The horizon for IT Firms is expanding. The market started with the US $2018.9 billion in 2014 and rose to $2199.3 billion in 2015. Seeing the growth graph it is predicted to grow $2,461.1 billion by the end of 2019.
With such a tremendous amount of increase in the sector, firms are booming with business and cashflow. The vast growth and enhancement require a high amount of investment and expenses.
The day to day functioning of the firm requires major and minor expenses to operate projects and tasks. Such expenses are nothing but, your company’s investment in a particular project. Therefore, exactly calculating every expense that you make is important to manage expenses properly.
But, it is not as easy as it may sound. Expense management is crucial and businesses tend to face many challenges on a daily basis.
Here is a list of all the challenges IT Firms face mostly on a daily basis for expense management:
Calculating Project Bound Hours Spent:
“Time is money!” Correctly quoted, the time you spend on a project is an expenditure and well as an investment that needs to be managed precisely to yield maximum ROI. Most of the IT Firms work on the format of calculating project hours to bill clients. The projects are long and need dedicated employees. Therefore, making sure you’re able to manage your expenses well and convert them into ROI opt for a time and billing software for consultants. The same software helps you manage your invoices and works as an online expense management system, too.
Project Inventory Cost Management & Calculations:
The process of project completion and delivery requires a lot of inventory and subsequent purchases. Such purchases happen with time and are not invoiced to clients straight away. This makes them prone to getting missed or skipped leading to levying unnecessary cost burden on the company and increasing accounts payables.
The best a company can do is automatically track expenses with expense management software, record them in the client’s project section and later on add them into their invoices. The complications are now solved in merely three-steps with a billing & expense tracking software for consultants.
Travel Cost Management:
Meeting and travels are a part of client & project management. Your representatives and consultants travel time to time for meetings and consultations to clients’ offices. The time, efforts and money you’re investing in such meetings should be calculated as they are liable for ROI.
Travel costs are one of the major sectors of expenses for any company. Their reimbursement and calculations are the most complicated and tedious. Most companies and employees struggle to settle down travel expenses.
Easy management of travel expenses can be sorted by the means of online expense tracker software for consultants. You can easily ask employees to fill in their expenses in the dashboard available online, track and review them, and finally make the payments. Expense management was never so easy, trust us!
Manual Data Entry Errors and Corrections:
Expense management in itself is one of the most tedious tasks any accountant or management of the company requires to manage. Errors and mistakes simply add to the already existing difficulties of it.
Humans are prone to errors and we cannot defy it. No matter how practiced of times we do the same task, we can never be sure of not committing a mistake.
Manual data entry is one such example where most mistakes are committed. But, creating mistakes in matters directly related to the company’s finances and expenses can hamper its balance sheet and cash flow.
How about automating expense tracking and recording for efficient management of finances? Online expenses software for consultants enables you to automatically fill data, precisely for minimal errors and better efficiency.
Lack of Spend Control:
A lot has been discussed how software helps you with better management of expenses and recordings. Now, here is one of the most common errors most of us make that cannot be handled by any invoice or expense tracking software- Lack of spend control!
Many times we’re unable to calculate how much we need to spend? The difference between over and under-spending still needs to be understood. And, the lessons of spending right needs to be learned.
Sit back and decide, how much can you save? Or, what is the right spend to get the best results that do not compromise on quality?
Such answers are not difficult, they just need efficient decision making.
Make clear policies and communicate them within your employees as well to stop unnecessary spending. Controlling and tracking expenses is the key to efficient expense management! You should be aware of how to predict expense for accurate finance forecasting
The above-written challenges are some of the most commonly faced challenges consultants are facing in their day to day expense management. We conducted a mild survey with a few of our clients and found these to be the most happened obstacles in their functioning in the past.
A consultant billing software with expense tracker and management eradicated these errors and ensured a smooth functioning for them.
“We earn more ROI on projects, now.” says one of our clients, while the others are happy to have easier processes and analysis.
Expense management is important, it balances your AR & AP and ensures your company yields better results.
Hope you had a great & insightful read!
Read more tips on expense management in our other corresponding blogs.