As companies pursue growth opportunities, it’s all too easy to burn through cash in the name of future profits. Growing companies can maintain a healthy cash flow by cutting noncore expenses — for example, by outsourcing invoice processing or using automated expense management software.
An article on CFO.com suggests these three tips for controlling cash burn.
- Growth is no substitute for cash. Companies often focus on profit but fail to keep an eye on their cash flow. Maintaining a healthy cash flow is essential to success because it makes sure the growing company is still standing when it’s time to capture those projected profits.
- Cut costs through outsourcing. Spend what you need to on core functions, but outsource whatever else you can to cut costs and preserve cash flow, CFO.com suggests. Standard accounting procedures like invoice processing can be automated with cloud-based tools and outsourced to provide greater efficiency and savings. Compared to paying administrative staff to scan in paper vendor invoices, outsourcing is cost-effective and scalable, which helps preserve cash flow.
- Don’t manage tomorrow’s expenses instead of today’s expenses. When a company is low on cash, it’s important to refocus from future investments to the needs of today. A company may benefit in the long term from a larger staff, for example, but today’s needs and expenses must take precedence.
By adopting expense report software, organizations gain transparency into their expenses and spending and make savings that matter today — not just in the distant future. Chrome River EXPENSE, for example, offers a speedy return on investment, paying for itself in as few as 30 to 45 days.
When companies burn through cash in pursuit of profit, taking on additional financing can actually hurt their chances for growth, according to CFO.com. Instead of saddling a growing organization with costly debt, follow these three tips for cutting costs and preserving cash flow.
We appreciate your feedback. What additional strategies would you suggest for preserving cash flow in a growth-oriented organization? Please share your thoughts below in the comments section!
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.