Increase Business Profitability Through Reviewing Expenses

In this series, we are sharing the ways you can make your business more profitable, and in this article we are talking about reviewing your expenses.As accountants, we love numbers, but we know how daunting reviewing outgoings can be as a business owner, particularly if it is required regularly, but the business owners that do this, are able to react, and grow their profits quickly and effectively.

Without being able to regularly understand and review your expenses, you won’t be able to know where you can cut or increase costs.Knowing your profits is just one piece of the business pie, the other part is the knowledge of your outgoings. Things to look for in those expense reviews is:

1. Where are you spending the most of your money each month/quarter?
2. Where can you potentially negotiate costs with suppliers - for example, if you are regularly buying a specific product from a supplier, you may have the ability to have a discussion with them and get a discount.
3. Can you see any expenses that need to be stopped? Often, we are just distracted by the day to day running of the business, and can miss out on the little fees that we have on our regular direct debits, that perhaps we are no longer using. These regular reviews will ensure you don't keep paying for things you don't use!

We recommend having at least a quarterly review of your business Profit and Loss statement and discuss it with open-minded unbiased trusted people, they can truly help you to make sure your business continues to be profitable, and to catch or change any expenses that are going out regularly.