Are Hidden Expenses Killing Your Business?
Whether you have an accountant/bookkeeper or you complete your bookkeeping yourself, there are times when expenses are unaccounted for. Sometimes these are hidden expenses that are either forgotten or not considered.
If you are leaking money because of hidden expenses, you need to find them as fast as possible. Here is a look at some of the sources of these expenditures.
Website Domain/Plan
Website domains and plans can cost a lot of money. Even the cheaper options add up. This is especially true if you aren't counting them as an expense or are forgetting to add the taxes or the paid advertising. There may be several expenses involved with the maintenance of a website and your domain that somehow become lost in the paperwork.
Postage
Do you ship your items? Send them by bus or courier? Have you kept all of your receipts in one place? If you have paid for these services online, keeping track of the expenses may be easier. However, anything paid in cash can be harder to track. Consider looking through all of the shipments you have made to find any missing receipts or payments.
Packaging
It is easy to lose track of the packaging you are using, especially if you are managing a home business. Check your email and business purchasing accounts with other companies you purchase from. Look for receipts from local stores that you might have bought envelopes, bubble wrap, or other supplies from. Each of these, even if only a few dollars at a time, adds up.
Taxes
When you are pricing your products, and you are calculating your profits, are you including taxes you have to pay on supplies you use? For example, you make body products and it costs you $20 to make a batch of lotion. Did you include taxes paid on the supplies when calculating your cost? Did you add in the tax on the shipping cost?
Insurance/Legal Advisors
Business insurance, legal advisors, financial advisors, and otherwise, all have their costs. Are you aware of just how much you are paying for them? Is each payment included in your expenses? Double-check all of the papers to make sure all of them are present and accounted for.
Bank Charges/Interest
Bank fees and interest charges can be quite high. When you are doing up your expenses, are you looking at your monthly statements to find these fees? They may add up to hundreds of dollars per year or more. These are fees that can be changed by switching accounts, banks, and so on. If the fees are high, you may want to consider making some changes.
Travel Expenses
Travel expenses might be difficult to calculate but it is important to keep track as much as possible. Driving on a regular basis costs a lot of money in terms of fuel. However, there may be forgotten meal expenses or otherwise. Be sure to track all of your expenses, keep a log whenever possible. This will help you determine your exact costs related to travel and perhaps how they can be reduced if necessary.
Maintaining Your Books
It is typically recommended that you update your books on a daily, weekly, and monthly basis. The timing depends on the type of expenses. Doing this can help you find your hidden expenses and manage the costs. When you know where the money is going, it may be possible to reduce the expenditures and get your venture back on track.
