How to make sure you're not paying bills from the beach

Hey there,

There's one part of a business that no Boss wants to open up to their team. The finances.

I get why. You don't want them to know just how close to the wire you sometimes run in case it worries them and they leave. You don't want them to know how much the business is 'making' in case they ask for a bigger share of it. Or maybe you simply don't want them to judge you.

Making emergency payments while you're supposed to be sunbathing might be a price worth paying to preserve your financial privacy, but you know what? This isn't and all or nothing decision, you can let your team take some financial responsibility, without handing them your wallet.

So in this newsletter I'm going to talk about how you can use your holidays to start handing over financial responsibility to your team:

Give everyone an emergency fund they can access while you're away.
Set limit(s), and give people a checklist for logging their spend
When you get back, review how it worked, so you can do it again.

Let's dive in.

Give everyone an emergency fund they can access while you're away.

Give each team member a pot of money to spend from if they need to.

It could be cash, but nowadays it's much easier to give them a pre-paid business card, or a debit card with limits.

There are many options available. Which you choose depends on the kind of business you run, whether you need people to be able to make international payments, withdraw cash from an ATM, wheterh you want to set a time limit as well as a spending limit, and whether you want employee spending to be integrated into your accounting software.

Personally I'd go for one that gives you full control of spending limits; gives team members full visibility over their own spend; lets you control everything from an app and integrates with your accounting system. What you spend in banking fees will be almost certainly outweighed by the time you save in bookkeeping.

There are of course multiple 'comparison' sites out there too, so make sure you check out enough of them to get a full range of options. I liked www.businessexpert.co.uk, even though it doesn't include the account I would choose (Monzo Team), because of the questions it gets you to think about.

Remember, you can open more than one bank account for your business, so if your current banking provider doesn't offer this facility you could start up another account just for this purpose.

Remember too, that you don't have to set the same limits for every employee, and some options allow you to give different levels of access to different people.

Set limits, and give people a way to log their spending so you can review it together afterwards.

Set limits

If you've put in place some of the things discussed in earlier newsletters, you'll already have a good feel for what your team might need to spend, and how likely it is that they'll need to do that while you're away. For example:

If you've already put in place your complaints handling process, trained your team to run it using your specific customer profit-margins, and tracked actual complaints since then, you'll already know roughly how much a team member might have to spend handling a complaint and how likely that is to happen while you're away.

If you've already trained your team to do quotes for you, you know how much they might need to spend doing this while you're away.

If you've already thought through how to welcome new Clients on board, and trained your team to run your onboarding process, you'll know how much they might have to spend bring on new Clients.

And if you've already automated payments into and out of your business, you know that's what might come is by definition unexpected, and unlikely to actually happen.

So now you cab use all this information to set a limit for each team member's pre-paid card.

Alternatively, you can simply set each team member a limit you feel comfortable with. You'll soon find out if it's not enough when you get the phone call or email in the middle of your break!

Remember to allow for the possibility that everyone might have to spend all at once, and make sure the cash flow will cover it. For example, your team may need to club together for a larger purchase.

Give people a form for logging their spend.

You want people to think about their spending before they do it, so here are some questions you can get them to ask themselves:

Reason for Spend
Amount
How does this help us deliver on our promise?
Could this wait until the boss comes back?
If not, why not?
If yes, why?

I've made you a simple Team Expense Log template that can be used both as a prompt, and as a log of what happens.

Of course if you use the right pre-paid card provider you'll be able to see all this anyway from your app. The real purpose of the prompt and the log, is to help your team get used to the idea of having a budget to manage.

When you get back, review how it worked, so you can do it again.

As always, make time for a review of how things went when you get back.

If you feel reasonably happy about how it went, you could bring everyone together as a group, so they can learn from each other.

If, on the other hand, you feel someone misunderstood what they were meant to do completely (or you suspect worse), then it would be best to review things on a one-to-one basis.

The Review Agenda is simple:

Go through each Team Expense Log, and ask:

Did it work?
How could we prevent that happening again?
Do we need to adjust the budget?

Then

Agree any Action to be taken to fix the problem.
Agree who is going to do it and by when.

And as usual, here's a Team Expense Review Meeting Agenda template for you to copy and download.

A holiday, a stay in hospital or a desire to get that book written might be what makes you set this sort of thing up for the first time, but I'm confident that once you have it in place, you won't keep this just for when you can't be around. Once you realise you can safely let your team make some financial decisions, you won't want to stop.

That’s it.

Here’s what you learned today:

If you've already automated expected payments into and out of your business, you really only need to worry about unforseeable expenses while you're away. That limits the scope for making mistakes.
Giving team members limited, secure and observable access to business funds is easier to do than ever, and well worth considering to cover what might happen while you're away. What you might have to pay in additional bank charges will almost certainly be saved in admin costs. What's more, you might decide they are worth it for day-to-day expenses too.
This is not just admin. As the Boss of your business, you take the consequences of any decisions you make. Letting your team take responsibility for emergency expenses could be the first step in helping them to understand what having a say in the business really means.

Next time, we'll look at a key skill you need to learn if yu want to be able to take regular time away from your business - sampling.

Till then, why not test how giving your team their own budget to spend could work for your business?

As always, if you want to bounce ideas around, just ask. I'll be happy to give you 20 minutes or so if you need it.

Thanks for reading!