Case Study
Spend control in trying times How to prevent non-essential spending in a multi-entity hospitality business
James Couch, Director at Williams, Stanley & Co With nearly a decade of experience in the finance industry under his belt, James commands comprehensive expertise in supporting clients and businesses on an international scale.
Williams, Stanley & Co is a UK-based accounting practice focused mainly on the hospitality industry, with 90 percent of their clients being restaurants, bars and pubs. They provide accounting, bookkeeping and business advice services.
T
he growing need for spend control: a case study with a hospitality business Spend control is all about getting a real-life picture of who spends what, when and why. Formal authorisation processes ensure that any spending is properly authorised by the appropriate people. Moving such processes to a digital environment facilitates efficiency and transparency, which is not only good for all types of businesses – depending on its maturity, scale and type, every single one will experience this necessity eventually. For many hospitality businesses it became a lot more urgent to establish spend control during the COVID-19 pandemic. Bars and restaurants worldwide are having a tough time: the lockdowns, finding new ways to keep going, for instance, by switching to delivering, and probably the most frustrating aspect of all – the uncertainty, as no one can predict when the conditions are going to improve. Cutting and controlling expenses is even more crucial in the current circumstances. Purchases that are not essential for now can be postponed and only the best suppliers with the best prices will be chosen, but there still will
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be expenses. And these must be tightly controlled. One of the hospitality clients of Williams, Stanley & Co decided to implement spend control when the COVID-19 pandemic hit: with furloughing and the overall situation, they have to look very closely at their spending and approve everything properly so that they always know exactly what’s happening on their bank account. Before, they had an email approval process in place. However, when this client started to approve every single expense it became extremely complicated: for every approval, individual invoices had to be downloaded, put into .zip files and sent to a specific person because they wanted approvers to have copies of all invoices in front of them. We knew that there is a much better way of doing this, and implemented ApprovalMax. Approval workflows for bars and restaurants This client is a group of companies, and 9 out of 10 use ApprovalMax. Each one is getting tracked separately. All of them use the bill approval workflow; the approval rules for the bars differ from those for the restaurants.
At the moment, the bars have a more complex approval system. In the first step, the General Manager approves all invoices. In the second step, the Operations Manager authorises all invoices that exceed 250 pounds. Invoices with an amount higher than 500 pounds go to the Finance Director; and if the amount is more than 1,000 pounds, they’re routed to the Company Directors. In this last step it is sufficient if either one of the directors approves. When setting up an approval workflow in ApprovalMax, it’s possible to define who approves what – for example, but not necessarily, based on the invoice amount. To achieve a more granular approval workflow and split the responsibility between approvers, Xero tracking categories are useful. Alternatively, approver rules can depend on the respective accounts (GL codes). This flexibility enables businesses to set up approval workflows of any complexity, with the right people authorising the expenses they are responsible for. Audit trail functionality for internal reporting and control Although this hospitality business doesn’t use the audit trail feature
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