Joining a spin class, learning Cantonese, weaning yourself off energy drinks: New Year’s resolutions are a great way to give yourself a boost as the calendar turns over. And for this new year, why not try making one simple resolution for your business as well: To save more money.
Here are eight of the easiest, most efficient ways to stack up business savings next year. So, 365 days from now, your goals will be met—and you’ll have more cash in the bank.
1. Take advantage of business deductions
Tracking all of your deductible expenses—even the small ones—adds up. Remember, every deduction you claim has the potential to lower your tax obligations.
Some common small business tax deductions you may be overlooking:
- Business meals. Even a couple lattés with a client can be deducted.
- Education. Subscribe to a trade magazine? That’s deductible as education.
- Your internet bill. If you work from home, you can deduct some or all of the cost of internet access.
- Banking fees. Even small transaction fees can be written off, so long as they’re for your business account.
- Parking. If you pay for parking while you’re out an about on business, keep the ticket. You can deduct it.
One surefire way to make sure you don’t miss out on deductions is to put a good bookkeeping system in place. When you have solid books, you’ve got thorough records of every business transaction. That makes it easier to track even small expenses, and add them up at the end of the year.
Another big help is expense tracking software. Expensify is the go-to mobile solution—you can photograph and file away receipts on the fly.
2. Do a cash flow audit
Don’t let the word “audit” scare you. Auditing your cash flow means going back and seeing how money flowed in and out of your business during the year. Keeping on top of cash flow is one of the best ways to make sure you have money on hand to cover monthly expenses and meet savings goals.
When you audit your cash flow, you can often uncover overlooked expenses that put a drain on your business. Chase down that $14.99 charged on your business card every month, and you may find a software subscription you never use. Take a deep dive into utility costs, and find new ways to cut back.
You’ll need cash flow statements for the past year to do your audit. Three ways to get them:
- Accounting software. Your accounting software may be able to go back and retroactively generate cash flow statements from your bookkeeping records.
- A bookkeeper. If your bookkeeper isn’t already generating monthly cash flow statements for you, they may be able to create some retroactively from your records—and deliver them every month moving forward.
Bench. You can track your cash flow in real time and view your monthly reports with Bench.
3. Spend credit, get points
So long as you’re disciplined and make sure to pay down your bill every month, your business credit card can help you save money.
When you get cashback or rewards on business-related expenses, it makes sense to use your credit card as often as possible. Try to find a card that suits your spending habits and needs. For instance, if you often travel for work, a card that rewards you hotel and airline points can help reduce your travel costs.
You may only earn back a couple percentage points on your purchases every month, but it adds up. Don’t have a card that offers rewards? Shop around for the best business credit card.
4. Automate and outsource admin
If you’re spending time, you’re spending money. Hours you pour into back office tasks could be spent attracting new customers, improving your product, or testing out new marketing.
There’s a wealth of online services that can help take admin tasks off your hands for good. And in most cases, they cost a fraction of the price of hiring a freelancer or firm to do it for you.
Some of the best ways to automate your business admin:
- Gusto, for payroll, timekeeping, and HR
- Bench, for bookkeeping
- TaxJar, for tracking sales tax
- Sanebox, for email sorting
- GetResponse, for email marketing
- Tawk, for customer support
- Veeqo, for inventory, shipping, and tracking
5. Buy in bulk the smart way
Bulk buying cuts down the per-item cost of products—making it especially useful for items you’re always restocking. Office cleaning supplies, employee snacks, company swag: The bigger the order, the more you save per item.
But, if you buy in bulk, take some time to review your recurring orders. Bulk buying may not be saving you as much as you think.
For instance, if half the coffee cream you stock in the office fridge expires before anyone gets around to using it, you may want to switch to smaller purchases. Or if you’re buying bales of company shirts, only to have a significant portion gather dust in the storage closet, you may want to switch to smaller, made-to-order batches during conference season.
Also, review how each bulk purchase is being used. Your employees may appreciate a well-stocked snack cabinet, but when they start using it as a meal replacement, it’s time to ask where that monthly Costco bill is going.
6. Go remote
Remote work is more than a trend. More and more, employers are letting their employees work from home part time, daily, or as their needs dictate.
Employees appreciate the flexibility, comfort (sweatpants: the new business casual), and commute-free days that come with working from home. And employers reduce costs by shrinking their offices.
A smaller office means lower rent and utility bills, lower insurance premiums, and less office equipment. While there are expenses associated with running a remote office—teleconferencing and messaging software, for instance—they’re peanuts compared to the cost of keeping an office running.
Feeling inspired? Check out Gusto’s guide to managing remote teams.
7. Cut out customers who aren’t worth it
Frankly, some customers just aren’t worth the trouble.
For instance, maybe they…
- …have grandfathered in—they’re old customers or clients you got when you were charging lower rates. Now, they’re paying less than the rest of your customer base for the same services.
- …are always late paying invoices, and they’re tying up your cash flow as well as preventing you from taking on better clients.
- …are retail stores you supply with your product, but they move so few units that it isn’t even worth your time to make sales calls.
If any of those scenarios sound familiar, it could be time to review your customer list—and get ready to make some cuts. Provided they won’t be too difficult to replace, sometimes the best way to get more money is to get rid of customers who cost you too much.
8. Happy employees = money saved
On average, it costs $4,000 – $7,000 to hire an hourly wage worker, and $40,000 to replace a mid-level, salaried employee. Recruiting team members costs money—so retaining them helps you save.
Yes, these benefits cost your business money. But consider it an investment. Not only will you save on the cost of backfilling positions, but you’ll have the chance to build a long-term, dedicated team—one that can help your business grow and succeed.
Looking for more ways to save your money in the new year? Maybe it’s time for an end of year financial detox.