Controlling costs and tracking expenses is crucial for individuals and businesses alike.
Whether you’re looking to save money, increase profitability, or simply gain a better understanding of your financial situation, implementing successful strategies for cost control and expense tracking is essential.
In today’s edition of Let’s Talk, we will explore some proven ways to effectively manage costs and track expenses. So let’s dive in and discover the secrets to a more financially secure future.
Scott Wiltshire, Vice President and GM ANZ, Oracle NetSuite
“Cash flow is vital for any business, and managing costs and expenses is one of the best ways to get a handle on it. Adopting effective business processes and using financial management software can help to control costs, track expenses, and improve overall efficiency.
“Vital to the operation, is the ability to identify key cost centres and understand where the money is being spent. With a solid grip on cash outflows, business leaders can ensure budget is allocated to mission critical activities, as well as those generating the greatest return on investment. By prioritising these higher value investments, it becomes easier to identify where costs can be cut. Using integrated business management software helps to create a single source of truth and enables leaders to make informed decisions on where to allocate capital and make investments.
“Investing in an expense management solution can also be helpful to keep track of the smaller, incidental expenses, which can quickly add up. It also enables businesses to easily track and control disbursements, and ensure expenses are compliant with the company’s financial policies. By centralising all expense transactions and managing approvals, businesses can maximise the accuracy, timeliness and simplicity of the entire expense process.”
Will Buckley, Country Manager, Australia, Xero
“Understanding your cash flow is essential to running a healthy and profitable business. We know cash flow stress is a major pain point for Australian small businesses, with recent Xero research showing that 60 percent of small business owners have experienced cash flow issues in the past year.
“Leveraging technology is the most effective way for business owners to track and manage their cash flow in real time. Cloud accounting software enables business owners to track their spending and submit expense claims on the go. Connecting your accounting software with your bank can also save an abundance of time, automatically inputting transactions to make reconciling your accounts quick and easy.
“A clear picture of your financial position means one less thing for small business owners to worry about, and helps with critical business functions — like knowing how much cash you have to pay yourself and your staff, or how much money you can put aside to buy new equipment or inventory.”
Mollie Eckersley, Operations Manager ANZ, BrightHR
“The answer to controlling costs and tracking expenses successfully, especially for small businesses, is the same answer to many business challenges in the 21st century. The right software can change everything. It’s the only way for small businesses to gain an overview and maintain visibility without spending hours doing so.
“Once you’ve centralised expenses and gained this visibility, you can identify spending patterns and trends, so you’ll know what steps to take to change that trajectory.
“A lot of the time, small business owners take the old-fashioned route for certain aspects of the job especially when their teams are small. But this is a sure-fire way to slow down your growth. If you’re dealing with piles of paper receipts, gathering information from multiple sources, and manually tracking expenses, how much time do you have left to control those costs? Probably not enough.
“Digitalising the little things like expense tracking lets you add value to everyday operations, and that’s how small businesses grow sustainably.”
Andrew Rossington, Chief Product Officer at Teletrac Navman
“Keeping on top of everything is a necessary but challenging part of working in the service industry. From mechanics, cleaners, plumbers and electricians to computer services, restaurant deliveries, tourism operators and healthcare providers, business owners and managers need to understand when, where and how teams are operating at all times.
“Fleet management solutions give you the tools to streamline your entire business, not just one area. Reporting tools give you insights into operational trends, costs and expenses and how they impact your bottom line. Schedule reports to be delivered directly to your inbox and instantly identify inefficiencies that are costing you time and money.
“Reduce the risk of breakdowns and eliminate last-minute trips to the mechanic by setting up maintenance schedules and receive alerts when a service is due.
“Build your own custom solution of in-vehicle technology designed specifically for your needs. Providing valuable data that helps you make informed business decisions, Teletrac Navman solutions present a range of ways to help your business streamline and grow.”
Angela Vithoulkas, Business Consultant, Angela Vithoulkas
“As a hands-on business owner, it’s natural to feel conflicted at times between your vision and the financial realities, but it’s important to focus on profitability and financial stability.
“One key realisation is that sales alone do not equate to profit or success. It’s essential to delve deeper into the metrics; this involves analysing costs, negotiating better deals, and improving productivity to eliminate waste.
“To effectively control costs, review expenses on a weekly and monthly basis as it allows you to make informed decisions and take action promptly, including identifying and addressing waste before it becomes a financial burden.
“Evaluate the performance of investments or new hires. While the return on investment may not always be immediate, positive changes in processes or productivity can eventually lead to increased profits. Consider the long-term benefits.
“As the business owner, take a keen interest in understanding where, who, and why money is being spent. Don’t solely rely on your team to manage relationships; being actively involved in financial matters, you ensure that your resources are used wisely and efficiently.
“Moreover, exercise caution when granting access to company funds and making payments. Implement stringent controls and security measures to minimise the risk of fraudulent activities or unauthorised transactions.”
Andrew Ward, Chief Risk Officer, Banjo Loans
“Controlling costs is all about getting the fundamentals right.
“Start with accounting software (preferably cloud based) that meets the specific needs of your business. For example, if you have two staff, you won’t need a payroll module, so it’s all about knowing what software modules work for your business.
“At the same time, most software has great analytical tools to gain oversight of, and drill down on, your costs – so make sure you use them.
“The next step to use an expert, such as a broker, accountant or lender to assist you through your financial decision making.
“In terms of costs, set your financial goals overall and track these on a periodic basis, depending on your business needs.
“It sounds obvious but know how much it costs to produce your product/service, so that you can make an appropriate profit for the risks you are taking in running your business.
“Your team may also have some great ideas around saving money, of which management may not be necessarily aware.
“Finally, avoid paying a ‘loyalty tax’ to suppliers and regularly shop around for a better deal in respect to your major costs.”
Dunya Lindsey, CXO and CPO, Wiise
“As businesses grow, digitising expenses and processes is crucial to making sure all business expenses are tracked – and in detail – and that operations are as efficient as possible. This will give managers the insights they need to control costs, maximise profitability and make the most of their most important resource – people.
“In the early days, many businesses start by simply recording their expenses in their P&L and making ad hoc payments as they go to ensure operations keep running, orders are fulfilled, and their people get paid. However, this can make it challenging to track the true cost of goods, cost of sale, and margins by product line or customer. In addition, operational processes tend to grow organically over time as new customers, products or services are added. Often, managers simply don’t have the time to review workflows to make sure their operations stay efficient and their people are best deployed.
“Investing in more sophisticated technology like Enterprise Resource Planning (ERP) software can help solve these issues. The ability to track more detailed costs, for example, down to individual jobs, products, import, distribution or manufacturing costs, allows businesses to see profitability more clearly and make better decisions about where they invest their efforts and capital.
“Because ERPs integrate a range of different business processes in one system – inventory, accounting, payroll, manufacturing, service and customer management and more – businesses can streamline their operations and eliminate inefficient and tedious processes like manually transferring data between systems. This not only frees up their people to do more impactful work that increases revenue like sales or customer care, but allows managers to have real-time access to business data and see exactly what is happening across their business at any time.”
Siva Subramaniam, Management Consultant and Director of Business Development at NEARSOL
“Maximising Efficiency and Cost Savings in Customer Service Operations through Outsourcing and Offshoring
“Running Customer Service Operations is often considered a cost centre, prompting companies to explore various approaches to manage expenses effectively. Outsourcing and offshoring have emerged as successful strategies, delivering cost savings and improved customer experiences. Some key insights:
- Outsourcing Benefits: Outsourcing to experts enables process improvements, reducing staff costs, and enhancing customer satisfaction.
- Offshoring Advantages: Offshoring offers rapid cost savings, with Australian companies averagely saving 60%-70% on labour costs.
- Key Success Factor: Enhance in-house operations before outsourcing, fostering continuous improvement and successful collaborations.
- Data Security and Control: Outsourcers prioritise data security through robust cybersecurity initiatives.
- Retaining Control: Stringent Key Performance Indicators (KPIs) ensure outsourcers meet expectations. Clients have the option to exit if improvement is not achieved.
“Australian companies can control costs, enhance efficiencies, and deliver exceptional customer service in today’s competitive landscape.”
Dhanush Ganglani, Managing Director, Eden Exchange
“In the current economic climate, the significance of cost control and expense tracking for businesses cannot be overstated. Whilst there are many ways to do this, we find the following make the biggest impact:
- Budgeting: This is a given, however, creating a well-structured budget allows you to plan and allocate resources wisely. Regular reviews and adjustments are a must. This ensures your budget continues to align with your financial objectives.
- Leverage tracking tools: Consider using expense tracking software to streamline the process. They’ve come along way and can now provide real-time insights into your spending patterns and highlight areas that may require cost reduction.
- Negotiate: We’re all in this together. Negotiate with suppliers and vendors to secure favourable terms, discounts or bulk purchase benefits to reduce overall expenses.
- Work with experts: Seek guidance from industry experts and consultants who can provide valuable insights and strategies tailored to your specific business needs. At Eden Exchange, our extensive network of experts provide valuable insights, advice and best practices for cost control across different sectors, empowering businesses with the necessary information to optimise their cost management strategies.”
Chris Dahl, Co-CEO at Pin Payments
“Controlling and tracking costs is absolutely vital as an SMB and can be the difference between financial success and ruin. Relying on outdated methods like paper-based receipts, invoicing or tracking can lead to human error and costly mistakes. The first step you should take, if you haven’t already, is to implement digital tools to assist with running your business. The second step, to get the most out of any tech or programs you’re using, is to find ways to optimise your operations and reduce time on repetitive tasks. There are also many new tools you can discover online which harness AI to save you time and money on admin-related work.
“Software solutions and tech can help with accounting, payroll, inventory management, and expense tracking, providing real-time insights into your financial situation. Embracing tech is one of the best ways to control costs and effectively monitor your expenses, it may even highlight ways to cut costs, ultimately saving you money.”
Ben Lamb, Chief Commercial Officer of Prospa
“The rise in essential costs for SMEs such as energy bills, rental leases, and materials means having a strong cash flow strategy in place is critical. The good news is, there are plenty of ways to keep the financial health of your company on track. Here are four handy tips to help make the most of the new financial year:
- Get smart with your invoicing: Have a disciplined approach to keeping the books up to date, prompt invoicing and clear payment terms so payments are made in good time.
- Review business budgets and reduce overheads where possible: Spend wisely – review any technology and software subscriptions, stay on top of stock management, and consider the potential return of any expenditure.
- Use an accountant: If keeping track of revenue and expenses is proving tricky, consider hiring a professional to assist you in understanding the cash flow impacts that your business may face as the new financial year begins.
- Save: It might seem like saying the obvious, but if your business has a cash reserve to fall back on during challenging times – such as the past few years – you won’t regret it.”
Craig Dangar, Principal, Vault Business Advisors
“There are a lot of off the shelf tracking apps that help with tracking your expenses, even the banks now are offering an internal budgeting tool based on regular expenses and tracking data from what you normally spend. This is only helpful if you then use it to manage your costs, look at the things that you are spending on but don’t need, I am guilty of subscriptions that I don’t use, these tools let you see where your money is going and where you can make some savings.
“It is also critical to use the tool to see where there are opportunities to make savings, whether these are shopping around for a better deal or making sure you are getting value for money.
“Finding a solution for cost control and tracking for your business is one that is dependent on the size of your business and the number of transactions. The best starting point is your bookkeeping or accounting system which has functionality to provide tracking and cost control. From there we always recommend a line by line analysis, using both the bank statement and the accounting software to determine where your money is going and what can be done better. A process, where this is undertaken each few months is critical to ensure that the business remains efficient and that there is a constant cost control.
“The tools are only as good as the users, if you are using the data to make better decisions in your business, it’s the best way to cost control. If no, its just another subscription you probably don’t need to be paying for.”
Wayne Morris, CEO of Fifo Capital
“Most small business owners know that decent accounting software is key to expense tracking and cost control. But this software isn’t solving the financial issues of most small businesses.
“After years of working with SMEs to improve their financial situations, we’ve realised that a business’s success often comes down to cash flow. Are your customers paying on time, or using you as a bank? Do you have cash on hand to pay suppliers, and perhaps even score a discount if you pay early? Are you able to invest in expansion now, or is it better to wait?
“These insights have led to the development of our new finance-management platform, Fifopay. It acts as a “digital CFO” when integrated alongside your accounting software, offering AI-driven insights into cash flow, budgeting and planning tools, and robust protection from fraud. It also offers automated negotiations of discounts with suppliers for early payments, optimising cash flow throughout the supply chain.
“Any business can benefit from early payment discounts, even without using Fifopay. Reliably unlocking 2–8% in discounts is revolutionary for any business and the benefits are compounded when this process happens automatically, without having to devote resources to negotiating better deals with suppliers.
Selda Kaplan, CEO and Co-Founder, Tax Leopard
“Effective cost control and accurate expense tracking are vital for financial success. These are the four fundamental ways I recommend:
Create a comprehensive budget covering all income and expenses, including fixed and variable costs. This provides a holistic view, allowing you to identify areas for cost reduction and resource allocation.
Explore cost-saving measures through favourable negotiations with suppliers and consider bulk purchasing and alternative vendors to reduce expenses without compromising quality.
Leverage digital tools for streamlined expense tracking. Choose accounting software with automated features like expense imports, receipt scanning, and bank integration to minimise errors, save time and enable robust reporting for insights and data-driven decision making.
Make use of mobile apps for seamless expense management. Capture expenses on the go with receipt scanning capabilities. Link your bank accounts and credit cards to the software for automatic transaction categorisation and reduced manual data entry.
“By embracing these strategies and utilising digital tools, you can effectively control costs and track expenses. A comprehensive budget, cost-saving measures, and the right software empower you to optimise resources, save time, and make informed financial decisions.”
Steven Nicholson, Co-Founder and CEO, Retinue
“The start of a new financial year is the ideal time to consider new ideas to control costs and track expenses. Here are the top suggestions we advise our clients to adopt:
- Use bookkeeping software and record entries in sufficient detail so that you can track cost categories. Xero is great for this.
- Review last year’s costs and set a budget for this year that achieves your business goals.
- Use software that uploads photos of receipts, so you don’t forget what you spent money on.
- Quicker and more accurate recording of expenses means you get monthly business performance reporting quicker. Faster reporting means you can make better decisions to control costs.
- Use fixed cost providers for business services. Certainty over costs will ensure they meet budget.
- Have clear company policies around expenses for travel and office costs to reduce the risk of overspending.
- Restrict the use of company credit cards so that you can control what your team is spending.
“This can be a considerable time burden on busy business owners. Start the year on the right track by outsourcing to a good accounting partner who is skilled in this work, allowing you to focus on running your business.”
Walter Scremin, CEO, Ontime Delivery Solutions
“The first step to controlling costs is to understand your costs. This can be surprisingly difficult.
“‘Hidden costs’ are a real problem in several areas of business. Among the most notorious for this problem is delivery transport – companies which depend on deliveries often spend more than they need to due to many smaller hidden costs which add up to a lot over a year.
“Whether it’s unexpected problems, inefficient planning, doubling-up on resources, or inappropriate use of equipment, it’s vital to bring these costs into the open.
“We have seen many companies benefit by isolating all costs via an impartial delivery fleet x-ray – an important first step to greater efficiency.
“Once revealed, it becomes possible to control your costs. This method also lays the groundwork to successfully track expenses.
“A crucial step is making this part of your routine monitoring and management, so it’s something you are looking at regularly instead of periodically. This prevents costs running away from you.”
Amos Simantov, Founder and CEO, Way2Vat
“Way2VAT is a global fintech company offering clients a VAT and GST reclaim and compliance solution via its proprietary AI-patented platform. The company helps clients avoid dealing with foreign VAT and GST reclaim processes and submit reclaims across multiple territories and languages.
“Collecting unclaimed VAT can be complex. Multiple invoices frequently appear on a single page, requiring data analysts to scan, crop, and upload invoices individually. Scanned images need to be matched to the relevant expense line. As a result, finance departments find themselves leaving VAT unclaimed, at a cost of 4%-10% of their travel and expense budget.
“Way2VAT’s patented AI technology eliminates time-consuming pre-processing work, reducing overall costs while increasing reclaimed VAT by up to 30%. By seamlessly converting images into accurate data, Way2VATstreamlines the processing of VAT and GST reclaim forms for submission to respective tax authorities with minimal human intervention.
“Way2VAT’s solution is continuously improving through learning loop practices, leveraging insights from processing millions of expenses and ensuring maximum reclaim optimization.
“Way2VAT, has recently been granted a new patent for its document image understanding capability with the artificial intelligence technology that powers the world’s first fully automated, end-to-end VAT/GST reclaim platform. This is Way2VAT’s sixth patent.”
Angus Hannan, Business Manager at Paddock Offices
“Office expenses can be the biggest outgoing cost for business operations, behind salary, but there can be so many variables.
“Costs such as printing, electricity, office supplies and kitchen stock can vary wildly from month to month making it difficult to keep a handle on outgoing expenses. Unexpected rises in rent payments can really throw a spanner in the works.
“One of the greatest benefits of co-working spaces is your ability to control how much you spend month to month. In addition to having all the infrastructure and essential office equipment, you are not subject to unexpected overheads or energy cost fluctuations and no bank guarantees are holding up free cash for leases.
“At Paddock Offices, we understand that businesses need to have a controlled bottom line so we include all the extras – printing, meeting room bookings, kitchen supplies and even the office support staff to help you with tasks like binding, greeting guests and event set up and pack down.
“Catering to the evolving demands of the modern workforce, Paddock creates spaces where professionals can collaborate in an environment that nurtures creativity and fosters success. We understand the significance of adaptability and offering resources that cater to ever-changing needs.”