Managing Director ERP The Access Group
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How to build a cash-conscious culture
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How a cash-focused culture helps manage expenses

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As the economy recovers and businesses loosen their purse strings, Brendan Flattery puts forward a cultural template to help finance managers retain control on spending.

28th Apr 2021
Managing Director ERP The Access Group
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Maintaining positive cash flow will always be the ultimate aim of any finance team.

Ensuring the business has more money coming in than going out guides every decision and action a finance professional takes. Yet that doesn’t always mean taking care of cash is front of mind in the wider team. Especially when it comes to expenses.

According to the latest expenses report Access published, business expenses nosedived during the past 12 months. On average medium to large businesses in the UK spent £49,000 per month less on travel, accommodation and office running costs during the first lockdown.

Yet as people head back to the office and economic activity recovers, businesses still have to be mindful of those expenses creeping back up.

For finance teams and accountants, the reduced spending during lockdown will have given them food for thought on how they can improve spend management before expenses rise again. The pandemic may have restricted their scope for action on this front, but there have been opportunities to make positive change happen.

According to our pain points survey of 1,000 finance professionals working in the UK, more than a third of respondents said maintaining cashflow was their biggest challenge (apart from the impact of Brexit and Covid-19) for 2021. Of course, expenses management is only one element of cashflow - but introducing a cash-focused culture could help reduce overall expenses costs and optimise their value to the business.

Focusing ahead

Typically, a finance team manages its cash and expenses by running yearly, quarterly or monthly reports on what has been spent, who’s spending it and where it’s going. Yet for progressive finance teams and advisers, looking forward rather than back holds the key to expenses management.

According to the analyst IDC, more than half of best-run finance teams are adopting innovative technology to help the business move away from reactive spending. This is echoed by the respondents to our survey, two-thirds of whom said they expect to adopt accounting tech to support their roles this year. This included 24% per who said cloud accounting could hold the key to their expenses management.

Cloud-based analytics can help finance teams better understand their business's expenses ahead of time, so they can factor this into forward plans.

Using analytics, finance teams can ensure everyone from from sales and marketing, to procurement and HR has a clear picture of expenses spend within their division - enabling them to budget and plan ahead more effectively. This helps to create a cash consciousness across the business from the top down.

Although the right tools and data can help you as a business better predict, plan and understand where expenses spending is likely to add up, if the team on the ground don’t have the same care for cash it can be difficult to implement your strategy.

As well as implementing new technology to support your expenses management, finance teams should also work closely with teams across the business to remind them of cash constraints and influence their spending patterns.

For the long-term

According to business advisors Grant Thornton, good practices around a cash-focused culture often don’t often last beyond an immediate crisis. Initiatives to improve spend management usually fade and bad habits return. It’s down to finance professionals to ensure that doesn’t happen when the business recovers and teams aren’t on high alert about the state of the business.

Last year taught everyone how quickly the status quo can be disrupted and the impact it has on income and revenue. It’s no surprise cash flow continues to be a key focus for finance teams. As with any significant event, ensuring lessons learned are incorporated into business culture for the long-term is key to positive change.

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