Small business owners face a variety of challenges and opportunities in their business, seemingly daily. From rapid growth opportunities that require quick action, to the constant management of employees, resources and inventory – running a small business can often feel like two or three full-time jobs at once.
A major part of running a business in any industry is the ongoing management of cash flow and expenses. In fact, 40 percent of small business owners say that bookkeeping is the worst part of owning their own business, and the time, cost and complexity are major roadblocks to a more successful experience1.
Shockingly, as of 2017, nearly 65 percent of expense management systems in use by small businesses were still manual operations, including use of Excel spreadsheets, pen and paper, homegrown systems or a combination of those practices2. This approach can lead to a high potential for human error and fraud, not to mention increased inefficiencies and time when compared to web-based or other digital expense-management offerings.
But there are other options. Powerful technology solutions that were once reserved for enterprise-level organizations (and budgets) are available to small business leaders that quickly create efficiencies in their business operations and alleviate a variety of headaches. With the rise of online and mobile expense management systems as an affordable and approachable solution, these tools can provide several key benefits:
Smart budget management and planning
Of the small businesses that close each year, 82 percent of owners cite poor cash flow management skills and a poor understanding of cash flow as the number one reason for their failure3. Manual management tools, planning resources and tracking options are cumbersome or lack some of the core features that lead to success. Features like automated expense reports, expedited payments or reimbursements for travel, day-to-day office expenditures or per-diem, and a host of other payment and expense tools are available for small business managers at the tip of their fingers.
By tapping into online and mobile applications, owners can integrate payment accounts, bank accounts and accounting/bookkeeping software to enable a big-picture view of business expenses. In doing so, decision makers can track and forecast expenses, better plan for tax payments, and make more informed decisions about growth and investment opportunities.
Reduce errors and protect against fraud
There are two big issues associated with manual or homegrown expense management resources: human error and fraud. The financial and resource implications of either one can crush a small business, but many problems are preventable, and owners would do well to insulate their investment by minimizing errors and opportunities for fraud.
We all know that computers are better at math than humans, but they can’t help us track or reconcile what they can’t see. Small businesses solve part of the problem by using digital bookkeeping systems like QuickBooks, but if they’re still paying expenses and payroll with paper checks, handing out a lot of petty cash, or getting paper bank statements, there remains a disconnect and opportunities for error and fraud are big.
Pulling the entire operational budget management into an electronic platform opens more opportunities for checks and balances that can prevent fraud and catch manual errors. Streamlining these processes also saves time and lots of it – on the front end of the expense and reconciliation process, but fewer errors means fewer resources put toward fixing mistakes and the one thing many business owners want more than anything – more time.
Manage on-the-fly, and on-the-go
On average, the use of mobile technologies can save small businesses more than $6,000 a year in time and expenses3. As business becomes increasingly mobile, having the flexibility to manage budgets, analyze costs and submit expenses from your phone or laptop, anywhere around the world, is becoming a nearly mandatory tool in the pocket of small business owners and managers.
The rise of cloud computing as a safe, fast and stable technology means that systems and software sync on-the-fly, regardless of location – allowing business leaders to both see and take action from anywhere. By tapping into an online expense management system, funding key expenses from the road is simple. Gone are the days of slow invoicing, or a scramble to cut a check in a hurry. Everything from approving and distributing payroll to reimbursements and vendor payments can be done from anywhere.
Electronic tools like expense cards and online expense management platforms can provide a high level of control for small business owners to manage budgets and direct how and when expenses are incurred. On top of that, digital expense management tools are increasingly affordable, accessible and user friendly, giving small business owners and managers an opportunity to streamline a major – and time-consuming – part of their operations.
By tapping into digital and mobile tools, small business leaders can cut down on their time spent on expense management, increase productivity, make decisions based on real-time analytics, and eliminate key issues such as fraud and human error.
1. Score.org, January 22, 2015, “2015 Small Business Accounting and Taxes” https://www.score.org/resource/infographic-look-accounting-and-taxes
2. Certify, December 1, 2017, “2017 Expense Management Trends and Benchmarks” https://www.certify.com/2017-Travel-and-Expense-Trends-Report.aspx
3. Preferred CFO, March 8, 2017, “Cash Flow: The Reason 82% of Small Businesses Fail” https://www.preferredcfo.com/cash-flow-reason-small-businesses-fail/
4. AT&T, May 14, 2014, “AT&T Small Business Technology Poll” http://about.att.com/story/survey_finds_mobile_technologies_saving_us_small_businesses_more_than_65_billion_a_year.html