Top 7 Ways to Streamline Your Expenses As A Small Business

Small businesses have a lot of pressure when it comes to finances, with small financial mistakes here and there, potentially be life-threatening for the organization.

The efforts you make with your business expenses will influence how your company grows over time. The little changes and tips you take on board for your financial health will hopefully set you up for the long run.

From regularly reviewing and auditing expenses to establishing clear expense policies. Here are the top 7 ways to streamline your expenses as a small business this year.

1. Create and follow a detailed budget

First and foremost, look at what your budgeting system is in place, if there is one currently. Are you carefully assessing your income and outgoings as a company? Some small businesses are often still finding their feet, and as a result, might find that they’ve not really got any sort of budget currently in place.

Creating and following this detailed budget is definitely important and something you want to try and implement from the beginning. The earlier you put this process into practice, the easier it becomes to maintain and manage as you grow and expand the business.

Look at what your budgeting efforts look like now and take a look at what you could change or improve upon. Explore the tools and methodologies that are used when it comes to creating budgets, especially if you’re not used to doing them yourself for the business yet.

2. Manage your cash flow

Cash flow is definitely something to manage carefully because you may be one or two big financial mistakes away from going under.

Even bigger companies have to watch what they’re doing with their cash flow and how it’s managed. The reality for many businesses is that cash flow can pose problems due to the volatility that comes with having too many expenses and not enough income coming in at the right time.

There’s also the challenge of having invoices paid on time, which can also cause financial bottlenecks if you’re not careful. With that being said, it’s a good idea to put in place processes that ensure you’re getting paid on time for the work or services provided.

3. Implement an expense management system

An expense management system is good to put in place when it comes to managing expenses across the company. As the business grows, so too does the pressure of keeping up with all the expenses that are coming in for management and processing.

With an expense management system, those responsible for handling this financial task can do so with a lot more ease and help from software or a tool. These systems are often a lot more affordable than they used to be, with most being on a subscription model that’s less than the price of a coffee per month.

4. Automate processes and avoid human error

A lot of the time, mistakes are caused by human error. It’s only natural for it to happen, and it’s something that, while common, can disrupt the success of the business.

With that being said, you should be looking at what technology is readily available and provides automation and machine-learning features. Automating routine tasks that don’t require much in the way of observation or manual effort from humans is worth giving to computers instead.

From invoicing to payments, payroll, and bank reconciliation, there are lots of options available where automation can be helpful. With automation, it saves time, as well as reduces the risk of human errors that are made within financial operations in particular.

5. Regularly review and audit expenses

Regularly reviewing and auditing your expenses is a great way to make sure your expenses are being streamlined as a small business.

There are often issues with finances and expenses in general that can go unnoticed, which can lead to problems with the business if you don’t get on top of them quickly.

With that in mind, look at what’s being spent in the company already and explore audit opportunities that might help uncover what money could be saved or what may need to continue being spent. 

While you want to reduce your overheads and expenses in general, you don’t want to start removing expenses that then impact departments that rely on those budgets.

6. Establish a clear expenses policy

An expenses policy is good to have, especially when you’re growing a business and have more staff who are utilizing company credit cards and benefits on expenses to help with their job.

Create and communicate clear guidelines for all employee spending, making sure to cover what’s reimbursable. It’s useful to provide guides on how to submit expenses correctly and to notify your employees of any spending limits.

The more detailed you can be with an expenses policy, the better. Otherwise, you can end up making it too vague and causing confusion for employees. This t&e policy meaning is helpful to get to grips with creating these types of policies and to ensure they’re as clear-cut as possible.

7. Embrace cloud-based technology and tools

Talking of tools like the expense management system, there are plenty of cloud-based technologies and tools to make use of. Cloud-based document management systems help organize storage and provide quick access to files.

Becoming a paperless business can also help when it comes to greater efficiency and a reduction in the administrative work that’s needed. By having these strategies and tools in place, you’re able to get a better hold over your company's finances during what can often be the most crucial time in a company’s existence.

There are also a lot of tools nowadays that most modern businesses are using plenty of this software to make work management and business operations in general, a lot easier to control.

Streamlining your expenses as a small business is easily achievable with the right know-how and efficiency from the beginning. Make sure to use these tips to help keep your expenses streamlined as a business this year. The more proactive you are with expenses and finances in general, the more stable the business becomes.