Buisness Owners Must Monitor Expenses.

It is surprising how many businesses
owners do not monitor the expenses incurred by their business and
ensure they are getting best value for money when purchasing products
and services. Many business owners are too busy working in their
business and carrying out the day to day operations of what their
business entails that they don’t take the time to work on their
business.




As time goes by your suppliers increase
costs gradually and unless you analyse these incremental increases it
is very easy to not realise that they have become expensive. I am not
suggesting you should simply buy cheaper goods or services I’m
encouraging you to analyse the expenses and see where the true value
lies for you and your business. We all know cheap is not always best
but likewise you don’t always get what you pay for in life.

If you keep up to date bookkeeping
records and run regular management profit and loss accounts and
balance sheets this will help you track increasing costs and identify
them at an early stage. Many business owners wait until the year end
till they get their accounts from the accountant, this is flawed
logic because not only could you have been incurring these higher
costs for well in excess of a year but also you may not realise from
year end accounts that individual costs have risen. For example you
may have suffered a large increase in business insurance yet a
decrease in motor insurance, so if you simply look at the insurance
figures compared to last year the total may be very similar, as the
total of the two hasn’t increased but if you were to analyse this in
closer detail as you process your invoices you would notice the
difference and identify a possible cost saving.

Many people in business focus on
increasing sales every time that they want to increase profits,
however reducing costs can be equally effective, if not more
effective at times.

Also consider what expenses you can
eliminate altogether, for instance you might engage the services of a
bookkeeper, however with bookkeeping training you might find that you
can do this work yourself, or you might give your accountant a bag of
invoices at the year end, can you imagine the savings if you gave
your accountant a well-compiled set of bookkeeping records that you
were able to produce yourself if only you had some basic bookkeeping
training.

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