Proper financial management lies at the core of any successful business. As we move closer to the post-COVID era in 2021, human resource and finance management are bound to shift to accommodate recent social changes. As every company works with a limited budget, CFOs and small business owners need to rethink how resources are allocated given the new safety regulations.
Whether you work as a small startup or a large multinational firm, writing a realistic, functional expense policy should be a priority going forward. That said, let’s discuss how such an expense policy can benefit your business, as well as the facts you must consider while drafting your policy.
Benefits of writing an expense policy for the post-COVID era
To get a good sense of writing post-COVID expense policies, let’s start by addressing their benefits. Specifically, how reinventing your current expense policy can improve decision-making and cost-saving going into 2021. According to National Business Capital & Services, 79% of small businesses don’t use proper financial management systems, while only 45% rely on CRM tools.
This makes integrating a cost-savings tool such as Fyle pivotal for financial stability in a post-COVID world. Business-related expenses are an inevitable reality of managing a company. Whether those expenses relate to travel costs, office equipment, or high-profile client accommodations at your expense, you should have business rules in place for managing them. Writing expense policies for the post-COVID era sooner than later can have several positive outcomes for your business, including:
1. More informed employee travel and expense calculation
2. Clear outlining of wanted and unwanted expenditures
3. More effective business development decision-making
4. Improved company reputation due to increased financial stability
How to write a comprehensive expense policy for your business?
1. Audit your existing policies and Financial pipeline
The best way to start writing post-COVID expense policies is to audit your current financial pipeline. How do you manage finance at the moment, and is there room for improvement? Auditing your current financial management process will allow you to set the right expectations and goals for new expense policies.
Using a free essay and flashcard database platform such as Subjecto can also improve your audit by teaching you how to write and edit notes. These notes can be formatted into reports for further analysis to avoid recreating existing financial management issues in the new expense policies. You can also spot critical bottlenecks and unnecessary costs more easily if you devote time to a careful and thorough audit.
2. Take sanitization expenses into consideration
Sanitization is often overlooked yet is a critical part of any company expense policy. As we move into a post-COVID era, office spaces will have to be sanitized and kept as clean and infection-free as possible. Small additions such as hand sanitizers, gloves, masks, and additional cleaning of workstations, kitchens, and toilets can add up quickly.
However, if you want to keep your employees as healthy and happy as possible, this expenditure needs to find its place in your expense policies going forward. Consider whether you will acquire sanitization items in-house and instruct your employees to use them or whether you will consult a dedicated office-space cleaning agency. The choice should fall to your available budget and scale of office space, as well as how many employees you have on the roster.
3. Define a pro-employee medical support system
Your employees are the last people who should suffer due to budget constraints and cost-savings. As such, your expense policies should contain points on their medical wellbeing and health support.
As the post-COVID era rolls around, vaccination and medical checkups will slowly subside but still be a noteworthy point to consider. You may want to include that in your expense policies to ensure your employees can get the checkups or medication they require without issues. If one of your employees contracts the virus, you should accommodate for testing and remote work conditions momentarily to avoid further issues. While these scenarios may seem unlikely, having a plan in place will allow you to mitigate any downtime in their workflow.
4. Enable employees to work remotely in case of illness
Speaking of remote work, you may even go as far as to enable your employees to work remotely for the time being. Global immunization is only just starting, so your employees may still be at risk of contracting the virus.
Whether due to other illnesses or the pandemic, remote work conditions can dramatically increase your employees’ employment satisfaction and productivity. To accommodate that adequately, you should rely on a digital transformation solution that will help you write sustainable expense policies for your business.
5. Limit business trips and corporate visitation
Unfortunately, 2021 will be marked by social distancing and limited travel, just like its predecessor. Ensure your expense policies consist of some smart cost-cutting, keeping the current scenario in mind.Outline the number of business trips each employee can take and what time intervals they are allowed to do so.
Combine this with the previous point about remote work and allow employees who traveled recently to work from home for a week or two afterward. Your expense policies should also address the clients’ visits to your offices for the foreseeable future and the conditions under which that will happen. Please ensure not to risk your employees’ wellbeing just to accommodate a client visiting from another country – we live in a post-COVID era, after all.
6. Outline actionable and practical guidelines
Your official expense policies will likely be too dense to read for quick reference, which is why you should also write short practical guidelines. Think of it as an internal pricing document with expenditure details for each point we’ve discussed previously.
7. Leave the door open for policy updates
Chances are, you will spot new issues and bottlenecks in the new expense policies after putting them into action. Nothing should stop you from updating and revising individual points in your expense policies to ensure the best cost-savings and finance management for everyone’s benefit.
Start with consulting your financial department on the performance of expense policies as of now and ask your staff how satisfied they are with the regulations. Integrating a compliance and control system into your business pipeline at this point is also a smart idea that can help automate your analytics operations. Growing pains are bound to happen, but you can benefit from the adjustment period by shaping your policies into sustainable post-COVID guidelines.
Effectively managing expenses in a post-COVID world
The best expense policies are those which consider practical day-to-day workflows. Don’t write your policies in a vacuum without consulting department heads or employees who will use the said policies once published.
Lastly, your colleagues will have an abundance of insight and feedback to offer on what to do and not do regarding finance management in a post-COVID world. Make your expense policies a team effort, and the whole company will benefit from putting such rules into action.