Is Your Business Leaking Money?

Every business experiences the slow creep of rising expenses as time goes on. Sometimes this is because we add employees, increase production, or move to a different location. Additionally, service providers raise rates over time, and we end up paying more for goods or services than we originally signed up for. All of these are legitimate reasons for expenses to change. However, not all expenses SHOULD go up, and we need to keep watchful eyes on our monthly and annual expenses as we are the only ones who care if our costs go up. Your services providers won’t audit your charges and inform you if you are paying too much! HA! We wish!

So, I have accumulated a short list of sneaky expenses that business owners miss often. Most of these aren’t big expenses when you look at them one month at a time, but when you accumulate all of things, you might save thousands by cutting the waste!

1. Unused Software Subscriptions
This is the “Netflix syndrome” you may have heard about (or experienced yourself). You buy into a subscription, thinking you will use the new great tool, and then you never fully adopt it! All the while, your card is being charged $14 per month for MONTHS before you notice it. You might also sign up for a free trial (giving the company your credit card information) and then decide not to use the software. BAM – $25 gone per month until you realize that you forgot to cancel!

ACTION: Review your credit card bill/bank statements to see if you have any charges that aren’t familiar. Investigate and see if there are any software subscriptions you don’t need. Cancel immediately. Also, call the vendors if you think you may have been tricked into paying for something you never used. I have gotten refunds from businesses that don’t have transparent sign-up procedures.

2. Premium Software Subscriptions
OK, maybe you are using the software. That’s great, but are you paying for more than you need? Most software subscriptions let you opt-in for different service levels. Are you paying for the premium service, but only using standard features? If so, you could easily be wasting money every month on the premium subscription.

ACTION: Review the software that you DO use and look at the pricing plan options. Consider if you could downgrade your service without losing any of the features you use.

3. Internet and/or Phone Bill Add-ons
Internet and phone companies are NOTORIOUS for trying to nickel and dime consumers. Pricing packages will change without any notice or you could be charged fees for things you didn’t ever sign up for! These things sneak by consumers because it might just be $2 here and $5 there. But this type of bill-creep needs to be monitored and reported to the companies right away. If you are like me, you might forget what you originally signed up for, so try to track down your initial contract to assist in your comparison.

ACTION: Review your phone/internet bills to make sure you know what charges should be there. Then compare current month with prior month (run a Profit and Loss Statement for the month and compare to the prior period) on a regular basis to make sure your bill is staying steady.

4. Office Snacks and Food
Do you have a stocked kitchen in your office? If so, your office could be wasting hundreds of dollars on food that will go uneaten over the course of the year. Decide what kitchen items are necessary (clearly coffee is #1), and then forgo the rest. You won’t miss not having a stack of uneaten granola bars in your kitchen cabinets, and that $15 can stay in your bank account.

ACTION: Make a list of what your office really needs, and buy those things only. Set up a budgeted amount for office snacks, so no one goes overboard during the Costco run.

5. Unnecessary Office Supplies
Are you an office supply hoarder? Or are you a sucker for rose gold paperclips? If so, you are probably spending too much money on office supplies. It’s tempting sometimes to go out and buy office supplies we don’t need because it makes us feel “official” or organized. But I challenge you to scale down your shopping cart and only buy what you know you NEED to do business. Also, if you have a weakness for cute office supplies, just stay away from Target altogether 🙂

ACTION: Review your stash of office supplies and take inventory so you don’t repurchase items you already have. Keep a list of things you NEED and only buy when you have legitimate needs. (FYI – Rose gold paperclips are not a NEED. Sorry!)

6. Membership Sites
Have you joined any paid Facebook groups, clubs, or networking groups that are charging you a monthly membership fee? If you have, that’s totally fine! BUT, they should be a benefit to you. If they aren’t moving your business forward or helping you in some way, then cut them out.

ACTION: Write down any membership sites that you belong to and list out the benefits of each. If you find a group that has not produced any benefits for you, then cut it out. You can always join later if you realize you miss it!

Alright, I’d love to hear if you’ve found some money after going through this list! Leave me a comment here or post your savings on Facebook!

Remember, an Income Statement by month is likely the best report to view your expenses! Your accounting system should be able to pull a report like this easily.

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