Save Time, Cut Costs, Grow Faster : Master Expenses Before They Master You

Financial coach Mrudula, seated comfortably, ready to share her expertise and warm advice.

When a small business doesn’t track expenses in a timely manner there are a lot of pitfalls and inefficiencies that creep into the business. These are some common issues I have noticed occur in businesses:

• A massive over-spending on one expense category with complete unawareness of the business owner

• Missing deadlines on bills to be paid off with a lot of arrears to handle 

• A sudden realisation that cash is short in the business bank account and it needs to be filled in from credit or personal bank account

  
  

All of this impacts the morale of the business owner making them believe that either the business is not profitable or that they should stop spending completely! 

Either is not true! 

A simple act of not managing expenses pushes the business owner in making unhelpful business decisions.

If you are making money, even if it is during some months in a year, there are high chances your business is very much profitable. But you would know that only if you track your cash flow by building an efficient expense management system.

Time vs. Money

Well in reality, business owners spend 5-6 hours a week chasing receipts, searching for bills to be paid off in the mountain of emails and reading bank statements to make some sense of it.

On the other hand, a seamless expense management system (which may need some level of investment) could only take a couple of minutes a week and an hour a month, giving you back atleast 20 hours a month, multiplied by so many years of running your business! 

And time is productivity in any business.

You could rather spend that time on servicing more clients, brainstorming growth ideas, networking or learning – things that helps you and your business grow.

Benefits of an expense management system:

• Help you record your expenses real time category wise

• Hence helping you keep track of the money you have spent so far

• Stay in line with the monthly budget

• Check in on whether recurring bills have been paid off

• Record and pay off bills the moment you receive them without missing deadlines

• Have a clear idea of the profits your business has made at the end of the month

• Do a month end review of your expenses and your business performance

  
  

Bank statements do not give you as a business owner any information to make decisions on. So looking at bank statements at the end of the month with none of the above in place, trying to make sense of the umpteen transactions, will prove to be completely unhelpful.

Choosing the Right System

There is no one size fits all.

Choosing the right system for your business starts with understanding where you business is now, your difficulties as a business owner and the problems you want to solve. One should also be cautious to ensure the chosen systems will grow with the business. 

For example, A micro business less than 2 years old, with a low volume of transactions, could do with a mobile app and some excel sheets. 

A Small to medium business older than 5 years may need some investment in a software to automate many tasks owing to a larger number of transactions. 

Some businesses may also need a dedicated person to handle the system, atleast for a couple of hours in a week. 

The system can be different, but at the end of the day expense management systems improves transparency and accountability in the business.

Here to suggest a basic expense system for a micro business with low volume of transactions:

- Start with a free mobile app (eg Monefy) to start recording transactions real time

- Maintain an excel sheet to then put the category totals at the end of the month also recording income

- This will give you an idea of the cash balance and profits

My approach

There have been real life impacts of systems implemented in businesses. My approach with clients starts with understanding them and their business, focusing on the business owner rather than only the systems, ensuring the systems not only help grow the business but also empowers the business owner.

 Ready to bring in some small impactful changes into your business? Book a free call.

Written by

Mrudula Muralidharan

Finance coach and Founder

Million Goals