Finding and Fixing Money Leaks: A NYC Small Business's Guide
Running a small business means keeping track of so many numbers all at once. Sometimes it can seem like your business is doing well—but when you sit down to crunch the numbers, you might find that your profits aren’t matching your expectations. Despite your best efforts to plug all your spending gaps, there might be expenses that you are overlooking!
Money leaks are small, seemingly insignificant expenses that can add up and substantially impact your business’s bottom line. You may not realize this in the day-to-day running of your business—but by the time you sit down with your bookkeeper, you’re already several hundred dollars out. As such, it’s essential to take the time to find and fix these leaks to give you more breathing room, allow you to save money for further business growth, and stop any bad spending habits.
Here are four simple ways to find and fix money leaks in your business:
1. Be Vigilant About Financial Records
You need to be as thorough as possible in documenting all your expenses. Even a parking ticket for your trip to the stationery store is crucial in giving you a bird’s eye view of your money flow. If you don’t keep track of your spending, you will never find where your money leaks.
It’s best to keep physical and digital records of your expenses. Print out every invoice, file every receipt, and enter all the numbers on your bookkeeping file. Update everything daily, so you can spot any financial issues before they can get worse. If you need a helping hand, you can hire a Quickbooks expert to guide you.
2. Look Over Your Payment Plans
You likely have multiple running payment plans for your business, be it for rent, utilities, phone/internet plans, supplies, or online subscriptions. Take a long, close look at all your recurring transactions and determine if the expense gives you and your business a positive return of investment (ROI). First think small—and then think big. Project your yearly spending on these payments—are you getting the most out of this product/service? Will you be losing significantly if you downgrade your current plan to a more justifiable price?
It’s easy to let these expenses fall by the wayside because you’ve been thinking of them as a one-and-done deal. After all, you wouldn’t be paying for these services if you didn’t need them, right? But for practicality’s sake, you may have to shave off some of that spending.
3. Seek Out Competitive Bids
If you’ve been working with the same vendors and suppliers for several years, it may be time to re-bid or check out other providers. Markets change quickly, and you may not realize that there are high-quality contractors out there that can give you better prices or better business terms.
If you want to keep working with your current group, you can seek out some term improvements. Maybe they would be willing to offer free shipping with their supplies. Minor changes and simple negotiations like this can go a long way in helping you streamline your money flow.
Conclusion
If your business isn’t making as much profit as you think it should, you likely have one or more money leaks. Take a close, line-by-line look at your financial records and really take the time to think through all your spending. If you find that some expenses aren’t 100% necessary, it’s best to either downgrade those services or get rid of them completely. Once you’re down to just the essentials, you’ll never have to worry about your bottom line again!
Are you looking for bookkeeping services in New York to keep track of all your business spending? Totally Booked is here to help! We are QuickBooks Online Certified ProAdvisors, and our mission is to help you increase your bottom line. Get in touch with us today and see how we can help!