Business Finance

Found Money! Cutting Business Costs The Easy Way

Sep 15, 2022 • 7 min read
found money cut business costs
Table of Contents

      Maybe you’re different, but I don’t use nearly as much cash anymore in my day to day. That means I’m missing out on one of the greatest joys a person can experience. You know what I’m talking about: that thrill you get when you reach into the pocket of a jacket you haven’t worn in a year to find a crumpled up $20, which you absentmindedly left as a gift to current you.

      Will our children even know what that’s like? What are they going to do, find a dusty thumbdrive in their jacket pocket with some old Dogecoin in it? Probably. And finding some digital money might be even better in the long run.

      Incidentally, there are ways to set yourself up right now to find some extra digital cash in your bookkeeping that might have gone unnoticed, or worse, given unnecessarily to the tax man. With the right accounting software, you can easily find all the treasure that’s already rightfully yours. That’s right: there’s still money to be found somewhere!

      Here’s how you can start your opportunity tracking to find money for your business — or at least save some dough.

      Finding Money Faster: Smart Invoicing

      According to Sage (via CPA Practice Advisor), late payments cost SMBs $3 trillion globally. Furthermore, 1 in 10 payments are either never paid or paid so late that they’re basically written off as bad debt. If any large enterprise lost 10% of their income, they would tear down capitalism; yet, small businesses are just eating the costs.

      A large part of these late payments can be alleviated with better invoicing. Long gone are the days of terrible invoicing etiquette that leads to late payments for businesses. Today’s modern small businesses should always take advantage of automated invoicing options.

      Setting up a recurring monthly or weekly invoice makes sure that they are never sent late, and establishes a payment pattern that helps your clients stay on schedule as well. Smart invoicing through the right software (we’re using the free software from Lendio for our examples; you can access it here) also allows your business to access faster payment methods like PayPal or credit cards to make the path to payment easier as well.

      Another way to make sure your business gets paid what it’s owed? Adding late fees to invoices is a pro move.

      Adding a 10% late fee to invoices not only incentivizes your clients to pay them on time, but also compensates your business for late payments. This too can be an automated process with smarter invoicing solutions. And if doing so can earn you back the lost 10% of income each year? That’s found money — and it’s coming your way.

      Cutting Business Expenses: Expense Tracking

      Another reason why businesses lose money is due to bad practices in expense tracking, and making sure that your business stays on top of your expenses is one of the best opportunities to find extra dough.

      There are a number of reasons why better expense tracking matters and can help you cut unnecessary business costs. First off, it can expose bad spending habits. Just recently, until I did an audit of my own expenses, I didn’t realize I had an old credit card open that had an annual fee being automatically paid, and it’s been leeching money off me for an embarrassingly long amount of time. Your business could have these types of leeches all over the place, and you wouldn’t really know it unless your expense tracking was up to snuff.

      Second, if your small business is tracking expenses incorrectly, then there is a high likelihood that you’re not getting the full amount of write-offs when tax time cometh, and not getting your full business deductions is ultimately a lazy way to lose cash that is rightfully yours (and that’s not even taking into account any penalties you might have to pay).

      And third, tracking expenses poorly throughout the year means that tax time will not only be a headache for you, but time consuming for both you and your accountant—and last I checked, accountants don’t come cheap around tax season.

      Instead, track expenses smarter with accounting software that can automatically categorize your expenses using a learning algorithm. This way, the AI does the heavy lifting for you, recognizing most common expenses (e.g., parking stubs, hotels, etc.) and automatically tagging and sorting them in your bookkeeping software.

      And speaking of taxes…

      Smart Tax Assistance

      Every small business owner knows how difficult it is to make sure their taxes are done correctly. Another way to save hundreds, if not thousands, on tax prep fees is to leverage automated tax assistance within your accounting software, provided your accounting software has this feature (Lendio’s does).

      This sort of step-by-step tax prep guide can help you efficiently manage your business taxes, saving you both on prep fees as well as finding you as many deductions as possible. And considering the hourly rate of a tax professional can be over $200, saving even 5 hours can put a thousand dollars back in your pocket. Just imagine all the Dogecoin those cut business costs could buy!

      Smart Time Management To Cut Costs

      Ultimately though, most small business owners know that time is often much more valuable than money, and if there’s an opportunity to track down more hours in the day, that is worth gold and maybe even a much deserved vacation. Or at least a nap—usually a nap, let’s be honest here.

      Outsourcing your bookkeeping will cost you between $500 and $2500 each month, which is the reason so many SMB owners simply do the balancing themselves. Yet “more than a quarter of small business owners spend over 100 hours per year on their federal taxes alone.” And 40% of owners say bookkeeping and taxes are the worst part of owning a small business. So any time-saving opportunity here is not only a windfall to your wallet, but to your mental health as well!

      Smart accounting software like Lendio’s turns hours of bookkeeping into minutes with smarter invoicing, expense tracking, reporting, and analysis. Get started with a free version of Lendio’s software and see just how much time it can save for your business.

      And once you’ve saved all that time and money, hit me up to discuss just how much Dogecoin you’d like to take off my hands, please.

      The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. Any content provided by our bloggers or authors are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything. The information provided in this post is not intended to constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.
      About the author
      Robert Woo

      Robert Woo is a freelance writer and marketer. He focuses on the tech and finance industry, has been a featured contributor of Lendio, and regularly shares his experience with software via blogs and articles. During any remaining free time, he's obsessing over fantasy football, writing for television, and playing guitar just enough to maintain the calluses on his fingers.

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