That’s the question we put to a number of business owners recently.
Their response was unanimous and hardly surprising, “What the hell is a meta-spend?”
Good question, and one that was recently addressed by the Business News Daily.
Matt Clark, COO of cloud-based financial process provider Corcentric, defines “meta-spending” in this way…
The money a business spends to spend money.
Example: hidden expenses around credit card processing fees for online bill payments or out-of-network ATM withdrawals. Before you shrug that off as trivial, get this… last year America’s three largest banks collectively earned more than $6.4 BILLION from such fees alone.
Clearly, it all adds up.
Whilst the core focus of business is increasing revenue, Clark says minimising expenses should sit alongside that.
Moreover, Clark believes it is the “meta-spend” that can wreak havoc on your bottom line, particularly during growth periods.
“When companies are first starting out, meta-spend can be managed because spending is happening in a smaller, more controllable environment,” said Clark. “As businesses grow, it becomes harder to control, and expenses grow at a pace equal to or faster than revenue growth. Meta-spend cuts right to the core of what all companies are trying to do, which is grow profitably. When companies are not able to grow profitably, meta-spend is often the culprit.”
The solution, Clark suggests, is offloading the burden of cost reduction onto folks who “eat, sleep and breathe procurement!” He says in doing so, businesses can maintain focus on their core competencies.
That’s exactly the point we made in a recent post outlining the 7 benefits of outsourcing. In that article we described how taking such an approach can even stimulate growth.
Cost reduction is our core competency.
Worry about your meta-spend no more.
Contact Rod for a free consultation 021-923424 or firstname.lastname@example.org