Overview: Easy tips from a professional accounting firm to help you keep track of where your company’s funds are going.
Do you know where your company’s funds are going? It might be easy to think you know, but the last thing you want is for company funds to be unaccounted for. We’ve curated the list below for your convenience, so you can have a starting point to tracking company funds without feeling overwhelmed.
7 SIMPLE TIPS TO TRACK COMPANY SPENDING:
- Create a budget.
- Hold employees to the budget. Make sure employees know, understand, and abide by the budget. In fact, anyone with access to spend should know how much they are allowed to spend and what the parameters are around spending.
- Control the amount employees can spend. This isn’t excessive – think of it as necessary. And it can be done by restricting the amount available on company cards. Softwares like Divvy can be helpful with these controls.
- Review expenses regularly. Don’t think of this as a chore. Reviewing expenses might not be fun, but it’s the difference between having enough funds for the company, and not. We recommend having a designated person on the team to be in charge of this because it needs to be done on a regular basis (monthly, not just once or twice a year).
- Have an approval form in place and a Standard Operating Procedure (SOP) for company spending. When employees are able to make purchases without any procedure in place, things get out of hand quickly… trust us. Approvals can be a financial life saver.
- Require expense reports to be submitted regularly so you can catch overspending right away.
- Use the right tools.
3 AREAS YOU MAY BE WASTING MONEY/OVERSPENDING:
Make sure you manage your inventory well. Unsold inventory leads to waste and can be very expensive. Have a problem with waste? Talk to one of our Lean Six Sigma experts they can help you reduce waste in your company email@example.com see this blog for more information on LSS https://smcocpa.com/update-lean-six-sigma-helped-us-it-can-help-you-too/
- Separating cards… or not
Often, Single Member LLCs fall into the trap of either putting everything on the company card or everything on the personal card. Either way, this commingling is bad for your pocketbook! Be sure to have separation of company expenses and personal expenses.
- Managing problem employees
a. Have a clear expense policy
b. Is it a one-time mistake or a recurring problem
i. One off – communicate to the employee and clarify expectations
ii. Reoccurring problem – might call for an investigation to ensure the employee is not stealing
HELPFUL TOOLS TO TRACK SPENDING – DIVVY:
There is a lot of software available to help with spending controls. We mentioned Divvy earlier. This is a product that we use to help us with controlling spending.
With Divvy, we can set budgets for each employee and track their spending in real time. The cards are all controlled via a web platform, and at any time we can change an employee’s budget or freeze their card.
This has saved us the hassle of setting up cards with the bank.
Employees can also request expense reimbursements through the app and once approved the reimbursements go straight to their bank account. Our employees love this because they no longer have to wait till pay day to request their reimbursement. Instead they can do it on their own time.
The best part is that this solution is absolutely free.
If you think this would be a helpful option for your company, click our partner link below for a demo of the software:
– Hannah Baldwin, PAFM, SHRM-CP, Lean Six Sigma Green Belt