It happens all the time. There’s a gym membership you’ve been meaning to cancel. You still subscribe to streaming channels that you don’t watch anymore. And slowly but surely, you are losing money and creating a budgeting nightmare. All those unnecessary recurring charges add up– yikes!
Now imagine this scenario in the small business setting. What happens when those charges add up among several employees–or even former employees? An even bigger budgeting nightmare.
When unnecessary charges go unmonitored, they can evolve into a huge problem. If you suspect there’s even a small amount of this happening at your business, then it’s time to consider some form of continuous auditing.
WHAT IS CONTINUOUS AUDITING?
When financial professionals talk about continuous auditing, they are referring to a technology-driven process that is designed to automate error checking in real-time. Here are a few examples of areas where continuous auditing for unexpected costs will benefit you immediately.
- Outdated or duplicate subscriptions: Like the scenario for personal budgets, your team members may have unnecessary subscriptions still billed to the company. This is often a result of team turnover. Outdated employee accounts may still be tied to subscriptions that should have been canceled.
- Plan costs misaligned with usage: Like subscription services, you are likely paying for essential services — telecommunications, cloud storage, etc.— via monthly or annual plans. Do you know if your team is consistently exceeding the limits of a lower-capacity plan?
- Overages and surcharges: The costs outlined in your contract may be creeping upward. While those notifications can be long, do not forget to review them. Additionally, your team may not be following the terms of your contracted services, like shipping, and are inadvertently triggering penalties.
- Not following the rules on discretionary spending: Have you set budgeted limits on items you reimburse? Is every team member following those limits? While exceptions to the rules may be small per person, if it happens frequently, an “everyone is doing it” mindset creeps in, and overages creep upwards.
- Not following customer/client policies: For the most part, policies for discounts and returns should be set and followed. If employees are taking a more “flexible” approach, this could be a problem area.
BOTTOM LINE: BUSINESSES OFTEN RUN ON TIGHT MARGINS, AND PENNIES ADD UP.
These unexpected and unwatched costs are the bane of every company. If it’s your practice to wait until a quarterly or yearly review, it may be time to switch to continuous auditing.
Our team can recommend the right Continuous Auditing Technology for you — automatically increasing preventive controls and saving you money right away. Schedule a consultation with us to begin.