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Chatter is the latest in social media for the enterprise from salesforce.com. It is now generally available as of June 22, 2010. When people talk about the benefits of chatter it is generally in the context of a larger enterprise; Phrases like 'break down silos', 'increase communication', 'foster collaboration' are frequently heard. What is not as often discussed is the SMB market. At first blush you may think, why would I use chatter when I can just talk to the person beside me?

I can think of some good uses of Chatter for an SMB.

• For distributed teams, even if they are small, it aids communication.
• Updates on important accounts or deals
• Collaboration on documents
• Changes to important documents
• Changes in company policies
• Notification that an Expense report has been denied or re-imbursed

Some important considerations:

• Chatter can be used to replace email provided all intended recipients are logged into salesforce.com on a regular basis. If it is an urgent issue it does not help if your users do not log in until the next day.
• Don't use 'chats' in addition to email. People get frustrated with getting the same message via different communication avenues. Most don't have time to read things once, never mind multiple times.
• You may need to define the 'chat-iquette' for your company. Some have found that users are 'self policing'. Someone told me of a co-worker responding to an inappropriate status update with 'facebook contacted us about a missing update'. A humorous way to get the point across without being heavy handed.
• Like any new application there will be some learning curves.

Please share your experiences with Chatter 

• If you are not using Chatter, do you plan to?
• If you are using Chatter did you have to defines 'rules of engagement' or were people well behaved?
• Did most of your users intuitively know what to do?
• Are you seeing any correlation between age and usage?
• What other uses can you think of?

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Now that you have identified your expenses you can determine how much you are spending and what you are spending it on. Depending upon what automation, if any you have in place you can leverage the application's reporting capabilities. This process will also help determine what changes to make to how you capture your expense entries. 

Here are a few things to look out for.

• Are large a large percentage of the expenses in a general category like Travel?  Depending upon the amount, it may be appropriate to break it down into sub categories like airfare, train, car rental.
• Are you isolating those expenses that may have different tax implications?  For example, meals for a consultant while traveling are 50% deductable, while meals while at a conference are 100% deductable. 
• Are too many expenses falling into the nefarious 'Misc' or 'Other' category.  This can be difficult because you must balance the expense of having separate categories for smaller expenses with what value there is in having this information. 
• Are expenses captured at too granular a level? Similar to having too few categories, is it worth the effort?
• Are there some projects (internal or external) that are costing much more than expected.  many times when determining the cost of a project, people costs are the main consideration.  This can be short sighted.

In general, when analyzing your expenses don't focus only on the high ticket items. In many companies there are controls in place to ensure those expenses are appropriate. However, there may be meaningful savings to be realized by taking a hard look that the expenses that are not under those controls. While the current economic climate is the impetus for this type of analysis, it makes good fiscal sense when times are good as well.  In most cases trimming expenses is preferable to trimming headcount.

Look for the next blog for some tips on managing expenses.

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It is a common question both in personal life and business life. 'Where did the money go?'. The first step is knowledge. You cannot manage what you do not know. For a business, the identification of T&E Expenses is easier if some automated system of collection is in place, but absent that it can be an onerous manual process. 

If an automated process is in place, make sure that you are capturing the necessary detail.  Do all expenses get entered? Are the expense categories too general (or too specific)? If the users do not enter accurate data because the system it takes too much time then it is not much better than no system at all. You should also keep in mind the level of detail that is necessary from a financial perspective. Are there expense that do not get classified at all (good old petty cash)? Are there expenses that are categorized too broadly (e.g. airfare, taxi, hotel and meals all categorized as 'travel')? Use the reports available in your system an verify that you are capturing all necessary categories.

If an automated process is not in place, you need to ask the same questions but summarizing the expenses and getting totals is a manual process generally done with a spreadsheet. 

The next question is if all expenses are being captured?  Are there company credit cards that have transactions not reflected in a report? Does everyone enter expense reports?

This is the time make any changes to the classifications and processes to ensure that all T&E expenses are captured and are valid expenses.  Even those companies not impacted by Sarbannes Oxley should ensure that these expenses have the necessary audit trail.  Another upside for an automated process.

Just for laughs some of the things people have submitted as expenses. Unrestrained Expenses

What is the craziest thing you have seen on an expense report?

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In the current economic climate companies are trying to trim costs where ever possible.  This may mean reducing headcount, using virtual meetings or limiting participation in conferences or seminars. Many times this means looking at big ticket items as it seems that is the simplest way to make an immediate and meaningful impact, but is it the best? Spending that is done by the employee, generally T&E expenses, comprise one of the largest portions of controllable costs in many companies.  Surprisingly most of these same companies exercise little or no control over these expenses. Sometimes there is a no company policy for these expenditures or if there is one adherence is sporadic. Generally, the more manual the process, the less control and oversight is realized. Having a comprehensive picture of what expense are incurred for different projects and activities can also provide vital information on what different business activities really cost and provide the data for determining the more profitable ventures.

T&E expenses can be a large number of transactions of smaller amounts so often these expenses fly under the radar as not have a significant impact. Nothing could be further from the truth. The challenge then is what and where to trim expenses.  The old adage of you cannot control what you cannot measure certainly rings true here.  The first step is to define a comprehensive process. This should include what expenses can be reimbursed and to what levels, what supporting information is required, the frequency of reporting expenses and how reimbursement occurs among others. The more that the process can be automated the better. There a a delicate balance between the complexity introduced and the degree of conformity. It is better to have everyone supplying the information than having very complex or rigid controls. This is also where automation can help. If the process ensures that all the necessary supporting information is included before it is submitted to a manager for approval the less resistance there will be to using the process. Additionally, time savings will be realized if there are fewer rejected or not approved expenses that are passed between employee and manager.

Once the process is in place you can then Identify the expenses, Manage the expenses and Analyze the expenses.  Look for future blogs on each of these topics.

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