Minimizing excess spending is a priority for most businesses. Your facility manager plays an important role in helping to keep costs down. They handle a variety of responsibilities related to your lease negotiation, financial data storage, and other areas related to spend management.
Here are six essential spend management practices facility managers should implement when overseeing the spend management of your company.
1. Stay on Top of Lease Renewals
Losing track of lease renewals can result in disruptions to your budget and the day-to-day operations of your company. Your rent may change when you renew your lease. Forgetting that your renewal is coming up until the last minute is a liability. It can make your company’s ability to adjust your budget to account for any changes more difficult.
Staying on top of when your lease will need to be renewed also gives your facility manager plenty of time to carefully consider if doing so is in the best interest of your company. They need to consider if there are any significant issues with your building or the terms of your current lease that may mean it’s time to consider moving in a different direction.
2. Renegotiate High Short-Term Rates
Short-term rates, such as certain types of interest rates and leases, tend to cost your company more over time than it would typically pay over a longer period of time at a lower rate. Searching for exceptionally high short-term rates can help your company save money. Many of these rates are renegotiable after a company has reliably paid them over a given period of time and shown commitment to continuing to do so for an extended period of time.
Not every high rate will be eligible to be lowered. But having your facility manager look closely to identify areas in which your company may be able to negotiate lower payments can be well worth your time. Of all the spend management practices your facility manager can prioritize, this one can be the most effective in lowering expenses.
3. Keep Your Data in One Location
Storing data related to your company spending in multiple physical and digital locations can make it difficult to find a particular piece of information when you need it. It can also make it difficult to know exactly where all of your money is going.
Instead, keep all your data together in one centralized location, such as a complex digital spreadsheet that includes several types of information and keeps track of everything your company spends money on within a particular time frame. Spend management practices that consolidate data will help ensure that you see the full picture of your company’s financial situation. Then there’s less risk of your team missing essential data housed in another location.
Example: Utilize one digital spreadsheet.
4. Tidy Up Your Current Database
Making sure that your stored financial data is organized and accurate is also a must. Your facility manager should periodically go through your company’s database to ensure that no errors have been made, especially mistakes that may be costing your company extra money. Duplicate charges, missing receipts, data entry errors, and other issues can cause your company to lose money unnecessarily. Poorly organized data can also make it harder to know exactly where your money is going. Looking through this data regularly helps your company by allowing you to be sure of what every penny is being used for. It should be a top priority on your facility manager’s list of spend management practices.
Example: Look for duplicate charges.
5. Reevaluate Your Vendors
If your company frequently purchases tech, office supplies, food, or other products from a particular vendor, it is a good idea to periodically compare your vendor’s pricing with similar companies to make sure that you are getting the best value for your money. Brand loyalty can give your company consistent products, repeat customer discounts, and a strong relationship with your regular company. But selecting a lower-cost vendor may be an option if your company is looking to save money. Making sure that your vendor is consistently transparent regarding cost breakdowns and the specific products or services that are provided also helps facility managers keep track of exactly where their money is going.
Example: Search for lower-cost vendors.
6. Work Closely With Your Finance Department
Finally, facility managers should work closely with their finance departments. Everyone should be on the same page when it comes to making large purchases and other significant financial decisions. Strong communication between departments is at the core of well-developed spend management practices. It helps your company save money by allowing your facility managers to make sure that any potential spending fits into their budget before overspending can occur.
At Util Auditors, we are here to help companies of every size identify ways to save money. Our financial, utility, contracted, and commercial services are the perfect solution to proactively minimize spending and free up more funds to use to grow your company. Contact us today to learn more about the services we offer or to start your free review!