, look into hosted systems based on the power of broadband. If you’re doing online expense management, why shouldn’t your phones run the same way?
4. Do you need the fancy office? Ask yourself if your rented office space is a necessity or a luxury. Even that hot desk could cost several hundred pounds a month, which you have to earn before you start making anything at all. And what does the commute cost, in time as well as money? Add the costs together and you might find working at home is a more cost-effective expenses option, quite apart from having more time for other stuff.
5. Go green Seeking out ways of recycling rather than sending them to landfill can be lucrative. Landfill tax has climbed beyond £80 a tonne, and showing no signs of falling! Look at your own waste streams and consider what might be recyclable, or of value to someone else. They might even come to take it away for nothing, if it’s a cheap option for them. And think about this – according to waste prevention charity WRAP the real cost of waste could amount to 4% of a UK company’s turnover. That’s a big and avoidable balance sheet hit.