5 Must-Ask Questions for CFOs at Year-End
As the year winds down, CFOs often take time to conduct an assessment of their business, its performance the previous year, and what their goals are for the new year. As CFO, you’ll likely review your marketing and operations departments to see how they’re performing and their levels of efficiency; however, one area that is frequently overlooked in these types of year-end analyses are your existing accounts payable and financial technology and processes.
Time is money and both are precious resources, so it is vital to the longevity of your organization to ensure you are optimizing efficiency in every facet of your business. You may be surprised to realize how many resources and how much time are dedicated to simply entering data from invoices and expense reports.
Although you might be of the opinion that you’re already paying your accounts payable employees to do exactly that, think for a moment about how many other more productive, meaningful or even revenue-generating tasks could be performed by these individuals if they’re not spending the majority of their time digging through papers and entering data. Not only that but wouldn’t it be great if you could all but eliminate errors by using an automated system that is not reliant on fallible humans to process vital documents?
At Itemize, we think that reducing reliance on humans in the workflow is one of the most significant ways to increase efficiency, productivity, and decrease errors and time spent correcting those errors. Using automated expense management technology will save your organization an incredible amount of both time and money.
If this has piqued your interest, read on to find out more about how to increase productivity and efficiency within your accounting or finance department with just five key questions at the end of this year to benchmark your financial practices.
How much time is spent on bookkeeping?
Again, although this may not be a question many CFOs and business owners are asking themselves, it is important to know if there are more efficient accounts payable models. And, while you might think that your current process “works well enough”, determining exactly how well it is working—or not working.
A good metric for this valuation is time spent. Some businesses spend upwards of 20 hours a week on bookkeeping; that’s a lot of time doing something that does not contribute to the top line of the business. That said, it’s important to note that we are definitely not encouraging you to replace bookkeepers with expense management software. On the contrary, implementing this type of smart business technology enables your bookkeeper to focus on other tasks that are more productive for your company.
For example, they could spend more time managing cash flow or analyzing vendor relationships and how money is spent. There are numerous tasks that are far more productive and valuable for the business.
Using automated expense management technology frees up significant amounts of time that would otherwise be spent schlepping through paperwork and tediously entering data.
How much money is being lost because of poor receipt management?
It’s easy to misplace or lose receipts; they’re small bits of paper that likely get mixed in with other papers, get lost in the depths of a car or purse, or never make it past the check-out counter. Before you know it, you’re not even sure if you received a receipt. We’ve all been there.
These lost bits of paper are one of the reasons why storing expenses digitally is a must, and today’s technology makes it easier to do just that. For example, we know an architect that is now using a highly intelligent automated expense management tool. Prior to this, they were losing countless reimbursements and receipts every month. Simply by being able to take a picture of a receipt and then upload it directly into a system that codes and assigns it to different clients, they saved more than $700—in the first month alone.
With the number of receipts and invoices generated for different clients each month, it’s increasingly difficult to keep track of them while also matching them to a specific client. You don’t have to spend time on these bothersome details with the right expense management tools in your financial stack. If you know how to take a picture with your smartphone, you’re more than halfway there. It’s really that easy.
Can you see every outstanding invoice and when it’s due?
It’s always astonishing to learn how many small businesses can’t answer this question. Having visibility for your small business is key to effectively managing cash flow. With expense management software, you can see all of your expenses on a single dashboard. You can know exactly what you owe and when—without having to look in multiple places.
So many start-up businesses fail simply because they did not properly manage their cash flow. Most business owners are also paying out more than they are putting in, making the need for visibility even stronger. Do yourself a favor by implementing smart business technology and accurately track where and how you are spending money.
Are there opportunities to save money with different vendors?
It’s easy to get stuck in the weeds and not look at the bigger picture of how money is being spent. But imagine a scenario in which your bookkeeper, no longer spending their time entering data, can review and audit vendors to determine how you’re spending money with them. Would you rather pay a bookkeeper to perform mundane tasks such as data entry, or have them analyzing data to identify various ways to save the business money?
Bookkeepers have value far beyond the numbers; giving them ample opportunity to perform these types of analysis and challenge them to improve the bottom line is not only good for business, but it’s also good for your employees as well.
How much do you actually spend preparing your annual tax documents?
Paying an accountant to do your yearly taxes is expensive. It is also tedious. When March 1st rolls around each year, the loathing of impending tax preparations once again becomes a top priority. Preparing taxes tops the list as one of the biggest challenges and most dreaded activities that small businesses face each year.
The good news is that it really doesn’t have to be that complicated. An automated expense system is a complete game-changer; all of your expenses and invoices are organized and stored systematically. The hunt for loose paperwork or invoices becomes a thing of the past.
And, if you’re one of the 700,000 small businesses the IRS audits every year, finding various documents is no longer a source of concern with an expense management system. Tax season becomes far less complicated and stressful with the right technology.
Did these five questions give you a new perspective on how you look at your business, and your finance and accounts payable teams specifically? Have you identified some areas that need improving or perhaps learn some things that you hadn’t considered previously? This time of year is the perfect opportunity to take the plunge and try an expense management tool that will save you both time and money. Itemize offers a free trial of our solution to help get you started. Set-up takes less than 20 minutes, and you’ll have usable data in under a half-hour.
Try it today and start the new year off on the right foot!