Small business owners are increasingly scrutinising the behaviour and productivity of their employees in an attempt to save money, according to a new study.
Software solutions provider IRIS Exchequer Accounting Software recently surveyed more than 150 financial professionals about their cost-cutting plans for the future.
According to the survey, 69% of organisations are looking to put in place a more stringent enforcement of their staff expenses policy as a result of current economic uncertainty.
Nine out of 10 firms are also implementing much tighter controls over purchasing procedures, with 53% scrutinising timesheets in more detail.
IRIS Exchequer product director Paul Sparkes says many organisations are under “immense pressure” to look for further savings in order to cope with current economic challenges.
“By getting an accurate picture of purchasing and exactly where staff are spending their time, managers can better understand their business and make more informed, strategic decisions,” Sparkes says.
According to company spokesperson Rupert Ralston, the figures are much higher than expected, with many growing firms failing to put the correct procedures in place to handle staff expenses.
“If the owner or manager is no longer processing the employees’ time sheets and/or expenses, then the person in charge may not have a clear idea of which expenses are company-related and which are personal or out-of-policy,” Ralston says.
According to Ralston, businesses need to have instant access to critical information on employees’ timesheets and expense claims, which can be achieved online.
“The efficiencies of doing this all online mean they are received instantaneously via email,” he says.
Ralston says businesses are attempting to rein in their spending as a result of slow GDP growth, price-conscious consumers, domestic and foreign competitors, and online competition.
“Businesses with the leanest overheads are in a much better position to weather these factors and prosper [so] start-ups are far better placed then regular businesses in controlling costs,” he says.
“The owner is the driving force and is usually able to spot any discrepancies… However, they need to watch out for creating a culture of frivolous spending among staff in their effort to get their business off the ground, marketed and rack up sales.”
“Start-ups incur a high volume of new and non-regular transactions unlike an established business, which may have the same monthly established contracts, time sheets and expenses.”
“Keeping an eye out for unnecessary spending is important to all businesses but it just gets harder from the day you hire the first employee.”