An expense analysis is the process of strategically reviewing your business expenses and taking the time to audit and review each of them. It’s important to perform a proper expense analysis at least quarterly in order to ensure all your expenses are correct and up-to-date.
Think this is something you can skip or get away with performing annually?
Think again.
Let me share five stories of how an expenses analysis saved a business money or cleaned up the business books so that everything was running smoothly. But first, let me share some backstory.
In my top two most popular packages, I include a quarterly expense analysis. My clients fill out their incurring expenses and I also download all of their expenses from whatever software they’re using. Why do the same task twice? After we collect the data, I go through every single expense and verify what it’s for, the cost, and why. You might be shocked at how many times we find an expense that is redundant and unnecessary with the business owner having no idea.
Finally, this process helps define your business’s critical expenses. These are expenses that are essential for your business and how much should be set aside to cover these if your business experiences a slow month. Planning for this saves you from massive headaches if you run into this.
Fives Times an Expense Analysis Saved a Small Business Owner Money
These are just five of many stories of how performing an expense analysis saves money and headaches for a business.
1. In order to reach her goals, a business owner was hoping to change 3rd party marketing services to a different provider without higher expenses. We went through her expense analysis and evaluated which expenses had to be reduced or removed to make the switch without adding to her cost of business.
2. Recently, a client didn’t realize she had been paying for a free trial that had expired! This happens a lot more than you might think. Going through an expense analysis on a regular basis will catch anything like this and remove it from your cost of business.
3. Have you ever canceled a service or software and thought that was the end? Unfortunately, while reviewing a client’s expenses, I found that even though he had canceled the service, he was still being charged and had no idea.
4. Duplicate charges are frustrating! One of my new clients was inadvertently paying twice for the same software. We caught this duplicate expense during the expense analysis. One charge was through the actual software platform and once through a 3rd party app Apple.
5. Finally, an expense analysis can clean your books to catch any misclassified expenses so everything continues to run smoothly. Looking at a client’s accounting software, it showed they had blown the budget on business and legal services, but after reviewing we discovered that somehow payroll had been categorized incorrectly.
Find Your Business Financial Planning Partner
Your expense analysis is just the beginning of achieving a strategic and effective financial picture. By treating your business financial plan like the critical task that it is, you can achieve your biggest goals! You don’t have to add this to your already full plate. Find a business financial partner to help you achieve your full potential. Ready to chat? Book your free consultation call here.
