LUTZ BUSINESS INSIGHTS
5 Tips for Reducing Your Company’s Expenses
BRANDI MCKAY, client accounting services manager
The easiest way to answer this question is by running expense-related reports through your accounting software. If you’re not using an accounting solution, or you’re not sure which reports to create, let us help.
Even without the insight these reports can provide, you may already know you need to cut expenses. Here are some suggestions that can help you do that.
1. Evaluate your inventory.
The trick is to keep enough product on hand so you can always fulfill orders. However, you don’t want to have stacks of t-shirts or hard drives that aren’t selling but use cash flow.
Like reports, inventory-management is difficult unless you’re using an accounting application. QuickBooks doesn’t just provide inventory level details; it goes a step further by telling you, for example, what’s selling, what’s not, and what items are the most profitable.
2. Minimize your income tax obligation.
Who doesn’t want to pay less in taxes? The reality is, you may be able to reduce your tax bill, especially given some of the changes included in the Tax Cuts and Jobs Act passed last December. Do you know yet how they’ll affect your business? Now is the time to find out. Year-round tax planning gives you time to make adjustments in income and expenses before the end of the year.
3. Consider independent contractors.
If you have employees, you know how expensive they can be (payroll taxes, benefits, etc.). The next time it becomes apparent you need to hire someone, determine whether that individual needs to be a full-time employee.
There’s a massive pool of available, skilled individuals who would prefer to work on a consulting basis. When you’re looking for one of these virtual freelancers, you can conduct your search across the country or around the globe. This independent contractor will be responsible for his or her own income taxes and benefits, saving you personnel expenses.
4. Restrict travel expenses.
You surely know that there are ways to meet with prospects or customers without hopping on a plane and racking up big bills. Sometimes, that’s necessary, but if you can accomplish your goals using a video conferencing service or screen-sharing tool, consider it. Virtual meetings are perfectly acceptable for most purposes.
If travel expenses are necessary, use a travel expense reporting application that lets you build in company policies so employees stay compliant.
5. Let a professional analyze your cash flow.
Managing your company’s finances is a constant battle between income and expenses. If the latter is the most problematic, we can take an objective look at your cash flow and suggest ways to improve it. Connect with us to see how our services can complement your existing accounting procedures.
ABOUT THE AUTHOR
BRANDI MCKAY + CLIENT ACCOUNTING SERVICES MANAGER
Brandi McKay is a Client Accounting Services Manager at Lutz with over seven years of experience in accounting. She is responsible for providing outsourced accounting services to clients with a focus in payroll compliance.
AREAS OF FOCUS
- Outsourced Accounting
- Tax & Payroll Compliance
- Healthcare Industry
AFFILIATIONS AND CREDENTIALS
- Medical Group Management Association, Past Member
- Nebraska Medical Group Management Association, Past Member
- MPA, University of Nebraska, Lincoln, NE
- BSBA in Accounting, University of Nebraska, Lincoln, NE
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