Cutting costs can be difficult when you need a lot of different services or equipment to run your business efficiently.
However, there are some things that you can do to help keep track of your business expenses to cut costs later on any unnecessary purchases or payments.
The Benefits of Keeping Track of Your Business Expenses
There are some benefits that come with keeping track of your business expenses.
You stay within the business’s budget
This helps you spend more responsibly when you monitor and keep track of all the business expenses and avoid any unnecessary spending.
You are documented and ready for when the tax season rolls around
Keeping records of all the expenses that the business has paid for during the financial year can help you be prepared for tax season and also help you get some money back.
Here are some of the expenses that can be tax-deductible:
- Office suppliers
- Bank fees
- Internet and phone costs
- Travel expenses (business meetings)
- Business lunches/Meeting expenses
- Charitable donations
- Rental payment
Have better control over business cash flow
This way you can keep more money in the business than having it flow out to pay for expenses.
You will be able to see how profitable your business is early on
Tracking your expenses will help you determine how profitable your business is each month without having to wait until the tax season.
Better rewards for your employees
With saving money comes more opportunity to give employees rewards for saving on expenses especially if they have been keeping receipts and keeping track of any business expenses that they have made while at work.
How to Track Your Business Expenses
Keeping track of your business expenses can help prevent any loss of receipts and makes it easier to have all your expenses on hand to fill out your tax forms.
You can use software known as a business expense tracker app to help keep all your data in one place. These apps are known for:
- Connect the business credit card and bank account to make tracking of expenses automatic.
- Take photos of receipts so that you have a record of the payments/expenses on hand should you lose the actual physical copy.
- Categorize all expenses so that you do not need to sort them out and section them when doing your taxes.
- Any expenses can be marked as billable in the app and added to it a markup which then gives you a refund in the invoice.
How to Reduce Ongoing Business Expenses
Here are some tips you can use within your business to reduce the amount of monthly expenses that you have.
Reducing Utility Costs
To find cheaper utility deals for your business you can compare business electricity by using an online comparison tool to help you find a deal that fits your budget and gives your business the energy it needs to operate efficiently.
Here are the easy steps you can take to reduce the amount of money your business pays on utilities.
- Compare your monthly bills to see how much money you are spending.
- Check to see how much time is left for the contract that you have signed.
- Compare quotes from surrounding suppliers to find the one that is cheaper than the current utility supplier you have.
- Once you have found a cheaper supplier you can make the switch and sign the contract.
Another savings you can make on the energy and gas bill is to make a switch to energy-efficient bulbs or LED light bulbs to save on the amount of electricity that you are using.
Employees can also switch off all appliances, electronics, and equipment that they are not using when at work to save on electricity.
To save on the gas bill, employers can ensure that the building is properly insulated and that employees are allowed to wear warm jackets or coats as part of their uniform inside the premises to avoid having to use a heater.
You can also opt for using electric heaters over gas ones to help shave off the gas bill.
To save on the water bill, here are some methods employees can use when at work.
- Reuse water where possible to avoid water wastage.
- Close taps when not in use.
- Report any leaks so that it can be repaired.
- Employers can have a water cistern installed in their toilets to ensure the reduction of water usage when flushing.
Reduce Internet Costs
Find a package that is cheap but meets the internet needs of your business. Restrict internet usage to only business needs and pay for a broadband speed that is necessary for your business.
Although having the internet is an important tool for effective communication within a business, you do not always need the highest speed or the uncapped data if your business is small and doesn’t depend on communication to generate revenue.
Save Money on Wastage
Businesses will have to pay for their waste removal and so you can cut this in half by implementing recycling or cutting down on unnecessary wastage entirely.
Have every employee re-use their coffee mug instead of throwing out paper cups each day. Also if your bins aren’t as full, you can shift the collection to every second week instead.
Cut down on office space
If the business doesn’t need all staff at work all the time for business to carry on as normal, then cutting down the office space will save the business lots of money.
Getting smaller premises while employees work from home and check in once a week can also save on other expenses like fuel and utility costs as fewer people are driving in to take meetings and using the utilities at work.
Conclusion
Reducing expenses within your business cuts costs and saves money for the business by keeping money flowing into the business with minimal payouts.
This also helps the business work out its profit early on in the financial year and will motivate employers to avoid any unnecessary costs that have a negative effect on the cash flow of the business.
Ongoing business expenses will vary from month to month but it is important to constantly keep track of all expenses to ensure that you find cheaper solutions to keep the business running
smoothly with a positive cash flow.
