How Bad Practices Can Hinder Your Business Growth
Building a business is a surmountable task and needs vast investments of effort and time on an entrepreneur’s part. Business owners often fall into habits and patterns because of the full scale of effort that facilitates them to handle their day-to-day work. It is entirely reasonable and helps people to reduce stress, but that does not necessarily mean it is good for business.
When you are determined to grow your business, you are more likely to succeed with proper planning and defined goals to achieve them. But it is essential to know about the barriers that can come in between and hinder your company’s growth.
1. Traditional Paper-based Method for Invoice and Expense Process
When you are running a small business, there are only a handful of vendor invoices and expense claims every month. So, approving them is quite an easy task when there is only one manager for approval.
But when your business starts to grow, things start changing. With hundreds of invoices and expense claims per month, you can find paper all over your desk. Also, multiple approvers complicate and prolong the process, especially when employees are out of office or based in several locations. It is quite difficult for the vendors as well as for the employees if the finance department is unable to plan expenditure management sensibly.
2. Losing Data Quickly
It is the age of hacking and fraudulent activities. An automated expense management system ensures that all sensitive information is secured and protected from repudiation for any business. Many business enterprise owners are unaware and do not believe that organizations experience a tremendous financial impact with lost or stolen data. They lack in security safeguards and do not provide staff with proper training on information security.
All businesses need to back up their data regularly, create policies, and install business expense management software to track and monitor networks.
3. Focusing More on Unapproved Spends
While running a small business, it is apparent that you have a tight budget and every purchase you make counts. But as you start growing, this changes. Sometimes employees indulge in individual expenditures, and small investments here and there begin to add up to a considerable amount. Automating the expense management process provides you complete visibility into employee spends so you can control it.
4. Avoiding Market Analysis
Many business owners should invest their energy and time to understand market trends, especially during the initial stages. It includes knowing the competition and ways how a new business can fit into the marketplace. Without a basic understanding and analysis of the market, growth strategy may not match with what is best for the long-run.
5. Lack of Policy Compliance
Official travel and expense policies get introduced but get forgotten with time. Employees hardly check them, and the finance department does not have the time to do anything more than quickly checking expense claims. When your organization grows, this turns out to be a significant issue. Many employees may book out of policy expenses.
Automation can solve this significant problem by integrating policies into the expense management system. Employees can receive an alert whenever an expense is out-of-policy to prevent this. Improved policy compliance across the organization helps prevent inefficiencies.
The Bottom Line
Manual pen and paper-based methods create tasks for employees throughout the business that means more time gets spent on administrative work and less time on strategic work for business development. Outdated systems and policies lack transparency. It means no one gets the complete visibility required to be able to strengthen policies or advice future spend pattern.