Expense Management

Three Ways to Avoid Overspending

By February 5, 2020 April 27th, 2020 No Comments
avoid overspending

All companies, but particularly small businesses and nonprofits, should have practical, tight controls over company spending, with the clear ability to spot issues as they happen, not after the fact. Here are three ways to avoid overspending so that you’re not leaking money where you shouldn’t:

Make smart supply decisions

It’s an obvious strategy to select a supplier based on their prices, but smart business owners build strong relationships with the suppliers they choose. Often times, if your suppliers like you, they may offer business discounts, or they may allow you to buy in bulk, which is often more cost-efficient than buying only what you’ll need each month. Accordingly, plan your inventory with the widest forecast possible (a quarterly, six-month, or nine-month event horizon) to increase your profit margins in the long run.

It’s also essential to track your inventory. An occasional inventory audit helps ensure that you aren’t buying too much and brings to light possible employee theft issues. If you find inventory tedious, or lack the staff to regularly check, automation and smart tools can help you track your supplies, save time, and boost efficiency. Also, a clean-out of supplies can be an employee benefit. It seems like every time we clean out our marketing closet, we find samples, really small quantities of trade show giveaways, and shirt in odd sizes. A little swag makes a workday a lot more fun.

Finally, even the best-intentioned business owners can fall prey to impulse buys and other unnecessary expenses. Before you throw that extra item in your Costco or Office Depot order, rationalizing “It’s for work,”—ask yourself, do I really need this, now? Will it reduce my costs and increase my profit? Or is it simply nice to have?

One of the easiest ways to avoid overspending is keeping your expenses limited to necessities, even though that can be hard.

Evaluate subscriptions and software

Impulse buys aren’t always tangible supplies: set aside time to conduct a line item audit to see which software, programs, tech (and hard copy!) subscriptions that come out of your budget. Did you splurge on an app, program or publication that promised to make your business better, but requires training you don’t have time for, or isn’t demonstrating any results? Cut it. It’s okay to return to prior models you’re familiar with if they work for you.

Sometimes a tech upgrade is non-negotiable: in that case, spend the time to seek out solutions that work with your existing tools and systems. A bargain CRM may actually cost you time (therefore, money) if it doesn’t integrate with your company’s calendars, email marketing system, and other software.

In our discussions with clients, we’ve learned that managing subscription costs is one of the most effective ways to avoid overspending.

 Choose a fuel card that won’t ding you

Traditional gas cards are credit cards, meaning that you are approved based on your credit. If your business is new or you have some credit issues, this can be problematic. Plus, traditional gas cards are typically branded, which means your drivers will only be able to get gas at specific stations. If these are out of the way, it adds mileage and fuel costs. On top of this, gas cards often carry high interest rates and charge substantial annual fees.

Bento fuel cards for small firms provide the flexibility your drivers need. They also have guardrails important to your budget. They also eliminate the time and hassle of reimbursement forms.

Bento for Business offers fuel cards that are business Visa debit cards. You don’t need to use your credit to use them. Your credit score will not be affected by your application, either. Your employees can buy fuel and pay for other vehicle-related expenses while they are on the road. You have the option to limit what your employees can spend on their cards. Diesel, yes: scratch-offs, no.

No matter how insignificant they may seem at first, areas of overspending hurt your profits. Do a careful audit of them now to ensure your profits stay where they belong—with your business.

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