What do you do in your business when you feel as though your expenses are out of control and there just isn’t enough money to go round!
It’s an amazingly frustrating place for a business owner because it always seems as though everyone leaves it up to you to get everything fixed and you’re not sure quite how to fix everything.
Now you might say to me that you don’t really understand the figures or numbers in your business so you have hired a book keeper or administrative person who does all this for you.
You may even find that they are really great at their job and bring you reports all the time so you know exactly what’s going on in your business.
Now cast your mind back to the last time you heard about a fraud in a business.
Was it performed by a burglar who just came into the business?
Was it performed by someone new to the business?
Was it performed by the worst behaved employee in the whole business?
Fraud is usually performed by a TRUSTED employee!!
What this means is that every person is subject to temptation and vulnerable to doing something that they’re not proud of.
Every person I know has moments in their life when its possible for them to do the wrong thing and if it is not picked up quickly they can easily move to more and more bizarre behaviour
So my point is that it is important for the business owner to be able to create expense templates so that they can do a second check on what they think is going on in their business.
This does not mean you’re turning into the administrative person for your business.
Far from it because as the business owner you have a different perspective and a different context for looking into your business.
If you descend to becoming the administrative employee then it will be impossible for you to have a big picture look at the business and use your gut instincts for finding where something isn’t quite right
You must learn the skill of looking at expenses from many different angles to get a perspective which is different from others because when you do this you can bring the value that only a business owner can.
From your position you are able to connect parts of the business and look for trends that don’t occur to people looking from their more narrow perspective.
So how can you go about creating a decent expense template when you think there might be something going wrong in your business?
Step 1: Big Picture
When you think something is wrong with the expenses in your business you must clearly work out the context that you’re dealing with.
If you are looking at only a small section of your business then the expenses might be hiding somewhere else in the business because of a mis coding or mis allocation to the wrong area.
This will involve looking at the total expenses for the business and ensuring there is an overall issue.
Once you have established where the problem exists you can move on to step 2.
Step 2: Context of the problem
Once you have established that there is a really expense issue in your business you need to decide the context of your problem.
What type of expense is it?
How is it normally accounted for?
Where would something likely have gone wrong?
Step 3: Different angle
Once you have established the context of the problem you’re ready to build a superior expense template.
The most important consideration is that you look at this problem from a different angle to the normal.
You have to believe that someone else in your business has already made their own expense template and if they are part of any fraud they will cover it up in all the usual ways.
The key for you is to take a different look. A different perspective on the issue.
It’s hard to prescribe something that will work in every case but make sure you follow your intuition or gut feel. In these circumstances it will often be your best guide.
What’s your experience on this?