Blog post 048 Ways to help you stay on budget

“Too much month at the end of the money” is a common comment both among regular wage-earning individuals and owners of businesses just like you. What’s also all too common is a sense of surprise when the money runs out.

Often, that surprise comes from not clamping down on basic business spending. It’s not the huge purchases that cause financial trouble for most companies: it’s the slow leaks and small wastages that add up over time.

Here are some ideas to consider:

Cheaper Credit Card Processing Service.  If you take credit cards, chances are you pay your processor too much. For example, PayPal is $30 per month and your funds are in your account and available within seconds after the purchase.

Cut Back on Insurance Expense.  Faced by tough economic times, the last thing you want to do is eliminate essential insurance coverage for fire, theft, and liability. But by increasing deductibles and canceling less essential coverage for things like business interruption or the death of a key employee, you may be able to reduce your overall payments.

Cut Business Travel.  Assuming your business still does a significant amount of travel, cut it at least in half. Just committing to this will force you to focus on eliminating the least profitable half.

Cut the Work Week.  For example, going to a four-and-a-half day work week saves 10% of payroll; a four-day week saves 20%. Similarly, putting a freeze on overtime hours will save you money.

Eliminate Discretionary Spending.  If you were planning on painting your building, buying new equipment, or hiring additional employees, wait. Only if a particular expense is essential to carrying out a crucial marketing or diversification plan should you go ahead.

Late Fees.  Whether they’re from loans, on credit cards or with your utility company, late fees add up fast and are 100 percent avoidable. Most business owners with a late fee problem have that problem because they just don’t know all of their payment due dates.

Not Tracking Expenses.  You have to come up with a total once a year for tax purposes, but otherwise nobody really knows where the money goes.  Fix this by establishing expense reporting and accounting for every department, which somebody reviews once a week.

Pay Vendors On Time.  Don't overlook basic expenditures, such as phone service, electricity, copying, janitorial services, and payments to independent contractors.  Some vendors give discounts for early pay.

Poor Time Management.  Budget your time as closely and effectively as you budget your money.

Reduce Professional Fees.  Paying an attorney $300 per hour is no way to save your business. Ask your lawyer to give you a discount and, if it's not forthcoming, shop around for someone who will.

Renegotiate Your Lease or Move.  Renegotiating an ongoing lease to get a lower rate is rarely easy, especially if your lease will be up for renewal soon.  Chances are  your landlord may give you a better deal.

Stop Paying for Equipment You Don't Need.  When times are good, it's easy to commit to buying or leasing expensive equipment.  Sell everything you don't need.

Sublet Unneeded Space.  If your business is losing money, your real estate may now be your most valuable asset—make sure it's producing every penny of income it can. You might even want to look at moving your business to another location and renting out your entire building.

Supply Waste.  Sometimes called “variable expenses,” this is all the stuff your team uses up over the course of a work week: pens, printer cartridges, toilet paper, paper cups, staples and the like. Each represents a tiny cash investment, but they can add up to serious wastage in a month, quarter or year.

Too Much Technology.  Sometimes management is too excitable, or the techies on your team are too persuasive.  There’s not much you can do about what you’ve already purchased. Just promise yourself right now to only buy what you need moving forward.