Is Your Company Spending Money Wisely?
Company spending isn’t just the CFO’s responsibility, it belongs to everyone from CEO to the support staff. Because every employee affects the company’s financial health in their own way. Even employees who don’t work directly with the financials, still work on the company’s time and resources, therefore they are indirectly working the company financials.
While some waste should be expected, financial frugality should be the overwhelmingly common practice. You may be surprised to learn some of the most common ways that employees waste company money.
Distractions in the workplace are among the most common issues with company spending and productivity. According to a Salary.com survey 89% of respondents admitted to wasting time at work each day. Some even said they waste at least half of their workday on non-work related tasks. The most common ways that people waste time (a whopping 759 hours each year according to a group study of 2000 employees!) is by chatting with coworkers, gazing out the window, and excessively checking their phone notifications.
The federal government actually spends $430 million in wasteful printing each year. Not only is that a ton of paper and ink, but it’s also not being used on documents that people actually use or need.
Lack of Financial Competence
As a financial executive, it is likely that you work in a company that spends considerable time and resources ensuring that potential employees have the skills and education for their particular role. However, not much emphasis is placed on their financial competence. A candidate’s wastefulness may be more important than their level of competency. Remember, some skills are more easily taught than others, and financial responsibility is often among the most challenging things for people to learn.
Bigger Company Spending Picture
To ensure that employees are spending company money wisely, ask yourself the following questions:
- Do the employees understand cost-saving solutions in their role?
- Is wastefulness impacting revenue?
- Do you trust your employees to make the right financial decisions?
- Is financial incompetency influencing the company’s ability to grow?
Once you have identified financial risks and opportunities, you will be able to:
- Prioritize interventions where they are needed, optimizing your budget and avoiding waste.
- Identify employees who are making poor financial decisions.
- Offer training to help employees get a better grip on spending.
For more useful tips, check out Forecasting: Optimizing Business Planning