A requirement of every chief financial officer’s job is to find ways to improve the company’s profitability. Improvements can be accomplished by making the best use of corporate funds and reducing expenses. How CFOs reduce company costs can vary greatly from one business to the next. The industry type, business size and corporate structure are all important factors.
However, there are certain methods of cost reduction that are universal. Trimming the number of employees is always a controversial topic, but there are other ways to reduce costs:
Go paperless. The cost of paper alone can be a burden to virtually every company. Not only is reducing paper a very environmentally friendly initiative, but it can literally save the company tens of thousands of dollars in operating expenses. For example, could expense reports be submitted with scanned receipts instead of copies?
Get automation. By leveraging automated expense tools that can reduce processing time, a company can become more productive with the same number of people or fewer. One example is to create an automated invoicing process where the customer receives the invoice based on a predetermined set of business rules.
Grow your workflow. A careful analysis of your workflow cannot only increase productivity, it can also reveal quality improvement opportunities and cost reduction targets. For example, if you follow the workflow for creating and processing an invoice, how many steps are there? Should there be fewer? Are any steps missing or do they add unnecessary time? If you are not sure if you have documented workflows for all processes, now is a good time to work on them.
Gain visibility. By gathering information on key performance metrics, CFOs can analyze many aspects of the business and find areas for improvement or cost reduction. Establish a set of key performance indicators (KPIs) and track the trends to zero in on opportunities.
Grapple with trendy technology. It might be cool to have the latest gadgets, but it may not always be the most cost effective approach. Carefully evaluate all new technology and establish a strong business case to rationalize the return on investment. Sometimes the simplest solutions are better than the flashiest technology.
While CFOs’ methods for reducing company costs can vary greatly for every company, there is no doubt that every CFO is working diligently to find ways to trim expenses.
Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.