Do you have a budget bandit in your team?

What is a budget bandit?

Have you ever had a manager impulsively ‘shout’ Friday-night drinks for their team and then try to expense it back to the business? Or an office manager who bought flowers for the office without checking whether there was budget for them first? If this sounds familiar, you may have a budget bandit in your midst.

In short, a ‘budget bandit’ is an employee who, often unintentionally, overspends or misallocates company funds and while these behaviours aren’t inherently malicious, they are detrimental to your budget management efforts.

Types of Budget Bandit's

The over spender

As a CFO or business owner, you’re no doubt well aware that other employees might not be as cautious about spending as you and your finance team are. A common frustration is when a team is allocated a budget for the quarter, half year, or year but routinely goes over their allocation. It could be the marketing team oversubscribing to marketing technology or the HR team overspending on social events for the organization. No matter what it is, it’s an expense that shouldn’t have been incurred.

To outsmart an overspender, your finance team needs to be on the front foot with how much money is going out the door. The best way to achieve this is by rethinking how your team manages and enforces employee budgets. Switching to virtual corporate cards with built-in budget controls ensures that employees spend within their budget limits and only on approved items. Rather than waiting for employees to overspend and submit a reimbursement, virtual cards allow your fiance team to control employee spending before it even happens.

The careless spender

Just as some people will overspend, others might spend their budget on the wrong thing. They may have been allocated a certain amount for stationery, for example, only for your finance team to discover the funds have instead been spent on morning tea supplies, leaving the office without any paper for the printer! Or a budget allocated to travel costs might get diverted to a team lunch. These budgeting mistakes can leave essential business needs unmet, and there’s not much the finance team can do about it once the money has been spent.

The careless spender is best reined in with a strong budget management tool that restricts how much they can spend and on what. Weel helps finance managers and business owners allocate team and individual budgets, and restrict spending to predefined categories. By providing employees with a virtual debit card with pre-defined spending limits and expense categories, you can effectively eliminate the risk of careless spending.

The exuberant spender

Another key member of the budget bandit posse is the employee who offers up the company card at every opportunity, regardless of whether the expense is within their allocated budget. This employee is all too often a senior exec or manager, making it particularly difficult for finance managers or business owners to curtail their business spending habits.

Managing an exuberant spender starts with establishing a budget before the spending happens. Using a robust budget management tool like Weel avoids any ‘blank cheque’ scenarios where employees have unrestricted access to company funds, ensuring every team member is held holding everyone accountable for their spending.

The best ways to manage a budget bandit:

• Agree on budgets before spending starts – there’s no point in allocating a budget if your team doesn’t intend on sticking to it.
• Implement a budget management tool, making sure the whole team understands why it’s great for the business.
• Provide your team with individual virtual business cards so that each employee can be held accountable for how much they spend and what they spend on.