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Managing purchases and sales, cash flows, and keeping track of business expenses and expenditures is essential for running a small or medium-sized business. Most entrepreneurs tend to overlook the small expenses of their business while focusing on their daily transactions and profit-loss calculations. However, statistics show that neglecting small business expenses often leads to significant losses for small business owners, sometimes even forcing them to shut down their businesses. So, what should be done?
The answer is simple: you need to put a leash on your small business expenses! To keep track of all your business finances, you must become vigilant about accounting. Record the expenditure details to manage your business efficiently. By doing so, you can easily keep a check on your expenses and make necessary adjustments. As a result, you can reduce small business expenses to increase profits or control overall expenditure!
For a sustainable and profitable business, it's vital to leash the cost beast and steer it in the right direction! Best of luck on this challenging journey.
Starting with the foremost inquiry: Why should we manage business expenses?
Then, onto the second query: Who assumes responsibility for controlling these expenses?
Lastly, the exploration of how to oversee and regulate business expenses?
Step by step, we'll delve into each question. But initially, let's clarify the definition of business expenses or simply expenses.
What are business expenses or expenses?
When a business organization spends money to acquire a product or service, it qualifies as a business expense. This financial sacrifice, quantifiable in monetary terms, either occurred or will transpire in the future for an object or activity. Expenditure may span short-term or long-term durations and invariably pertains to items that deplete – hence excluded from income. (Source: Management Accounting, Bangladesh Open University)
While accounting linguistics delineate costs and expenses, pragmatically, the two terms are often used interchangeably. Essentiallybusiness expenses encompass the costs incurred in the operation of a business, contributing to revenue generation.For instance, marketing or sales expenses, advertising, procurement costs of goods, recurring bills like electricity and internet, rent for facilities, taxes, shipping fees, employee salaries, travel or communication costs, and branding expenses, among others.
Now that we have a clearer understanding of what business expenses entail, let's delve into addressing the initial query.
Want to put a leash on your small business expenses? ??
Understanding the significance of corralling business expenses is pivotal, yet you're not quite gripping the reins; rather, you are lassoing an hour around them! This metaphorical restraint allows you to monitor expense accounts and rein in spending where necessary. Essentially, it's about trying to maintain a handle on your business expenses. Why is controlling expenses essential for small businesses?
Every Penny Saved is a Penny Earned!
You've probably heard the adage—save a penny, earn a penny. This age-old wisdom holds true, especially for small or medium business owners.
As a small or medium-sized business owner, the expenses you incur in managing your business determine your profits. Therefore, you need to know how to increase profits by reducing small business expenses. If you can save some money from any expense category of your business, that money will add to your profit!
Imagine your fixed expense for car rentals from the wholesale market used to be 2,000 taka, set by your team. Now, by vigilantly overseeing this, you've slashed it by 200 taka—voila, an additional 200 taka bolstering your profit!
to minimize cost is on your control?
The reality of business is that it incurs costs, an undeniable truth. But the real question surfaces—are you steering these expenses? Often, in the hustle of business management, small expenses might escape your scrutiny while calculating sales, profit, loss, income, or marketing budgets. This oversight is the genesis of uncontrolled business expenses.
This lack of oversight eventually chips away at your business's profitability, weakening its foundation. If unchecked, this trend can lead to losses, jeopardizing your business's survival. To ensure longevity, it's vital to corral these unchecked costs.
Profitability vs. Sustainability
Profitability is important, no doubt, but it must align with sustainability. When business expenses soar or frivolous spending takes center stage, your competitors might be strategizing differently. They're adept at managing business costs, maintaining profitability.
A temporary profitable business doesn't guarantee longevity. Shockingly, a majority of new entrepreneurs in Bangladesh shut their businesses due to lack of expense tracking. Often, they are unaware of why their business folds.
Insight into Business Spending
Most small business owners might not have a firm grasp on their expenses. Even if they have a vague idea, tracking them regularly is a challenge—balancing multiple accounts while handling day-to-day business operations is no easy feat.
Here lies the critical question— are you invested enough? If the answer is affirmative, let's find out the next piece of this puzzle!
So Who will put a leash on your small business expense?
If your business matters to you, then you are the key to overseeing its expenses! This implies identifying, controlling, updating, and regularly tracking various areas of business expenses. The next inquiry arises—how do you accomplish this feat?
The solution lies in a robust accounting software designed to handle business expenses efficiently. You need a tool capable of recording all daily accounts, effectively managing your business expenses. ‘HishabPati’the dependable ally that fastens the reins around business expenses.
Now, it's time to uncover the solution to the third question.
How will you put a leash on your small business expenses?
The primary and first step in overcoming any business crisis is to adopt an expense reduction policy! To tighten the leash on expenses or costs, you first need to know the categories of your business expenses and keep track of them daily. You'll need to identify which expenses are unnecessary or where you're spending more. And for this task, you'll use the best apps for accounting, which is HishabPatiwhose slogan is digital ledger book '
The “HishabPati” app has separate features for tracking business expenses. Let's see, why keep business accounts in HishabPati app how the app can help you reduce your business expenses?
The 'Expenses' feature
available in both the mobile and web versions of the Hisaabpati app, offers a convenient method to track daily business expenses categorized by items and categories. These expense records are easily accessible, allowing viewing by day, week, month, or specific dates.Let's explore a step-by-step guide on updating business expenses within the 'Expenses' feature:Daily 'Add Expenses' in HishabPati
Access the 'Add Charge' option from the app's menu by tapping on the feature icon.- Access the 'Add Charge' option from the app's menu by tapping on the feature icon. On the 'Add Expense' page, start by selecting the category, followed by specifying the date and item for the incurred business expenses. Additionally, choose the payment mode and add any relevant notes in the 'Description' field. Save these details to record the expense.
- Categories here represent various segments of business expenses. Add daily spending categories using the 'Expenditure Category' option or by selecting 'New Category+' while adding a category. Examples include office management, monthly expenses, procurement of goods, communication expenses, etc.
- Items signify specific products or services for which payments were made, such as electricity bills, shop rent, guest breakfast, truck rentals, and fixed goods. After selecting an item on the 'Add Expense' page, you will have the option to add a new item.
- This streamlined process facilitates the effortless addition of daily expenses, enabling easy viewing, editing, or deletion of expenses from the list.
- You can get a category-based report here.
- You can also get an item-based report.
- You will also have the opportunity to view a total report.
Get a comprehensive report on business expenses in the Reports section
Within the 'Reports' section, access detailed reports of your regularly updated business expense accounts. The 'Expense Reports' option is available within the 'Reports' feature of the HisaabPati app.Keeping accurate records of small business expenses means tightening the leash on expenses!
Managing expenses efficiently is crucial for the smooth operation of a small to medium-sized business. You need to know how to reduce expenses to increase profits for a small business. Amidst the multitude of accounting tasks such as income and expenditure tracking, profit and loss analysis, debt management, outstanding balances, and profit calculations, expense management often receives less attention. The main reason for this is the failure to keep accounts in line with modern business demands using efficient and appropriate methods. If you still rely on manual record-keeping for your business accounts, managing the complexities of daily expenses can become nearly impossible for you.
In this scenario, many small business owners overlook tracking their business expenses, sometimes leaving their profit and loss to chance. This is precisely where an intelligent application like "HisaabPati" proves invaluable
With all your business accounts recorded and accessible on a single platform, you gain insights into where, why, and how much is being spent. Consequently, it becomes notably easier to curtail unnecessary expenses across various sectors, especially during specific occasions and for particular reasons.
So, maintain your business's accounts with HishabPati to minimize cost and boost profit Remember, every saved taka signifies an additional taka in profits!
