It’s easy to spend other peoples money

Black Friday 900x506

Margaret Thatcher famously said - "The trouble with socialism, is that eventually you run out of other peoples money to spend". Regardless of your political views, the point is well made. It's really easy to spend other peoples money. Just look at the reports coming out of the UK government about wastage on an epic scale. £8 billion wasted on PPE that will never get used. £350 million wasted on fruit and veg that was never delivered to schools. One insider on the NHS claimed that 40% of all spend is wasted. These are horrific numbers by anyones standards and the events of the last two years, coupled with at times blind panic, do not justify the wastage. 

Most business and organisations operate to a higher authority. That can be shareholders in the case of Zahara or Trustees with a charity or school. There is also the bank to think of. We simply can't spend money with wild abandon, without thinking of the impacts on cash flow. We have to balance necessity with the nice to haves. 

In most organisations the obsession is the top-line. Doing everything we can to increase sales or increase revenue. Software is evaluated for lead generation. Return on investments are used on marketing investments to make sure the sales funnel is improved. There is less scrutiny of sales costs if the results equals more sales equals more revenue. 

The bottom line is something this government and pretty much every other government over the last 40 years seems to have no concept of. Plug holes with borrowing and put the responsibility onto subsequent generations to pay it off. But we don't have that luxury in business. No. We have to make ends meet. And here's the part where I link this to what we do. Zahara is all about controlling costs and scrutinising spend. Making sure things are rejected when they should be rejected, because there are always alternatives. This can be anything from those sales funnel enhancers above, to materials for a building site or consumables for a school. Make it someones responsibility in your organisation to make the point "No. You can get it cheaper from XYZ" or "No Lizz Truss, you aren't using the private jet you can go Business Class and save £300,000 of tax payers money".

If you aren't using spend approvals right now, we strongly recommend you switch them on or switch over to them. It's good for the bottom line. Zahara is good for the bottom line as well.  

Previous

5 New Year’s Resolutions for a better business in 2022

Next

Accounts Payable Software for care homes- A few myths debunked.