If you manage a business, you probably know how quickly costs can add up. It’s a constant balancing act between spending and saving to manage business expenses efficiently. As your business grows, it can become challenging to keep a watchful eye on every one of your costs. To find that middle ground and stay on top of your business spending, practice these habits:
Focus on what your business needs, not what you want
It’s simple — the larger your business grows, the more you need to spend. With a larger budget, it can be easy to give less thought to the services your business is purchasing. However, having a larger budget does not mean you should stop keeping a watchful eye over what you spend. If you remain prudent about your expenses, you could make a big difference in monthly expenses. Before you purchase a service or amenity for your business, ask yourself if you need it. Is there a similar service at a lower cost you could use instead? For example, a complex website that comes at a high price might serve your business the same purpose as a simple web design. While this doesn’t mean cut costs for every service you use, it will make you more prepared down the road when it comes to essential or emergency purchases.
An easy way to stay on top of expenses and stay in control before things get out of hand is to conduct a monthly review of what your office is spending. Having monthly check-ins will allow you to stay in the loop, even if you are not managing costs directly. When checking in, pay attention to the categories your business’s purchases fall under. You may be surprised to find you have ongoing expenses for services or products you no longer use. Another benefit of doing check-ins is that you can benchmark your monthly spending with the industry average and see how your costs compare.
Hunt for deals
Often, suppliers offer seasonal or periodic discounts and volume discounts. These are not always advertised, though, so make sure always to ask vendors for their current discounts. Consider annual subscriptions for services you know you use long-term. Usually, you will get a better deal with annual subscriptions rather than weekly or monthly subscriptions. However, make sure these are services you know you will actually use. If you spend money on things simply because there is a discount, you might not end up saving money. If you don’t end up using a product you have an annual subscription for, it will end up hurting you.
Paying for professional financial advice is usually an investment. First, decide what kind of advisor you need depending on where you need the most financial help. If cost management is not already part of your business strategy, have a professional help you implement it. A few hours with a tax advisor or a financial consultant every quarter will help you address particularly complex issues, cut your tax bill and boost your confidence when it comes to making serious financial decisions. While these might seem like expensive payments, the money you will save as a result could make a big difference in saving money.
You might be surprised how easy it is to make thriftiness part of your company culture without lowering morale. Keep it inclusive by using interactive methods of integration, like holding a seminar on the benefits of careful spending and implementing a corporate card program that can allow you to set spending limits. Make sure to balance the emphasis on thriftiness with positive feedback and low-cost rewards for employees, like the occasional day off or instituting casual-wear days. Creating a culture of careful spending will tie up any spending loose ends that you might not have much personal control over.
Managing a business takes patience, skill, and dedication. When your business is running successfully, it can be easy to focus on the big picture and pay less attention to the day-to-day spending. No matter the state of your business, acquiring healthy business spending habits will help you stay on top of expenses that you might have otherwise overlooked. You could be surprised at what a difference a few small spending habits make to your overall business success. Soon, you’ll notice yourself budgeting your expenses more accurately, saving you money and improving your overall financial status.