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Does Your Company Culture Help With Spend Control?

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“Spend control culture this! Spend control culture that! Do you think all these buzz words will help your business grow?” Asked Zeph. He is an experienced Financial Manager. His boss trusts him. He hired Zeph not only for his impeccable array of qualifications but for his brain too.

Hilton wants to build his hospitality business on core values like inclusiveness, embracing different cultures and ethics. So, asking for employees’ input is part of those values. What sparked Hilton’s interest in spend control culture?

Well, it all started when Hilton realized that most of the businesses that started around the same time as his business are growing while his, isn’t. He set out to find out why. “Is there anything wrong with my hotel’s culture?” He asked himself.

Then, Hilton stumbled on a blog about spend control culture. After reading this blog over and over again, he decided to get a second opinion. He then forwarded the link to Zeph. Now he stands in front of Zeph, listening attentively to what the accountant has to say.

“Hilton,” offered Zeph quietly.  “Let me tell you what I learned from my 26 years experience as a financial manager. Managing your cashflow is easy when you record the right figures every day. And this is why you have me and my Excel!  Don’t let these blogs confuse you. There’s no such thing as software qualified enough to manage your money better than an accountant.” Hilton swallowed. Sounding stupid to his employees embarrasses him.

What Hilton found

As a seasoned entrepreneur, he has an inkling that there’s something valuable in the blog he read and forwarded it to Zeph. He decides not to argue with a qualified accountant. Instead, he walks out of Zeph’s office and researches the spend control topic a bit further.

He spends hours reading up several blogs. And slowly it dawns on him that his hotel is not growing because:

  • It processes purchases manually,
  • It has a closed spend control culture,
  • All purchases are approved by one person, Zeph.

He picks up the phone to call the only person he trusts, his business partner. After talking for an hour both agree that it’s about time they find a software that can help them control spend without being in the office.

Does this sound like your business? Well, like Hilton, you’ve just stumbled on that blog that will make you think.

Tweet this: Unlike the closed spend control culture which relies on manual processes, a transparent culture uses a relevant software.

Why spend control culture is important?

employee-spending-control

Poor spend management culture can halt the progress of your businesses. This is common in companies where the purchasing process is decentralized, with no control, visibility or accountability. You’ll find different departments managing their own budgets – a system results in Maverick Spending!

As the above anecdote has illustrated, there are two types of cultures. A transparent and a closed culture.

Let’s take a look at each culture.

Closed (Obscure) Culture

Environment

Most companies with serious culture problems realize it too late. The top complaints raised about companies with a closed culture are poor pay, grueling long hours and a toxic work environment. Employees would often report that their managers are struggling with budgeting, which means there are no raises!

As if that is not enough, there are strict policies such as restricting cell phone use during office hours, wearing shorts at work, no visits from family members, and so on. Financial reports are also shrouded in secrecy as no one knows about the financial position of the company except the decision maker or his accountant.

Employees

It’s not surprising that employees working for such companies are not happy. They’re likely to take to social media to air their gripes or share it with friends, customers or family. Unhappy employees are always looking for another job.

Purchases

With a closed culture, purchasing transactions are not visible. In most cases, only one person, a financial manager (or bookkeeper) sees purchases. He/she is the only person authorized to process purchases and payments. This person has the power to spend the company’s money. In fact, they can steal money without being caught!

Advantages

  • It costs less.

Disadvantages

  • It involves one person,
  • It’s time-consuming,
  • It’s prone to errors,
  • And also vulnerable to fraud.

Transparent (Open) Culture

Environment

Companies like Warby Parker and Google have an open culture that attracts top talent. It is reported that Warby Parker makes sure that there is always an upcoming event so the team can have something to look forward to. The work environment is fun-filled which helps employees to offer quality customer service.

Employees

As previously stated, companies with an open culture tend to attract the top talent. A good salary and benefits are no longer enough to keep employees happy. The best employees tend to stick around with companies that have an open culture. These companies also have open communication lines and transparent work policies. In other words, it’s a culture that involves everyone.

Purchases

Unlike the closed spend control culture which relies on manual processes, a transparent culture uses a relevant software. For example, when using Procurementexpress.com employees can create purchase orders as normal users while finance guys like Zeph can approve or reject and Hilton gets unlimited capabilities.

Advantages

  • Approvers get alerts every time a purchase order is loaded,
  • There’s visibility on all purchases made,
  • Opportunities for fraud are minimized,
  • It saves time and money.

Disadvantages

  • Some software may require prolonged training sessions,
  • Other packages are costly.

Which of the two cultures suits your business best? A transparent culture seems to have more advantages. I don’t expect turning around the culture of your business to be easy, but you can start somewhere.

You may start transforming your business culture by improving your purchases as they directly affect your bank balance. Go for a software that will save you time and money. A software like Procurementexpress.com which is so easy to use, even technophobes enjoy using it.

Sign up for a free trial today!

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