The purpose of the article “One Lever of Business Survival: Tighter Expense Control” by James Gifas is to highlight the importance of having an expense strategy. It is important to control costs and having an expense strategy will help business owners manage their costs efficiently, thus allowing them to grow their businesses.
The key findings are 58% of respondents from small and midsized enterprises (SMEs) find that the potential for misuse of company funds by employees is a concern. As a result, business owners are eager to implement stronger controls over employee expenses. However, there is widespread frustration among the owners about their ability to monitor and control these expenses. These frustrations are a result of the many inefficiencies of the SMEs, thus costing time and money.
The implications are that if small business owners don't implement an expense strategy, their inefficient expense management will cost them time and money. With 58% of survey respondents expressing concern over the potential misuse of company funds by employees, it is important to control employee expenses.
As businesses grow, the lack of an expense strategy will result in a greater portion of the CEO's time will be dominated by expense details rather than on planning and forecasting and growing the business. By efficiently controlling costs via an expense strategy, business owners can aggressively grow their business while controlling their costs.
Reference:
"One Lever Of Business Survival: Tighter Expense Control." Financial Executive 28.5 (2012): 21. Business Source Complete. Web. 19 July 2012 .
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Expense control is always an important issue for businesses, but you also need to have faith that your empoyees are responsible and will act accordingly. If you suspect that your employee is abusing company funds, then the chances that they are taking advantage of the company in another way are probably pretty high. Do you really want an employee like this?
ReplyDeleteWith a written plan it is not hard to make examples to keep people in line. Unfortunately bad things can occur with good people under stress and other conditions of life. Only a system of checks and balances will keep this from getting out of hand. This can also be very expensive to implement.
ReplyDeleteI actually agree with the checks and balances approach. Stricter controls need to be implemented in order for this type of behavior to not occur. By not giving an employee to much power when it comes to expense, the abuse should begin to reduce if they need to receive approval before making the final decision.
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