Maintaining good business finances is a necessary part of running any company, but that doesn’t mean doing so is always easy. Many businesses fail to properly manage their money and in a short period of time have to permanently lock their doors. Instead of succumbing to this pitfall, ensure your company is not spending more than it should. You can use the below tips to improve your books and get back on track with your spending.
Track All Expenditures
In order to know where your company’s money is going, you need to track every cent that leaves the corporate account. While the past might have permanently faded, establish a system now that keeps tight track of all expenses. The only way to know what you need to cut back on is to understand where the money is going in the first place. Luckily, there are many different apps and software systems that can help automate this process for you.
Color Code Your List
Once you have a list of all the company expenses, get to work figuring out what you really need in the budget. Take out a few different colors to help organize this list. For example, you can assign green to necessary items, yellow to desired items, and red to wasteful spending. Once you are done assigning colors, you can begin to eliminate all of the reds and some of the yellows from your future spending. You should keep a record of these items in case your budget allows you to start purchasing them again in the future.
Care for the Environment
Chances are, you are using some products that are unfriendly to the environment. In addition to hurting the natural world, they are also probably stifling your financial goals. Take a look at the ways in which you can green up the office and save money on utilities. For example, you may spend an extreme amount of money each month on paper. Think about whether you can bring those activities onto the computer to reduce both the paper and the spending. Check out energy saving models of machines and hardware to make sure you are saving money where you can.
Return on Investment
Whether you made the plans months or years ago, you probably developed some ideas to bring in greater profits with a new project or marketing campaign. You want to make sure these plans have actually served their purpose. Take a look at each money-making technique you put into play in the past, then examine how much money it has brought in for your company. When you are not earning a high return on investment you know you need to take steps to reduce spending in that area or to improve the plan.
Speak to Professionals
Looking into your own financial situation is often difficult, and an outside perspective can help you to decide where you should revise. Consider scheduling an appointment with an accountant, financial adviser, business credentialing service, or risk management services to get your finances in order and to find ways you can better protect the business and future investments.
Trust Your Spenders
You probably don’t make all the purchases for the company yourself. In fact, you may have a team of people who control the spending and send out the approvals. Trusting this group is key. If you have had doubts about the integrity of these team members, put systems into place to see where they can look for better deals or save money. When you are just building a team or assembling a new group of people to take control of spending, ensure they succeed at numerous rounds of interviews and trials to make sure they are the right fit.
Spending money wisely is a step all businesses need to take. If you fail to do so, you can compromise the entire company, as well as the jobs of all people who work for you. Use the financial advice here to make better decisions as a whole.
Author: Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information on getting insurance or risk management services for your business check out options here or contact Brooke via Twitter @BrookeChaplan.