Suffering from election fatigue? With the election now behind us, if you were one of the XXX who voted, it is a good time give yourselves a pat on the back for making your voice heard by ticking that little box on the ballot paper.
Having started as being the “Brexit Election”, it became clear once campaigning started Brexit was not the single most important topic. Rather, the economy, and hence budget behind it to cover key areas such as the Tax, NHS, policing, education, housing and the like. I am not going to comment on our national budgeting requirements, but it has made me think about my personal household budget as the principles are the same – you have money coming in and money going out. Just for clarity in no way am I saying the British economy is the same as a household budget.
When I was living the life of a student, with a student loan and a part time job, I could be a little looser with my money. Now a full time job, and with the possibility of having a household of my own, I’m watching my incomings and outgoings like a hawk. Justifying each and every purchase I make. I wish I didn’t have such expensive hobbies (PC Gaming with VR and Airsoft), or perhaps someone to send back a rejection notification when I go to click the purchase button on any retailer website I visit.
I try to justify each and every purchase I make to myself for a positive monthly bank balance. I know I wish I had someone above me to stop me from making the purchases that aren’t in line with my saving for a house deposit regime. But how does this relate to the economy as a whole? Well, I have two quick choices to cut my outgoings.
- Less alcohol – but where is the fun in that?
- Packed lunches rather than the variety of meals London has to offer.
Saving isn’t the most fun and social activity. Another option is to try and increase my incomings. Obviously, this option makes me the happiest, but not something that is likely to happen to the degree needed that I’d never have to justify any purchase again. The best option remains somewhere in the middle of these two.
Increasing profitability/savings by auditing my spending habits by approvals and justification of each thing I purchase, and increasing my salary incrementally. Your business is no different in this respect. You have costs (purchase orders) going out and money coming in. However, through better management of your cash flow, you can maximise your business income significantly. Here are some ideas:-
- Restrict your supplier list. Have a list of preferred suppliers and negotiate favourable terms with them at reduced rates to an ad hoc supplier
- Enforce a strict “no PO no payment” policy with your suppliers.
- Provide your debtors with more favourable terms i.e. a discount, if they pay your invoice early.
- Assign a multilevel approval matrix to any purchase value to limit large expenditure without multiple approvals
In short, what I need is purchase management and an approval system.
While this may be hard to achieve as an individual, it is certainly possible for every organisation struggling with cash flow and budgeting.
In the current economic environment, these controls are more important than ever, and iPOS has the ability to do all this and more.
Just as the new government needs to think about their purchasing and budgeting considerations at a macro level, every organisation goes through the same challenges every day. Implementing a system of control, audit, management and reporting, is no longer an option. It is essential.
