There are so many apps for expense control these days. These apps are great for both personal and business uses. As an entrepreneur, you need to set up mechanisms for managing your finances. Most entrepreneurs are not even aware of the exact items that drain their business finances.
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It is usually not the big expenses that eat up finances, it’s the small ones, like business lunch with clients, data and airtime costs, and travel costs. 5,000 Naira spent here and there, every other day would amount to 60,000 Naira at the end of the month, and close to a million naira by year-end. Small costs added together over time can make a huge impact on your business.
Budgeting
The best way to control your business expenses is to create a budget. Budgeting is simply the process of establishing a plan for expenditure. You can create short-term and long-term budgets. Long-term budgets are usually prepared for a financial year and longer, and it’s useful for preparing financial reports. Whereas short-term budgets are prepared on a weekly, monthly, and quarterly basis. They are useful for monitoring and controlling business expenses.
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The management guru, Peter Drucker, once said, “What is not measured cannot be improved”. This statement is true today as it was when it was said. As an entrepreneur, you should keep track of the money spent by your business. This is crucial for understanding what items on your expense list may be unnecessary.
Tracking business expenses is key. But, attempting to reduce or eliminate unnecessary expenses is more important, and will save you lots of money in the long run.
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Business Expenses That You Can Reduce Or Eliminate To Save Money
Printing And Photocopy
Printing and photocopy costs add up quickly. Printer, photocopier, toner, paper, and ink maintenance is expensive and frankly, unnecessary. Opt to scan and save your documents online or to the cloud rather than photocopy them. Use online signatures rather than printing out and signing documents.
In fact, you will be better off discarding your printer and paying to print when you absolutely need to do so. This will ensure that your staff is using a printer/photocopier only when necessary. Also, it will save you a lot of money in maintenance and replacement costs. By using less paper, you are also protecting the environment. Overall, you are doing good by going paperless.
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Travel Costs
One of the major things that the COVID-19 pandemic has taught us is that we don’t need to travel to attend meetings and conferences. The virtual business landscape has come to stay and we should embrace it. It is even more advantageous to have virtual meetings because you get to save travel time and money.
For your learning and development goals, you can use online courses and other virtual learning environments. Well, don’t rule out traveling entirely, because some leads are best closed during one-on-one conversations. However, use the budget only when necessary.
Vendor Management
Outsourcing some business functions to third-party service providers is a good idea. However, you will do well to always compare quotation rates of companies for the same services. You may find that you have been paying more money to a company for the services that they offer.
Also, consider engaging your vendors to customise your business offerings to suit your specific business needs. This will ensure that you only pay for the features that you will use.
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Budgeting Tips To Help You Manage Your Finances
Keep Your Business Account Separate
Separating your personal expenses from your business expenses gives clarity about what the business brings in and takes out. It also helps in understanding if your business is a going concern. Also, you are able to create account statements when you separate these expenses.
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Keep All Your Receipts
Most entrepreneurs only account for the large expenses and overlook the small ones. Every business expense no matter how little should be recorded. You must keep the receipts, record them, and categorise them into months. This will help you reference them, whenever the need arises.
Get Rid Of Non-essential Expenses
It is important to identify expenses that are not essential to your business early on and eliminate them. You may want to review your TGIF budget, lunch, and travel expenses.
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Collaborate
Identify businesses that complement yours and collaborate with them. You can organise an Instagram live event, a webinar, or advertise on each other’s social media pages. This will give you the visibility that can draw customers to your business.
Seek Help
You can hire a professional accountant if you absolutely need one. You can also hire a consultant to review your statements from time-to-time. Do not overlook your friends and family who may also possess these skills. Ask them to assist as it will save you money.
Use Apps For Expense Control
Download apps that help you record, monitor, and track your business expenses. This will enable you to understand the expenses that you are incurring and the changes that need to be made.
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Apps For Expense Control
Apps for expense control vary in use and functionality. With some of the apps, you can scan receipts, record expenses, and prepare invoices. Some of the apps also have pricing plans, based on added features and collaborators for larger enterprises.
Here are a couple of free apps for expense control and their features, to enable you to see what suits your needs:
WaveApp
This is one of the most widely used business expense tracking apps. With the WaveApp, you can record your business expenses, prepare and send invoices, and also maintain and balance your account statement. It is quite intuitive and easy to use.
Zoho Expense
With Zoho expense, you can manage and monitor your business expenses by recording your transactions.
Fyle
With Fyle, you can easily create expense reports on the web and mobile. Employees can collaboratively track receipts and create expenses. Fyle also has a Gmail and Outlook plugin to directly report expenses from e-receipts.
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Finly.io
Finly.io is an intelligent expense management system that allows you to manage your business expenses. It is also useful in keeping your accounting system up-to-date.
Expensify
Expensify allows you to create expense reports from receipt scanning to reimbursement. The software is easy-to-use, with an intuitive interface. As a desktop application, you can easily access the platform on multiple devices.
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Receiptmate
Receiptmate is very beneficial to those that are using Evernote. This is because it has full integration with Evernote. Receiptmate helps in making e-budgeting easier by enabling scannable receipts.
Foreceipt
Foreceipt has an interesting feature that helps you to track your income, expense, and taxes from your smartphone and then stores the data in google drive. The software helps in managing your expenses by enabling you to turn your bills, invoices, receipts into data that can be used later.
As an entrepreneur, accounting may not be your favourite subject, but these tips will surely help you to manage your books and keep your business expenses low. It will also help you to prepare more accurate financial statements.
Did you learn something new that will be applied to your business? Let us know in the comment section.
