You’ve lost control of your spending and your expenses have run wild. It happens—even to the most conscientious budgeter, especially during periods of inflation when everything seems to cost more than the budget dictates. The important thing is not to wait too long to take corrective measures, or else you’ll find yourself in a costly financial crisis that you won’t be able to pull yourself out of without outside professional (expensive) assistance. If your spending has gotten a bit out of hand and you need some quick fixes to rein it in, try a few simple steps before bad goes to worse.
You may be paying more for some things than you have to. If you are finding yourself exceeding your budget month after month on supplies, inventory, and equipment, you: A) need a new budget, or B) need some new estimates. If you didn’t shop around before, now is the time. Check in with multiple companies to see if you can get the costs of any needed items—including office supplies—for less than you’re paying now. Negotiate new contracts, when feasible, and try to get discounts for early or upfront payments or for customer loyalty.
One of the biggest drains on accounts receivable is the time delay in collecting client payments. For any number of reasons, customers don’t pay promptly. Having a streamlined and standardized invoicing process whereby clients are billed quickly and followed-up upon consistently ensures the greatest likelihood of receiving the money you need to keep your cash flow going strong. If you have to, consider offering incentives to customers for quicker payments or payments in full if you find that cash flow is suffering from long-outstanding invoices.
More and more, companies are adopting dynamic pricing models to keep up with the ever-shifting supply of materials and inventory, as well as changing customer demand and the pressures of inflation. If your expenses have begun to exceed your revenue, it may be time to reassess your own pricing model to make sure your products are priced optimally.
Commercial leases are at a premium in some areas experiencing high growth, and you may be paying for more than you need. If your space is large or goes unused for stretches of time each week or month, you may be able to find something less expensive that still suits your needs.
One mistake solopreneurships and freelance businesses often make is not setting enough money aside for taxes. If you’ve been overspending, you will likely find yourself falling short when a tax payment is due. Now is the time to add to the budget a cushion so that tax time is not as stressful.
Expense tracking is generally the job of your bookkeeper. Don’t have one? That might be the problem. If managing the finances is a job that has gotten too big, too complex, or too time-consuming, it may be time to turn to a professional who is equipped with the tools needed to help small businesses stay on track. Your bookkeeper can sort out the books and help you create a workable budget going forward. She or he can also help locate wasted money and spot the unnecessary expenses that can be eliminated.
Cloud-based tools are widely available to assist with important financial management tasks, like uploading and storing receipts, categorizing expenses, and keeping track of bills and reimbursement payments. Online check printing through Checkeeper has been used by thousands of businesses to help streamline and automate the payment-issuing process. It can be accessed by a virtual bookkeeper that you authorize, and it integrates with the most widely-used online accounting and payroll software available.
While not feasible for every business, remote work has come a long way in reducing overhead costs for employers as well as turnover among employees. When and where possible, assess the possibilities of having employees work from home—even part of the time—to reduce office and utilities expenses while also allowing for smaller space leasing. Remote employees save money, too, in reduced commuting costs and reduced spending on meals and work attire. Online tools help keep everyone connected no matter where they happen to working; online check printing can keep your virtual bookkeeper connected to your business accounts so that smooth financial management is never interrupted.