Make record keeping a priority
Maybe the number one way to make life easier on you and your accounting team is to get in the habit of keeping timely, detailed records. Of everything. This means that every bill, invoice, and receipt that passes through your company is tagged, logged, and preserved – in a timely manner. You should set aside time at the end of every week to make sure you are caught up and that all relevant records are categorized and complete.
Going digital can help. Gone are the days when businesses had to depend on physical paper files, stuffed away in some dusty room in a file cabinet. Not only are many transactions between businesses (and customer payments) online now, but the ones that aren’t can be easily scanned and uploaded into a digital record keeping platform.
A large part of the headache of managing business expenses has to do with poor record keeping. Don’t let this be you.
Keep your personal expenses as separate as possible
Sure, you may like the rewards on your business card. It may be the only one you have on you at the time your son needs a new baseball glove. I’ll sort it out later, you say. One of the biggest headaches you can easily avoid when it comes to managing expenses is to keep expenses separate – mainly your personal expenses and business-related expenses. Every business owner knows that there are some blurry lines there, but for the most part it’s pretty easy to decide the main purpose of an expense (and, of course, whether it will be eligible for a write-off come tax time).
Make a cost-cutting plan
If you want to have an easier time managing your expenses, you should do what you can to simplify and eliminate as many of them as you can. Every few weeks or so, sit down and figure out all the ways you can cut your expenses. Good businesses run lean.
There are a variety of ways to trim the fat, and there are no one-size-fits-all solutions. Some common (and costly) areas to look at, however, include: travel expenses (making sure you are finding the cheapest flights for you and your employees – there are tons of industry events you might consider attending); fixed expenses you can make variable (rent vs. own, performance-based payments, etc.); energy (lights, printers, utilities cost); and excess paper (go digital).
Get some help
Are you, personally, trying to manage all of your business’ expenses? Are you feeling a bit overwhelmed? It’s not admitting defeat to seek out a bit of help. Whether it be a financial planner, more help for your accounting team, or a business strategist, you’re never in a position (whether too flush or too bogged) where some professional help will hurt.
Don’t feel bad if you just aren’t a “numbers guy or gal.” You can care deeply about your business but have trouble focusing when it comes to managing your various business expenses. If you take some proactive steps, however, to make your record keeping better, cut some unnecessary costs, and keep your personal expenses personal, you can make dealing with the numbers a lot less painful.
EDITOR’S NOTE: This article was written by Jim McKinley. McKinley is a retired banker. He created MoneywithJim to share his advice and other resources on a variety of financial topics. He uses his knowledge as a retired banker to help people make sound financial decisions.
