Titan (Tighten) Up Expenses
It’s a new year for the Tennessee Titans! As of January 11, 2020, the Titans are one step away from heading to the Super Bowl! This wild card play-off team recently shocked the Patriots with a post season victory and upset the former number one team in the NFL, the Baltimore Ravens, to make it to the final four. It’s an understatement to say the Titan’s tightened up their defense and offense to get them where they are today. No matter the outcome, the 2019-2020 Tennessee Titans can be proud of their hard work in the post season!
The post-holiday season is also a solid, often eye-opening reminder that it’s time to tighten up business and personal expenses. In fact, the 2019 holiday shopping season boasted record highs with an average expenditure of slightly over $1,000 per person on gifts, goodies, and travel. Now after the holiday splurging, its time to embrace the new year and refocus on the budget.
In order to remain competitive, small businesses must be budget conscious and that involves developing, maintaining, and continually evaluating the business’ financials. What are the financial needs of the business? Where will revenue come from? Are the projections for the business going to be met? Within existing budgets, it is never too early in the year to conduct an audit and tighten up unnecessary expenses or processes.
Documenting all financial requests is one step to strategic planning for better financial control. All companies, big or small, have expenses. All expenses, big or small, need to have supporting documentation such as receipts or written invoices for processing. Set spending limits for company cards and review billing to ensure compliance. With paper trails in place to track every dollar of every transaction, valuable information will be gathered for historical review and future planning. Having a formal process for expense reports, check requests, and purchase orders provides financial transparency into company spending.
Payroll is always the most significant expense for most businesses. Combining part time jobs into one full time position, turning one full time position into a job share for two employees, or outsourcing expensive tasks such as accounting and marketing all have the potential to reduce some payroll taxes and other expenses associated with having employees. Cross training employees to perform a variety of tasks can minimize invisible costs that come with longer production times due to lack of multitasking. Definitively, engaging current employees and maintaining a stable work environment are also pivotal contributors to effective cost cutting that comes from turnover.
Focusing on quality is never a bad idea. Quality builds relationships and relationships build businesses. Quality sells in the form of great products or services and satisfied customers increase sales through referrals. Referrals from solid business practices and ethics is the foundation to grow your business. Maintaining the core competencies of the business via concise product lines and a narrow business focus are also effective strategies to producing higher quality work. Higher quality, combined with a strong reputation, allows the business to charge higher prices equaling higher revenue which equals a WIN-WIN.
When every penny matters, the biggest impact on profitability comes from embracing smaller expenses and achieving bigger results!
By Susan Amsler
January 15, 2020
Randolph Business Resources, LLC.
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