Track Of Expenses – Expectations vs. RealityNovember 22, 2022
“I want to… but…”
The gap between the want and the actual situation defines the problem of expectation versus reality. Expectation is fine, but unless you are in touch with reality, you will not know the actual progress or status. By tracking expenses, you can know what and how much to expect.
Why should you track expenses
One thing every law firm or legal department should be prepared for is the unexpected. By tracking expenses, you will gain the best insight into your business finances. If not, it is easy to lose track of the expenditures. When all the expenses have been mapped out and accounted for, your team and you will be accountable for the spending habits. Tracking expenses allows you to fix the unaccounted or unwanted spends and can help you go further with savings.
In a law firm or legal department, the expenses can be varied. The expenses may be case expenses, court expenses, business expenses, office expenses etc. When you track expenses, you have a clear idea of where the money is being spent. Having everything in one place helps address issues at the right time and ensures you stay within budget.
Ways to track
There are primarily two ways to track expenses – the old school, offline method and the efficient digital way.
When you track expenses by the old school method, you stand to lose more than you gain. Loyalists may argue that there are still many benefits to be gained by tracking and accounting by the traditional method. For the sake of argument, let us evaluate a few claimed benefits –
It is safe
Really? For whom? How often have you seen faded receipts or illegible / damaged expense sheets? If anything, it is safe to say that it is not safe at all! Losing a physical document due to damage, misplacement, theft etc. is very easy.
It is reliable
It is good as long as it does not go bad. Physical expense sheets are error prone.
It is easy
When you have a lot of time at hand, it is easy.
It is efficient
For your clients, maybe. After all, who doesn’t love a discounted bill? Physical tracking is kindness to clients. Bills are lost, many expenses are left uncounted, and calculations are often erroneous. All in all, your clients will love it. But your organisation won’t.
Jokes apart, the days of physical tracking are long over. Online tracking is what you should use. Software, Google spreadsheet etc are safe, reliable and extremely efficient. If you integrate tracking and automation, what you will get is a system that is smart and transparent. You will receive reports that will give you better visibility.
Online tracking comes with numerous benefits. A few notable benefits are
- Saves time
- Saves money
- Real time visibility
- Better accessibility
- Compliant with audits
- Better awareness about cash flows
- Helps in better and faster invoicing
- It helps you stay within budget
Tracking expenses gives you a starting point and a point of action. With the data available, you can reduce the gap between where you are and where you want to be. The gap indicates the progress you need to make. If you want to save money, you must start tracking. Though it may not be possible to cut down on expenses, with tracking, you can identify leaks and optimise the processes.
Start today. Track the expenses at your organisation. If you wait for tomorrow, it will always end up being another tomorrow. Become aware of your spending and have better financial control. You can make the process of tracking easier with an App or Software using Manage My Lawsuits.
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