Controlling expenses is a key component of any well-run business. Knowing where your hard-earned pennies go helps you keep track of your resources and ensures you don’t waste any money.
This guide will show you how to control business expenses in the following ways:
- Create a clear budget
- Explore workspace options
- Review your supplier deals
- Leverage modern technology
- Market your business online
- Buy used equipment
- Deduce business expenses
- Optimise your inventory
- Set up a business current account
Whether you’re a sole trader or run a small business, Countingup can help you control and manage your business finances effectively.
Common business expenses for small companies
The most common expenses that small businesses have include:
- Software subscriptions
- Advertising and marketing
- Equipment and furniture
- Office supplies
- Fuel and mileage
How to control and reduce expenses in a business
Read on to explore our nine favourite tips to help you control and maybe even reduce these expenses.
1) Create a clear budget
Setting out a clear budget and sticking to it is crucial to make sure you have enough money to pay your expenses. Budgeting goes hand-in-hand with controlling business costs because you can’t make smart financial decisions if you don’t have a complete view of your cash flow.
Cash flow is the money flowing in (inflows) and out (outflows) of your business. Determine where and when money enters and leaves your company, and use that information to create a budget.
If you’ve just embarked on a new business venture, find out How to budget when starting a business here.
2) Review your supplier deals
Another way to control your expenses is to regularly review the deals you have with your suppliers. It’s easy to stick to your current arrangement, but you risk losing out on better opportunities.
Stay on top of current pricing trends and dig around to find the best deals on the goods or services you need. Knowing your options will help you to arrange better rates to control your company’s expenses. You can always use a different supplier if the one you have refuses to negotiate.
3) Leverage modern technology
Technology allows us to save money and advance our businesses in ways that just aren’t possible without it. Especially during the pandemic, technology like video conferencing and online payment services helped companies survive when face-to-face activities weren’t possible.
You can also leverage technology to manage your bookkeeping and other business finances. The Countingup app has an instant invoicing feature that allows you to manage your billing process quickly and cost-effectively.
4) Market your business online
Content marketing can be a cost-effective marketing method to use. It generates three times more leads for 62% of the cost of outbound marketing methods. For example, you can start a business blog where you publish informative, well-researched content to establish yourself as a thought leader in your field.
If writing isn’t your thing and you don’t have the means to hire a professional copywriter, use your social media platforms to reach your customers. We have a separate guide that tells you everything you need to know about why social media is important in business.
5) Buy used equipment
Buying new equipment for your business is something that can take up a lot of your budget. Especially if you purchase brand new retail-price items. You can reduce this expense by looking at previously owned equipment instead.
Whether you need a new company van, baking oven, or a computer, platforms like eBay, Gumtree, and Facebook Marketplace, could house great deals on used items in perfect working condition.
6) Deduct business expenses
Deducting eligible business expenses when you’re self-employed allows you to control your costs without having to reduce your expenditures. Our downloadable guide will tell you what you need to know about claiming business expenses.
You can make it easier to deduct business expenses by keeping adequate records of your spending. Use accounting software to keep track of your payments, or use a tracking app like MileIQ to record fuel and mileage.
7) Explore workspace options
The pandemic caused many business owners to realise they don’t need office space.
However, if you run a business that needs a physical space like a shop or a bakery, consider downsizing your retail location or switch to a cheaper utility company to cut down on your costs.
8) Optimise your inventory
Reexamining your inventory also helps you control your expenses because it allows you to determine if all your products or services perform well enough to be worth keeping. If a product or service isn’t selling, consider investing in more popular products.
Try selling an unpopular product at a discount to reduce the inventory and eventually eliminate it. Manufacturing and selling products or services come with high costs, so don’t waste money on ones that ultimately lose you money.
9) Set up a business current account
As a freelancer or small business owner, you may find your personal and business-related expenses get mixed together, which makes tax season a time-consuming admin headache.
Separating your personal and business finances helps you control your expenses and makes tax time much more manageable.
With a Countingup business current account, you get free built-in accounting software to make financial admin easier. We automate the tedious aspects of bookkeeping so that you can focus on running your business.
Control your expenses with Countingup
Download the Countingup app to apply for your business current account in minutes and receive your contactless Mastercard. Find out more here.