With the end-of-year holidays edging closer, industries are starting to make plans to halt operations for the few weeks of the period of transition into the New Year. Employees are invariably the beneficiaries of such plans, with many of them being granted time off work for the Christmas period.

The said period comes as employees usually receive their bonuses, which makes it a difficult time to exercise caution for many when it comes to spending. Atlas Copco leads industry as a product, technology and service solutions provider through its business areas, Compressor Technique, Power Technique, Industrial Technique and Rand Air. The organisation has also earned a proud reputation for being an employer of choice through its commitment to all its employees. It is for this reason that Atlas Copco Holdings Controller, Ashlan Reddy, has shared expert financial advice for both employees and businesses.

A member of the Association of Certified Chartered Accountants (ACCA) and currently pursuing his Global MBA through Oxford Brookes University in the United Kingdom, Ashlan has also worked as an accountant at Atlas Copco for 10 years, which has seen him occupy various roles within the field. He believes there are ingenious strategies to curb capital expenditure that can and should be employed by businesses particularly during this time of the year.

“Regularly review your expenses to identify any inefficiencies or areas where wastage is prevalent. Avoid the habit of committing to an expense for years, without reviewing these costs. This also requires negotiating with vendors, for example, on bulk purchases or multi-year contracts.

Adopting a Just-In-Time approach to production will allow minimal inventory to be on hand, thus reducing inventory and storage costs. And finally, specifically with machinery, regularly service this equipment as per the manufacturer’s requirements. This will save a whole lot of costs and hassle in the future.”

Ashlan puts the many financial mistakes made by employees during this time of the year down to three main things: buying on impulse, buying on credit and not budgeting. “Planning and discipline are the key skills to apply in order to be smart with your spending and avoid the financial strain. If you start planning your holiday shopping early, it will help you avoid the pressure of last-minute purchases, which often leads to buying on impulse and overspending. Take your time to research, compare prices – ideally create a list well in advance and stick to it. But even then, reconsider whether what’s on your list is really needed. And by doing this you’re likely to avoid spending money that you don’t have by using credit.”

Ashlan also places emphasis on putting money away and says the practice ought to not be an after-thought but rather one that is taken much more seriously. “Prioritise saving and investing – that should be your number one priority with anything you earn. If you don’t already have a regular investment plan in place, start one as soon as possible. There’s a saying that says, ‘the best time to start was yesterday and today is the second-best time’. So, start as soon as possible and decide in advance how much you will put away for this purpose. And only then start to budget for any expenses.”

“Budgeting is a means of ensuring that one doesn’t spend on more than what they had planned,” adds Ashlan. He goes on to give practical examples of how best to execute this basic and yet important exercise. “It’s best to write down your list of items you plan on buying or to keep it on a spreadsheet, somewhere you can see it - don’t keep it in your mind. As I mentioned, your priority should be to save and invest: decide on that amount, stick to it, and no matter what happens, that’s the amount you’re putting away.

“Secondly, list your essential expenses – usually the dreaded debit orders. And then finally, whatever is left we can assume will be available to spend on everything else. You can decide whether you want to further categorize it: ‘take-aways’ or ‘going out’ – never exceeding this ‘everything else’ amount. And if you stick to that, you’ll not only be in a great position to control your spending, but you’ll also grow your financial situation with these investment plans already in place.”

Using an individual’s earnings to lead a balanced lifestyle is also highly recommended by Ashlan. He acknowledges that spending generously on things that make one happy is, in fact, as important as putting money away.

“If you see the value of investing more, and if you are able to invest your bonus, that’s definitely a great option. But always find a balance between investing and living. Don’t neglect the need to spoil yourself responsibly. Remember that planning ahead is the wisest course of action to take because you will avoid the shortfalls and regrets once the year-end dust settles.

“Quality time with loved ones, creating memories and celebrating life are priceless experiences that we can enjoy. So, focus on those experiences and enjoy the months ahead without the financial stress,” concludes Ashlan.