Save Money in Business

Saving Money in Your Business

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One thing people are always looking for is to save money. However, following on from a recent networking event the attendees realised that we may not always be as open to saving money as we think. We discussed savings in gas and electric at home, but it got me thinking about ways we can save money in business as well.

So here are my top ways you can save money in your business.

Regularly check contracts

You would be amazed how many people forget their contract end dates. Usually at the end of a contract where you received a really cheap deal at the beginning, the rates will triple in price. If you do not keep track of those contracts due to end you may get stumped with an unexpected payment taken from your account. Such services are hosting packages. Many companies offer an introductory rate for the first 12 months, but on renewal it will go sky high.

Keep a note of these renewal dates and about 2 weeks before they are due start looking around for better deals elsewhere. The same for mobile phone contracts. I saved £20 per month by shopping around for a better deal.

Consider Paying ‘Get Out Fees’ to make long term savings

My mobile phone contract was due to renew in April, at a monthly cost of £53 per month but I had been offered a far better deal by a different provider saving me £20 a month. So, I paid the get out early fees (£40) and saved myself £200 long term that I can look at investing in my business.

Many services from internet and landlines, to service providers such as those of point of sale devices, will have a get out early fee arrangement. It is worth getting someone to look over all your bills for you and see what savings can be made compared to staying with your current provider.

Do You Really Need it?

Another great money saving trick is to check if you actually need a service, or a different level of plan with your current providers. Take for example Dropbox, I was paying monthly for 1TB and yet had less than 1gb of files stored in it, files which I had not touched in around 6 months. At the same time I was paying monthly for my Office 365 business account, which comes with 1TB of One Drive. I removed all business files from my drop box, added them to the One Drive and cancelled the plan. Saving around £90 a year.

Similarly with Hootsuite, I had their premium version which I got at a discount several years ago, yet I had not used it in 18 months! So I cancelled my plan, disconnected the platforms I no longer use and saved my self around £150 a year.

So how could you save money in your business?

Business Finances, Finances, RedRite, LEeds

A Company’s Finance Obligations

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One major aspect that all businesses should have, no matter how big or small, is a system to track their finances. If you offer a service rather than sell a product it is still worthwhile to track all the finances associated: Income wage, marketing expenses, and any transport costs associated. It gives the opportunity to really see how financially better off you are working for yourself rather than being the employee in a company. The simplest format is through an excel spreadsheet, a handful of columns to list what is coming in and going out, a basic sum to work out the difference and you can quickly see what you are pocketing each week.

There are many free resources online to help you determine how to categorise your expenses and incomes, these balance sheets also help you fill in your self-assessment forms at the end of the financial year. Keeping track of all your finances allows you to see if there is any outstanding payments due or a better deal on something you purchase for the business. If you need a little more than that then its best to do your research first before paying out an overly large amount of money for something you may only use half the features of. Accountants can also help but be careful of an extra charges you may face for simple things like sorting receipts and invoices out. The HMRC provide many links to Payroll systems that are synced so you never have to worry about staying on top of the current rates and tax levels when dealing with employee wages. HMRC require you to keep track of the following for limited companies, it is good practise however to keep track of these even if you’re self-employed:

  • All money received and spent by the company
  • Details of assets owned by the company
  • Debts the company owes or is owed
  • Stock the company owns at the end of the financial year
  • The stock takings you used to work out the stock figure
  • All goods bought and sold.
  • Who you bought and sold them to and from (unless you run a retail business)
  • Spent by the company, eg receipts, petty cash books, orders and delivery notes
  • Any financial paperwork received by the company, eg invoices, contracts, sales books and till rolls.
  • Any other relevant documents, eg bank statements and correspondence.

They also require them to be kept for 6 years up from the end of the last company financial year they relate to unless the documents cover more than one accounting period or is a debt owed for more than 6 years. You can be fined up to £3000 if you do not keep accounting records. If you do not have time to organise through your finances, categorise your receipts and chasing up invoices yet cannot afford a full time accounts team then get in touch today. RedRite can help organise your finance tracking so you don’t have to and your accountant doesn’t charge you above and beyond your current arrangement.