5.5 C
London
Friday, December 2, 2022

Why personnel costs are becoming outrageous and how to stop them in your startup?

Must read

SBF says he’s “had a bad month,” but is he really giving us the full story? • londonbusinessblog.com

To get a roundup of londonbusinessblog.com's biggest and most important stories delivered to your inbox every day at 3PM PDT, register here. There is officially...

5 groundbreaking tips to attract top job seekers

Opinions expressed by londonbusinessblog.com contributors are their own. In today's competitive job market, it is more important than ever that your company culture is attractive....

Naked truth from Daniela Bianchi

Who is Daniela Bianchi and where is she today? Wiki bio Daniela Bianchi was born in Rome, Italy, on January 31, 1942, so her...
Shreya Christinahttps://londonbusinessblog.com
Shreya has been with londonbusinessblog.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider londonbusinessblog.com team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

In the current market downturn, startups want to tighten their belts. There’s no more obvious place to start than some of the more, say, replaceable personnel costs.

Could that business trip be a Zoom call instead? Why the Uber Black and not just the regular Uber? Is that ‘client entertainment’ really for the customer?

Staff costs have changed a bit lately. The pandemic blurred the lines between ‘personal’ and ‘business’, with our homes becoming our second (or only) offices and a newfound flexibility becoming the norm. Unless you work for Elon Musk.

With those changes, there is more and more looseness and ambiguity around business spending. According to the recent SAP Concur + Oversight Spend Insights Report, expense violations rose significantly between 2020 and 2021, with “excessive personal spending” rising 21.8 percent. One of the biggest problem areas was mileage – if you’ve ever had to keep a logbook, you’re probably now making an audible groan.

The report suggests that “employees are pushing boundaries where they think they can – spending more on a meal, for example because total spending is lower or spending meals even when working from home”.

Recently, a former CEO of the Swiss banking industry was jailed for putting nearly $307,000 in strip club visits on his business expenses. On top of that, some Tinder dates, dinners and cooking holidays.

While you think big, don’t miss the small things

In the startup landscape, it is crucial not to be distracted by the excitement of scaling, growing revenues and raising capital. As your workforce and overhead increase, so does your expenses — and this can blow right under your nose.

“It is not uncommon for companies to focus on what their core revenue-generating activities are while maintaining the highest cost categories within their operations,” said Fabian Calle, managing director – SMB at SAP Concur Australia and New Zealand. “While businesses feel they understand all of the expenses being processed, small, high-volume expenses can add up to a large portion of processed expenses over a period of time.”

The fastest-rising areas of expense violations have a few things in common: They have less established processes, so there’s confusion about what you can and can’t claim. According to the SAP Concur report, these areas include: cleaning preparation for companies that welcome staff to the office; education expenses; and service provider violations.

However, the usual suspects — air travel, hotel spending and restaurant spending — recovered in the last quarter of 2021. Fabian says expense reports for hotels and motels, car rentals, transportation, airlines and restaurants are the key areas to keep an eye on as we return. are in a more open world.

“It’s generally the small expenses that usually go unnoticed,” Calle says. “It can be difficult to manually highlight such expense items without up-to-date technology that has the ability to intelligently discover those items that are out of trend.”

Discretionary spending is still your friend – just manage it

The solution is not as simple as “stop expensive lunches and parties for customers”. Discretionary spending on things like restaurants, entertainment, and travel has a clear purpose in business.

But how you monitor those expenses is essential. Digital expense management systems are playing an increasingly important role in helping businesses find more efficient ways to settle employee expenses and invoices.

“When considering the right technology to use, it’s also important to have a platform that can access data in different areas of the business, such as travel expenses, employee expenses, and supplier invoices,” explains Calle. “This ensures that there is a complete picture of all discretionary spending.”

Australian and New Zealand brands such as Honda, Red Balloon and The Fred Hollows Foundation use SAP Concur automated expense, billing and travel solutions. These tools provide businesses with real-time data so they can make informed decisions, while streamlining manual processes and improving compliance, reducing the chance of fraudulent claims.

Getting employees on board with these kinds of new processes doesn’t have to feel like a hard hand. The goal is to create a simpler system that people want to use and use anywhere.

“Ease of use is critical to employee adoption,” Calle says. “Expense management tools should have policies built into the product’s configuration to guide employees through what may be in or out of policy before spending.”

You know, like strip clubs and luxury vacations. Strict company.

For more information, visit concur.com.au.

Are you a founder? Watch Startup Daily’s Money Milestones: Founders Making Their First $10k, $100k, and $1M in Revenue webinar:

Money Milestones


This article is brought to you by Startup Daily and sponsored by SAP Concur.

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article

SBF says he’s “had a bad month,” but is he really giving us the full story? • londonbusinessblog.com

To get a roundup of londonbusinessblog.com's biggest and most important stories delivered to your inbox every day at 3PM PDT, register here. There is officially...

5 groundbreaking tips to attract top job seekers

Opinions expressed by londonbusinessblog.com contributors are their own. In today's competitive job market, it is more important than ever that your company culture is attractive....

Naked truth from Daniela Bianchi

Who is Daniela Bianchi and where is she today? Wiki bio Daniela Bianchi was born in Rome, Italy, on January 31, 1942, so her...

Closing arguments begin in the Trump Organization tax fraud case

Closing arguments began Thursday in the tax fraud case against the Trump Organization, which is accused of a sweeping, 15-year scheme to compensate top...