Can Your Business Save More Money?
Saving money as a business owner is not always easy – the consistent expenses are expected, but oftentimes the unforeseen expenses are most difficult. While developing a fund for unexpected expenses is important, regularly reassessing your spending ensures you are not overspending. Many tips for saving money can become routine after you are aware of the impact it makes on your business.
Keep a record of each expense.
While this might seem either obvious or unnecessary to you, recording each expense is vital to maintaining accurate financial records and making sure your spending is on track. Even something as simple as buying coffees for a business meeting should be recorded. Opening a corporate credit card, and using only that for business expenses, is an easy way to keep all purchases in one place.
Calculate how much your expenses vary.
When recording each expense, take the time to look through expenses from previous months or terms and compare. Some expenses should stay the exact same, while others may change slightly. If there is a large difference between two, or the expense fluctuates often, it is worth looking into why that is happening. This might be normal, or it might be something is changing that you need to consider.
Compare prices with other vendors.
Regularly check the price of your consistent expenses with other vendors who provide the same product or service. Even if a cheaper or better option is not available now, this may change in a couple of months. If you really like the company you are purchasing from but find a cheaper price elsewhere, ask for a price match. Sometimes cheaper is not better, so be sure to weigh the pros and cons for each option.
Create a budget, and stick to it.
Make both short- and long-term budgets based on previous years and market research are important. While this can fluctuate or vary somewhat, for the most part it can help you predict your revenue and what you can expect for months to come. A budget is an important part of planning for your company’s future, and seeing a one laid out with each expense can help see the bigger picture and whether each is really necessary for the future of the business.
Make company and employee expense policies.
When employees are hired or when the expense policy changes, make sure to let all employees know the details. Employees should have a copy of the policy that outlines reimbursable spending and other expectations regarding company finances.
Talk to us.
Our services include not only accounting, but also analyzing and advising based on these accounting records. We can look at your budget, or help you create one. We can help guide you in deciding what expenses are absolutely necessary and help you plan for your company’s bright future.