I don’t know about you but unwelcome news, especially the unexpected that involves a payment seems to come in clusters.
Unwelcome and, I think most would agree, unavoidable costs. Stretching finances in a short 4 week period on top of an already stretched budget. Most can relate.
There are also those unwelcome surprises that are wholly avoidable that can cost you dearly in the short term. Missing a credit card payment because you ignored the bill on your desk for 3 weeks. Failing to renew your car insurance and then being involved in a minor RTA. Not accepting your new mortgage offer before the deadline to then receive a new quote with an extra 1% added to the rate…
These are of course fairly typical personal / home based examples yet they represent what occurs within business. There are unexpected costs associated with running your business which as an owner you try to mitigate for in budgets. However, there are several ways in which a business can create even greater, yet ultimately avoidable costs to itself or even decrease overall revenue by missing out on discounts (reductions) simply because of poor planning and no formal process management. For example:
The overdue invoice - much like the personal credit card example, missing the payment deadline to a supplier could create a couple of extra costs. An immediate increase through the application of interest to the invoice and potentially the same supplier could impose shorter payment terms, reduce access to favourable prices, charge a higher rate / premium on your account etc. All creating a greater financial stress on the business.
The uninsured - Your onsite forklift driver (Felicity) has to complete a formal annual competency review as a requirement of your business insurance. It is the company's responsibility to ensure Felicity renews her certificate each year and, in fairness to Felicity, she did pop her head into the admin office last week to say she thought it was due. Unfortunately, despite the insurance being valid, when Felicity ran over the foot of another employee and consequently dropped £100,000 of goods in the ensuing chaos, because the competency certificate had expired, none of the accident costs or the legal fallout were covered.
The audit failure - Your long established small business has a relatively low staff turnover but there have been some in and out the door. After a particularly successful couple of years, the business finds itself required to be externally audited. Unfortunately whilst reviewing the company data, the auditor finds multiple breaches related to the holding of HR records for employees long since departed. The ICO imposes a significant financial penalty on the firm and strongly advises the company to make significant changes to process before the next audit, else further (harsher) penalties will be applied.
I’ll stop being so dramatic now. Hopefully I have painted a picture of the scenarios we are talking about - if the business process had been correctly managed, these costs would have been negated or severely minimised.
So what do you do? One option is to simply tell someone in each respective role that they are responsible to make sure deadlines, legislation and compliance are maintained for their department. A second option is to make one person responsible for maintaining all of those things across the company. A third option (and optimal in my humble opinion) is to formally digitise those processes, remove the human inconsistencies and implement a central, audited and automated platform that can protect the company from these costs and more.
By using technology, specifically digital process automation tools, no special employee knowledge is required, the rules and management of the tasks are set in advance to ensure all ‘surprises’ are mitigated:
The overdue invoice - on receipt (by email), the invoice is automatically stored (including the due date) in the central document management system (DMS) and an automated process integrates with accounts to show receipt. A task notification is sent to the AP department requesting approval for payment. On approval, the payment is made. If the initial task email is ignored for 7 days, another reminder is sent with the inclusion of the department manager. If that is ignored, the system escalates the task to a director. If someone is on holiday, the task is redirected automatically. No invoice is misplaced, ignored or goes unpaid unless intentional.
The uninsured - On completion of the annual forklift certification, the certificate is stored in the HR section of the DMS. Because of the type of document, automated rules apply a task action date in 9 months from the valid certificate date. 9 months later, HR received a task notification to book the re-certification. If the task is not marked as complete within 10 days, it is escalated to management. If the task is not marked as complete by the due date, directors are messaged and the certificate holder (Felicity) is messaged to say she is now unlicensed and should not drive the forklift until the issue is resolved. Even if the certification is not renewed (which it should have with all the reminders), everyone is informed and the employee(s) will not be put at risk.
The audit failure - All employees have a folder within the central DMS. All documents related to their employment are stored securely within that specified folder with restricted access to the employee and HR management only. All documents within the folder are governed by a master record retention rule that initiates a task when an employee leaves the company and a last day of employment date is entered. The records management rule will in 71 months time send a notification to the head of HR that the folder related to employee X will be permanently archived / deleted automatically in 30 days unless there is manual intervention. The HR record lifecycle is managed from day one, based on the document type recorded and no manual oversight is required.
Too simple to be true? Ask me about it.
Toby Gilbertson, Director. March 2025
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