Duplicate & Mixed Transactions
Here’s the good news: your high business expenses might not be accurate. If you use multiple payment accounts or rely on a personal bank account to run your business, there’s a strong chance you're dealing with duplicate or mixed transactions. Some expenses can be logged twice in your accounting software, while others may be personal expenses that don’t relate to your business.
The Solution: use account reconciliation software to double-check all of your expenses and weed out any duplicates. At the same time, make sure you only connect business accounts to your accounting software to prevent personal expenses from leaking in. If you only use personal accounts, then go through your expenses and categorise any personal expenses accordingly.
No Obvious Budget
You see this a lot with new businesses; they start up but don’t have an obvious budget in place. Maybe your venture began as a one-man operation, but it’s grown over time. Your demand for certain things has increased, which means you’re spending more money. The trouble is, you never created a budget, so you’ve essentially not got a spending limit to deal with. It means you are very likely to overspend without realising your mistake.
The Solution: create a proper budget for your business, and then divide it into mini budgets for different aspects of your company. This was one of our 10 tips to help you save money in your startup, and it’s so effective at curbing your spending. When you have a budget, you’ve got a clear ceiling in mind, and it affects all of your purchasing habits.
Unused Subscriptions
How many subscriptions are you paying for? We’re not talking about Netflix or Spotify; what business subscriptions do you pay for every month/year? You might discover that you’re still paying for software applications that you never use. This could happen because you simply forgot you bought them in the first place - though it may also occur if you took out a free trial and forgot to cancel it, so it rolled over into a paid subscription.
The Solution: Go through all of your subscriptions and cancel anything you don’t use. Then, look at what’s left and see if there are any overlaps. For example, you’re paying a monthly subscription for an email marketing tool, but you’ve also subscribed to a general digital marketing tool that includes email as one of its functions. Do you need the first subscription? No, so cancel it.
You may only see three things on this list, but they’re shockingly common. Kick things off by checking for any miscalculations and reconciling your accounts. If your expenses are still high, then it’s time to set a budget and delete all of your needless subscriptions.
