Learn How to Identify Unnecessary Expenses and to Create Better Budgeting Practices
As a business owner, regardless of the size of your company, you may tend to focus more on keeping up with the latest trends in your field instead of ensuring your fiscal health is in good shape. Just because a competitor is using new platforms for marketing, or throwing lavish parties for your parties will keep moral high, doesn’t mean you should do the same.
Being smart about running your business is the best way to ensure long-term success, and Moody Bank can help you along the way. Since 1907 they have been the oldest financial institute in Texas serving customers in the Austin, Galveston, and Houston areas. With deep roots in the community, Moody Bank understand the challenges and needs of business owners.
Schedule time with your team to review these steps and recommendations to help reduce wasteful spending, become financially lean, and see how the products and services Moody Bank offers can keep you in business running for years to come.
Know Where Your Money is Going
While you might have a budget already in place, are you actually spending against it and do you know every expenses? Chances are probably not. Take the time to look at the last quarter of your business expenses to understand where your money is going. You might be surprised where you are overspending or down-right just being wasteful.
While this isn’t a definitive list of common wasteful spending by businesses, it is a good framework to use when reviewing your finances.
Office Supplies and Employee Expenses
Are you overspending on repetitive supplies like paper and pens, snacks for employees, or other items? Ask yourself how important these items are and if bulk purchasing may be a better solution. Similarly, are you spending too much on office parties or dinners, and do you have a reimbursement policy with limits set? Not every occasion requires an expensive celebration, nor should you let employees submit extraneous expense reports. Find ways to keep your employees happy without breaking the bank.
Leasing a Big Building
Nice office space is a great thing to have, but is it meeting your actual operating needs? If you have wasted space in your office, or many of your employees work remotely, consider a more efficient building to reduce overhead costs.
Outdated Software and Unautomated Tasks
Technology is evolving at a rapid pace for businesses of all sizes, and change can be scary but also costly. Take a hard look at what platforms you are currently using and subscription costs to ensure they are efficient and cost effective. This includes folding in manual tasks like budget reconciliation, expense report processing, and even financial reporting. There are many companies that offer comprehensive business tools that could help with cutting overhead expenses.
Credit Card and Vendor Fees
Even if you pay your monthly business credit cards on time, are you getting the best rates? Same with your vendors; are you really getting the best rates? Review how much you spend on all your vendors and see if you can bundle services to a single vendor or negotiate the cost of repeat orders. As for credit card interest rates, Moody Bank offer business credit cards with competitive rates that can help you save on interest.
Inefficient Marketing Strategies
This may come as a surprise, but you don’t always have to market to the world using the latest trending platforms. Many businesses think more on the tactical level when it comes to marketing and throw a ‘viral video’ or other trends at the wall, rather than taking the time to create a comprehensive strategy that identifies target audiences and demographics.
SCORE (Service Corps of Retired Executives), is a non-profit organization that has been providing small businesses resources and mentoring for free for more than 60 years. They have a wealth of free marketing templates that can help you focus your efforts and budget to target your customer base better.
Make Sure You Have a Good Accountant
You still need to make sure you put the work into setting and managing your budgets, but having the right accountant can make a world of difference. They can be a partner as you review wasteful spending and can offer professional guidance on how to maximize budgets and maintain healthy operational costs.
In addition, they can handle filing year-end taxes and find deductions and tax benefits you may miss when filing on your own. It is one investment that will pay dividends in the long run.
Check-up on Your Health Insurance
All business owners want to ensure their employees stay healthy, but that doesn't mean you need to spend a fortune. Annually you should review your health insurance policy, especially if you added new employees, to look for any potential savings. SCORE has a great article that outlines tips for picking the right insurance plan for your employees.
Another easy way to save is to start a wellness program. It can keep your employees healthy and avoid trips to the doctor. Many times, insurance will offer discounts when these programs are implemented. Another way to help reduce costs on claims is to make sure employees take sick days rather than tough it out and come to the office.
Become More Efficient
After you and your team have reviewed budgets and identified wasteful spending, it’s time to become more efficient with your money. Instead of tackling everything all at once, put those expenses into some categories to help focus your efforts.
Consider these categories:
- High-greatest impact on profitability and operational budgets
- Medium-needs additional discussion and negotiation with vendors
- Low-minimum impact on overall business
Additionally, you should set time each quarter to review budgets and conduct regular analysis to identify any additional wasteful expenses. The only way to ensure you are staying on budget, operating at maximum capacity, and protecting your financial health is to constantly review and adjust.
Make Moody Bank Your Business Partner for All Your Financial Needs
We’ve covered a wide range of topics for eliminating wasteful spending, including streamlining vendors and consolidating efforts. Moody Bank offers a full suite of products and services, making them a valued partner for your business across the Austin, Galveston, and Houston areas.
Business Checking: from small deposits to large Treasury Funds, we have the right product to meet your budget.
Business Savings: keep your money safe and watch it grow with interest earned on all savings accounts.
Treasury Products: we can handle your merchant services, automate accounting tasks, help protect against fraud, and much more.
Borrowing: need a line of credit, want to purchase new office space, or upgrade equipment with a loan? We have all the borrowing options your business needs.
Wealth Management and Trust: let us show you how to grow your wealth and protect your assets.
Contact us today or stop by one of our local branches to speak with a business banking professional. Moody Bank-small enough to know you, big enough to serve you.