Managing your business’s finances can be one of the biggest challenges of being a small business owner. It can be difficult to manage your personal budget and spending, let alone trying to navigate your business accounts.

But it pays to be on top of your business finances. Not only will it ensure you don’t overspend and manage your cash flow well, but being a little more careful can help you reduce your overall expenditure, making for a better bottom line.

And while you think it might be tough to save money in the current climate, there are still ways you can make it happen. Discover all the ways you can be frugal with your small business finances, and start reaping the rewards.

Analyse your spending

Business costs can easily spiral, and when you’re busy managing other areas of your business, you can find that sometimes, you don’t even know where the money is going.

It’s important to get a clear picture of your spending to make better decisions about how your business is run. And to do that, you need to analyse your spending in detail. Use business finance apps to help you keep track, so you can see all of your outgoings. This should be something you do regularly to help you keep on top of your business spending.

See where you can make improvements

Now that you can see where your money is going each month, you can make some important decisions about your spending. Some things may be obvious, such as overspending on coffee or catering, while others may need a little more consideration to see if they warrant being cut.

The good news is there are lots of little ways you can cut your business spending, helping you save money in some unexpected places. 

Cut out unnecessary subscriptions

Subscriptions can make sense for different types of spending, especially for software applications and regular deliveries of goods. But after time, you could find that you don’t need these subscriptions as much as you did, and can find easy ways to make some big savings.

Choosing monthly subscriptions is a great way to save on your short-term business costs, helping you trial different services without making a long-term commitment. But if you find there are some services that you know you’re going to stick with for a long time, switching to annual subscriptions could help you save money overall.

Monitor expenses and employee spending

When you have a small team to manage, you need to make sure you keep on top of their spending too. If they incur expenses regularly, be sure to monitor these so you’re not inadvertently paying for any personal costs.

Online payment systems linked to company cards are a great way to keep track of all your business spending, especially if you have employees out on the road. See why small businesses choose Coast to help them manage business spending more easily. Remember to put expenses guidelines in place to ensure your employees know what the limits are, and to help them think twice about their spending habits - even if the company is paying for it!

Lower your energy use

Cutting your basic utilities can be another handy way of reducing your business spending. Energy costs are still high compared to what they used to be, so making some savings will help you reduce your overall business costs. You can even save money on your energy bills with AI to help you uncover smarter ways of reducing your energy use. 

Lowering your energy use is a good move for the business, but it’s also good for the environment. Boosting your sustainability efforts sends a great message to your customers, and shows that you’re a responsible business. Are there other waste-saving initiatives you can adopt within your workplace to help you save even more money and help the environment at the same time?

Review your suppliers

Developing relationships with suppliers is great for your business, and while it’s good to provide them with ongoing support, you need to make sure they’re supporting you in the same way. A regular review of your suppliers can help you work out if you’re really getting the best deal. If you’re not, and there are more affordable services out there, you might want to consider a switch.

You should also consider your carbon footprint when it comes to choosing suppliers. An overseas supplier may offer something at a lower rate than a local one, but are the additional shipping costs worth it? And if something were to happen, such as another global pandemic, would you receive your supplies as easily as you would from someone based on home soil? Weigh up the different possibilities as sometimes the cheapest option may be different overall.

Reassess your products and services

You’ll learn a lot of lessons in the early years of your business, and will soon get a sense of what products and services your customers want and need. It’s a good idea to review your products and services regularly, ensuring you’re meeting your customers’ needs, while also making sure you’re allocating resources in the right area.

Reassessing your products and services is also a good opportunity to look at your pricing structures. If your costs are creeping up, your profit margins will be dipping, so you may need to look at what can be done to find the balance. This may mean making some tough decisions that may disappoint some customers, which you’ll need to weigh up alongside the ongoing costs for your business.

Say goodbye to wasteful spending

Many businesses are guilty of wasteful spending, and while this is much more common in large businesses, it can also happen within startups an SMEs. So where are some of the most common areas of wasteful business spending?

• Cut down on business travel.

• Consider moving to a smaller office, or encouraging remote working.

• Shop around for business insurance, tech and utility providers.

• Reduce your event spending in line with the best ROI.

• Look at alternative types of advertising, including different social media channels. Assess the impact of your campaigns to work out which ones are the most profitable for you.

• Lower your catering costs, especially if you’re producing a lot of food waste.

• Make money from your recycling, while changing the way you handle waste. There are no excuses for not sorting your waste, even within a business setting.

• Cut back on promotional products, are they really necessary for your business?

Work with an accountant 

One of the best ways to manage your business finances more effectively is to work with an accountant. Accountants are great for keeping things in check, but they can also help you identify various areas for savings. This can help you uncover tax breaks and other incentives you may qualify for, and ease some of the pressure of managing your business’ finances yourself. Accountant costs may be off-putting as a small business owner, but the chances are, they’ll save you much more money than what they bill you each month.

Final thoughts...

Managing your business’s finances is one of the many responsibilities you’ll have as a business owner. It isn’t always the easiest, so it’s easy to see why things can get away from you. Taking charge of your finances now can help you avoid some significant problems in the future, while also ensuring your business spends more responsibly going forward. Take a frugal approach to your company’s spending to help you build a more secure and successful business.