Controlling expenses is a crucial issue for companies, now more than ever. The Covid-19 crisis has put a strain on the financial stability of many businesses. The need to reorganize work and the various constraints linked to managing the crisis have generated unexpected additional expenses. The question is how to better control business expenses and how to save time on repetitive tasks. Here are four steps to take to effectively reduce costs and deal with temporary or permanent economic difficulties.
Reduce your company’s expenses
Have you reviewed your bills lately? Telephone, internet, insurance, bank fees, office supplies, or travel expenses… These are all avenues that can be explored to reduce your company’s expenses. Don’t hesitate to eliminate unnecessary expenses and remember to ask for quotes from competitors to push down costs.
Of course, this all takes time. If you have no time to spare, you can call a “cost-killer”. What exactly is a cost-killer? Cost-killers specialize in reducing business expenses. Their job is to scrutinize the company’s documents to find potential savings opportunities. This can be very profitable for companies, especially because these specialists are paid a percentage of the savings made. It’s a solution not to be overlooked if you don’t have the internal resources to do this work.
Optimize your tax situation
Corporate tax optimization is also a lever that can be activated to reduce expenses. However, it requires the advice of a specialist. Because tax legislation is regularly updated, it is sometimes difficult to keep up with the latest developments. Talk to your accountant or a tax optimization expert. This strategy could quickly prove to be profitable.
For example, if your company owns real estate such as your offices, it may be a good idea to update information about these offices with the tax authorities. The amount of property tax is initially based on the information collected at the time of construction. However, subsequent developments may change the amount to your advantage. Don’t hesitate to have your floor space calculations updated to ensure that they correspond to the amounts your company pays. This could save you 5-10% of your total property tax bill.
An expert will also be able to give you tips on how to reduce your corporate tax bill, particularly in terms of managing losses. What’s more, they will be able to inform you about the many business assistance schemes such as tax credits and reductions, exemptions, deductions for current and financial expenses, etc.
Review your expense report validation process
Expense reports are among the most complex, and sometimes the costliest, recurring expenses for a company. It is therefore essential to take time to rethink this aspect of your expenses and to prepare for the post-Covid period. This can be done in three steps.
Review your expense report policy
How are business expenses reimbursed? Do you have a clear and comprehensive policy? Do you have a global vision that allows you to identify your employees’ main expenses? If you haven’t already done so, we recommend that you group your expenses by type (accommodation, regular transport or travel, foreign travel, etc.). Keep it simple, but be sure to cover all expenses so that you can lock them in.
Beware of “bleisure”, a portmanteau combining “business” and “leisure”. These expenses arise when employees extend business trips for personal reasons. Adopt a clear policy on this question in order to control the practice and ensure a clear separation between business and personal expenses.
Improve your reimbursement management
There’s no mystery here. Switching to a paperless, automated process is a definite plus. Why? Because a paperless process avoids cumbersome storage. Paper archiving accounts for 3% of the costs of expense reports and 15% of receipts are damaged or lost. In the event of a tax audit, it is perfectly acceptable to present digital documents, as long as they comply with a certain number of rules. Expense report management applications such as N2F allow the digital storage of expense reports in compliance with the legislation. If you aren’t convinced by completely paperless expense reports, consider standardizing your reports in order to improve efficiency and facilitate verification.
Identify costs that can be reduced
Get a clearer picture of your employees’ expenses by using summary reports. You will be able to identify expenses that can be reduced or optimized, or expenses that need to be more tightly controlled, etc.
By following these three actions, the cost of your expense reports will decrease significantly, and you will make things easier for your employees (no more expense envelopes or lost receipts).
Digital tools to help you in your management
Although their implementation may appear daunting, paperless and task automation tools are an important source of many savings. Time savings, better control of expenses, improved reactivity, etc. There are plenty of arguments for adopting them within your organization.
N2F’s solution can, for example, be very interesting for companies that spend a lot of time processing expense reports or that find errors in their expense management.
The tool helps you to save time and to be more efficient, thanks to various features such as:
- Automatic detection of fraud;
- Detection of duplicates;
- Automated VAT recovery. Half of expenses are eligible for VAT recovery. However, compared to the average rate of 13%, companies only recover an average of 7.6%;
- Automatic counting of the number of restaurant vouchers to be distributed;
- Reduced validation circuit for expense reports; and
- Paperless archiving, providing centralized, legible, traceable, and secure storage.
This investment can pay off in the medium term, by saving you time and money and improving your profitability.
By implementing these four actions, you will succeed in reducing your expenses in the long run and you will be able to adapt more easily to the constraints linked to the crisis.