Getting control of your business expenses is one of the most important things you can do for your small business or freelance career.
However, finances in general can be quite daunting for any person. It’s even worse when you have to make sure your business doesn’t close due to financial difficulties.
But finding ways to cut down on your business expenses can be quite difficult.
That’s why we’ll look at the 5 best ways you can start doing that today.
#1 Use software to track business expenses
While there are many things you can do manually, in this day and age it is becoming more and more unnecessary.
You can automate your finances quickly, easily and cheaply. With the right accounting, invoicing or expense tracking software, you can make sure your expenses are recorded and measured regularly.
That way you know what to change, when, and how.
#2 Keep your finances separate
Although many business owners know this rule in theory, they often break it by mixing up their personal and business finances.
However, this is dangerous, not just for your business, but by the time it comes to do your taxes, you could get into serious trouble.
Get a separate bank account and credit card for your business and use it solely for your business expenses.
#3 Keep your receipts
You should always, always, always store any receipts related to your business expenses.
One big reason to do so is to help you more accurately keep track of your business expenses.
However, the other reason is that you’ll need your receipts in case your country’s tax institution, such as the IRS, decides to audit you.
While the audit will be difficult in any case, they can be a lot faster and less painful with accurate receipts.
#4 Check your financial statements
Beyond that, you should make sure you check your three important financial statements: your cash flow statement, profit and loss, and balance sheet.
The cash flow statement lets you know how much cash is flowing into and out of your business for any specified time period.
The profit and loss statement will show you very quickly what your business expenses and income are.
Finally, your balance sheet provides you with an accurate snapshot of your company. It also provides details about your assets, liabilities and shareholders’ equity.
#5 No more procrastination
While this may seem like accusation, for many small business owners it is a reality.
Small business owners tend to have a lot of responsibilities on their shoulders. Over time, they can start feeling overwhelmed by the amount of work.
That’s when procrastination comes in, and they just put off their responsibilities for tomorrow, tomorrow, tomorrow.
Pretty soon it’s three months late and the expenses are piling up. Don’t let that happen.
Take care of your bills and send out your invoices as soon as possible.
That way, you can have greater cash flow and fewer late bills to pay.
These five tips will help you to take greater control of your business expenses.