Money: This is when you must sweat the small stuff
Careful expense management can make you think differently about what you spend by bringing together records in one place – your smartphone. That’s where an expense manager app like Solo Expenses will collate all the details, and open your eyes to what you’re spending – and how much of it might be wasted…
It’s the title of a book and a TV programme, and appeared in published articles in America decades ago, but when it comes to money management, ‘don’t sweat the small stuff’ is about the worst piece of advice you could adopt.
Sure, it works for stress levels of life in general; the noisy kids next door, the bus in front or the sports commentator on TV who just made an obviously bad call. Chill. Relax. You’re not watching the game for the commentary, and because you’re paying attention you know what really happened. And anyway, will any of it matter at this time next year? Of course it won’t.
But when it comes to money in general, and business expenses in particular, it’s better to take care of the tiniest detail; every penny and cent. The phrase coined by the mother of Andrew Carnegie – ‘look after the pennies and the pounds will look after themselves’ – is far more appropriate here. It certainly didn’t do Carnegie any harm…
A verse written by Benjamin Franklin, who stares out at his fellow Americans from every $100 bill, tells the same story about detail:
“For the want of a nail the shoe was lost,
For the want of a shoe the horse was lost,
For the want of a horse the rider was lost,
For the want of a rider the battle was lost,
For the want of a battle the kingdom was lost,
And all for the want of a horseshoe-nail.”
So what business expense should you keep an eye on? Well, all of them, I guess. But some of them are easier to track than others. Your annual accountancy bill, for instance, or the renewal of an insurance policy, will be obvious. In both cases, one invoice, one sum of money; easy to track.
Those aren’t the figures we’re interested in here. We need to be looking at the smaller sums; the ones in danger of slipping under your cost radar; of ganging up with each other to form a large and unwelcome deficit by the year end.
Six ones to watch
The following six items could come under this heading for your business. It’s by no means an exhaustive list, but it gives you an idea of what might be slipping through your net as unclaimed expenses. That’ll leave more money in your business at the year end, and a tax bill that’s larger that it ought to be in consequence.
- Energy costs. For a start, don’t get yourself tied into a long-term contract; then, never auto-renew. Shop around from time to time to see what deals are out there. We know of one business which changed supplier for gas an electricity, and shaved more than 40% from its annual bill.
- Fuel costs. Are you able to say, hand on heart, that you keep an accurate tally of the distances you’ve driven on business in a private vehicle, or the private trips you’ve made in a company one, so the two can be separate and distinct? If so, you’re in a tiny minority.
- Bank charges. Another monthly bill that, for a small trader, isn’t going to be enormous, but how do the charges you pay compare with other banks. If you haven’t looked for a long time, and remain gripped by ‘transfer inertia’ you may be paying over the odds. Why would you want to do that? Now might be a good time for a change.
- Have you ever been to buy paper for a printer, ink cartridges, or anything else for the office? It’s easy to do; the sums are small in the grand scheme of things.
- The world of telephone communication is changing rapidly. Broadband-based technology is capable of so much more than you might have thought, and there are cost-saving opportunities out there, especially if your business links a traditional landline with your mobile, to make sure you’re never out of touch. Talk to a specialist to explore how new technology can break your old habits.
- Are you still paying for that? Really? OK, there are times when you have no choice, but electronic communication can have documents whizzing to their destinations in the twinkling of an eye – they can be there before you’ve licked the stamp on a letter. Explore ways your business could go more electronic.
How to watch them
Solo Expenses Personal Use and Solo Expenses Business Owner are two versions of the same smartphone expense manager app. (In truth, the latter is a version that’s more feature-rich; the former a free-to-download version). When used diligently, both will record every detail of your expense spending, allowing you to see the difference between what you need to spend, and what’s going to waste because you weren’t really paying attention.
Explore the benefits offered by Solo Expenses and its big brother Expense on Demand here today – and make today the day you promise yourself you’ll become a better expense manager by taking up the app.