Sachin Sharma, founder of ProcureDesk, shows CFOs how to fix three cost-control problems: unapproved credit-card spending, invoices without purchase-order numbers, and manual invoice matching. He recommends a requisition process, virtual cards tied to approved amounts, and a "no PO, no pay" policy, plus a fast-track process for emergencies.
Cfo's of growing companies often face cost control challenges. Unapproved credit card expenses or invoices showing up without a purchase order number on it. And your team has to spend a lot of time trying to match those invoices with purchase orders and receipts and so on. Now, if you're a controller of a growing company, this is a very common problem. Receipt every day. Every CFO controller I talk to, they have the exact same issues. So if you are in that situation, this video is for you. I'm going to share here. Quick three strategies that you can implement today to control costs without changing a lot of processes and stick till the end where I'll share one common mistake to avoid when it comes to defining a purchasing policy or a cost control policy. If you're joining me for the first time, welcome. My name is Sachin Sharma. I am the founder of Procure Desk where we help growing companies control costs through better processes. So let's jump right in. Number one is implement a requisition process. So whether you are purchasing using credit cards, you have credit limit with vendors and the vendors are sending invoices. If you do not have a requisition process, you have uncontrolled spending, right? Because you know, surprise expenses shows up and then you're reacting to it. An easy fix for that is implement a requisition process. So everybody creates a request for buying something that gets reviewed by the appropriate manager and so on. It could be a simple process. In your existing tools, emails work to begin with, but you can't scale it or you could just straight away go to a purchasing system that is designed for these controls. So once you have an acquisition process, everything is being reviewed upfront so that when the related expenses or invoices come through, it's easy to match them together. Number two is implement virtual cards. So what do I mean by virtual cards? So one of the things which we see is many companies like the flexibility that comes with credit cards, right? People can just pay it and AP doesn't have to worry about, you know, paying their bills and so on. Depending on the challenge with that is reconciling those expenses and you know, literally chasing people so that you can get the receipts and, you know, settle your credit card bill. So the easy fix for that is you can use technology like ProcureX where you have virtual cards in place during the requisition process. So let's say if I need to go to Walmart to buy some supplies, let's take simple example and you know, maybe I need to spend $150 on it. I can put in a request, gets reviewed and approved. Once it is approved, system issues a card which they can use only for that amount is as simple as that. So now you have two things, right? So you have the card issued, you have the purchase request. You can easily reconcile it. It's very easy to, you know, for the AP team to do that rather than choosing for receipts. So that's number two. Number three is if you are using a purchase order process, implement a no po, no pay policy. Now I know it sounds harsh that you're not going to pay a vendor if they do not, you know, put a purchase order number on the invoice. But that is the simplest way to enforce compliance. What that means is when the invoice shows up and if you have used that acquisition and APO process, combining those two now you can easily say, all right, this invoice is for this purchase order. And if you want to do a three way match, it's just much easier rather than just invoices showing up. And then you're trying to act detective and trying to figure out who who spend this money, right? So those are the three simple strategies you can implement today. One is implement a requisition process, implement virtual cards. And third is implement a no P or no pay policy. Now for the bonus tip or the one mistake I talked about many companies when they implement a purchasing process, they kind of have one process for all. Like they don't factor in emergency purchase. So if I need to buy something now, depending upon what kind of business you are in, maybe you are in a H VAC business and somebody's on the road and they just need to buy some part to go service a customer. Those considerations should be there in the policy. So you should upfront define a process for these. I would say emergency requests. So when that happen, you can tell your employees this is how to deal with it and it's easy for your team to reconcile. So I hope you like this video. If this was beneficial to you or you to your team, go ahead and hit the subscribe button. So when we release videos like this, we'll let you know. And thanks for joining me today and I'll see you in the next video.
