With the economy currently in flux and experts predicting a long-term recession, most business leaders are hyper-focused on how they can navigate the uncertainty. One such way is to get a good handle on your property management company’s spending. When you can manage expenditure more effectively, you’ll put your business in a much stronger position to weather the storm. Let’s explore a few easy-to-implement strategies to help you better understand and control your company’s spending.
Be strategic about your sourcing.
Evaluating your relationships with suppliers and vendors on a regular basis is one of the easiest and most effective ways to achieve long-term savings. To begin, gather all the contracts you have with various providers and conduct an audit.
We recommend using a spreadsheet to track everything. This will allow you to more easily spot areas of overlap, such as paying for similar services from different vendors, as well as overspending on things like unused, auto-renewing contracts. Now’s also a great time to get some competitive quotes and determine if switching or renegotiating your contracts for better prices and/or terms might be worth exploring.
Define and document your spending process.
Before implementing any kind of change, you should establish clear guidelines for anyone in charge of making spending decisions. Your spending rules don’t have to be complicated. They just need to be spelled out and well-communicated. Some common spending process rules include:
- Who is authorized to make purchasing decisions
- When and how purchases can be made (e.g., only from an approved vendor list)
- What limits exist for purchases
Standardize the approval process.
If you want your employees to follow the spending process you’ve just defined, you’ll need to make doing so as easy and straightforward for them as possible. This means creating standard, repeatable workflows for how to get purchases approved and paid for.
For example, you may require a requisition be completed, submitted, and signed off on by an authorized party or department. Be specific about exactly what is needed to get quick approval and avoid delays and bottlenecks. The more effort you put into this step, the smoother the entire process will go once it’s implemented.
Track and analyze spending.
Not only is this important from a cost optimization standpoint but having this information in one place will also make forecasting and budgeting much easier as well. With comprehensive, real-time data available at your fingertips, you can:
- Identify exact areas where spending is exceeding budget
- Streamline the procurement and purchasing process
- Develop more impactful KPIs
- Perform supplier analysis and price benchmarking
- Prepare more accurate financial statements
- Conduct more efficient audits
Automate whenever and wherever possible.
Handling spending manually may be manageable in the beginning, but as your property management company scales, automation can help prevent human error while also alleviating the burden on your procurement, accounts payable and finance teams. Property management software can help you systemize and standardize your spend management strategy, freeing up your human resources to be able to focus on more meaningful and impactful initiatives, such as growth and revenue generation.
There’s never been a better time to grab hold of and dramatically optimize the spending process than right now. To learn more about how INFO-Tracker can help you better understand and manage your company’s spending in 2024 and beyond, schedule a demo today.