Author Archives: amit

Tracking business expenditure is vital to effective financial management and business success.  An accurate recording of expenditures ensures that you’re prepared come tax season and that you can claim all tax-deductible expenses. It helps you become financially aware and be able to manage costs.

With monthly expense tracking, you can quickly calculate your profitability and make necessary adjustments. Another benefit is that you can promptly reimburse out-of-pocket expenses by your employees, thus keeping them happy. All of these can have a profound impact on your business bottom line.

To ensure that you have an up-to-date and effective monthly expense tracking, you need to implement the right strategies and use appropriate tools. Here are some tips to help make expense-tracking simpler and quicker.

Separate personal and business expenses

This is one of the major challenges that beset small business owners. Due to the overlapping nature of personal and business expenditure, it can be quite difficult to segregate them. However, it is important to be constantly aware of every expense so that you can claim rightful tax-deductible expenses later.

When shopping supplies, make sure you have a checklist of items, classified as a business and personal supplies. Ideally, you should request a separate receipt for all business purchases. It is recommended that you open dedicated bank accounts for business and personal purposes.

Dedicated bank account for business

Opening a separate bank account for business can help you track your business expense more easily. You can simply check the monthly bank statement and transaction history, and categorize expenses from there. This should also avoid mix up between personal and business money.

If you are using a credit card for business, you should have a dedicated credit card for business purchases. Often, it is difficult to categorize your expenses if you’re using only one credit. It is also impossible to separate purchases on a single receipt.

Connect bank to your software

Simplify your business expense tracking by connecting your bank with your software solution. While some business owners feel uncomfortable, reliable accounting software guarantees high-level security to protect your data.

By linking your bank account to your software, you can automatically access banking transactions and integrate them into your expense tracking software. This removes the need for duplicate data entry. You can also easily account for every transaction charged to your bank account.

Decide on an expense tracking method

Small businesses can monitor expenses through cash accounting or accrual method. In cash accounting method, transactions, either revenue or expense, are recorded as soon as the payment is received or made. Meanwhile, in the accrual method, transactions are recorded even if the sales or expense has not been paid for.

The cash accounting method is ideal for small businesses with limited transactions. It is straightforward and uncomplicated. The accrual method is often used by large companies that deal with multiple transactions and require continuous monitoring of the company’s financial standing.

Use accounting system

IT developers at Kansys emphasized the importance of automation in efficient monthly expenditure tracking. Enterprise software solutions can be equipped with expense monitoring capabilities. There are numerous options available nowadays – from commercial off-the-shelf software to tailor-made solutions.

If you have a limited budget, you can try free accounting applications available online. Although these IT solutions have basic features, they can prove useful. Small businesses with limited payables and transactions can also use basic spreadsheet software for recording expenses.

Consider cloud-based expense tracking software

Unlike on-premise software programs that are installed into your computer, cloud-based software apps are hosted online and can be accessed through the Internet. With a cloud-based expense tracking software, you can record and manage your expenses even while you are away from the office. For example, you can input a receipt into the system immediately upon purchase.

Cloud-based software enables you to check business costs in real-time allowing you to make timely and informed decisions. It also enables seamless collaboration as your employees can access it anytime, anywhere.

Digitize all receipts

Going over a pile of crumpled receipts can be overwhelming. To avoid this problem, you should digitize all receipts by scanning them. Once you get a receipt, take a picture using your smartphone or scan it with a standard scanner. Several mobile apps can be used for scanning documents. Alternatively, you can request for digital receipts instead of paper-based receipts.

Digitizing receipts should make it easier to retrieve, gather, and organize them come tax time. This should save you time and avoid headaches. It should also give you a clean digital record for easier accounting.

Scrutinize your travel expenses

If your business involves traveling, you need to take special note of all travels. Many small business owners overlook travel expenses that can be applied for a tax deduction. Some business trip-related costs include flight expenses, mileage, meals, accommodation, and other related costs. Record every single detail of your business trips, so you won’t miss out on any of these costs. 

Record expenses right away

Lastly, record every expense as soon as it is incurred. Don’t wait for your receipts to pile up or for the end-of-month before you record them. Procrastination can only complicate things. You might also lose the receipts and render it impossible to reimburse or include them in your tax deductions. The use of software solutions proves useful in real-time tracking of expenses. You and your employees can immediately input the transaction into the software. This ensures timely updating of records.

Final Thoughts

Monthly expense tracking can be a tedious task that entails a lot of discipline. But it is a necessary task that can save you headaches and trouble in the long run. While it might seem mundane and unimportant, expenditure monitoring is something that you need to take seriously if you want your business to succeed. Follow the tips discussed above to make things easier.

If you run a small business, shipping expenses can cost you a considerable amount of money. Implementing sustainable ways of shipping your products can contribute to the success of your business.

Efficient shipping strategies are vital to every business, but most particularly to small businesses. As a small business owner, you want to maximize to tap on potential savings and revenue. Shipping and postage cost is a recurring business expense that you can cut considerably.

Sadly, many businesses embark on the hit-or-miss method when deciding on their shipping strategy. They work with different couriers and try different services that eventually lead to losses. Aside from financial costs, it can also negatively impact your business reputation. Late or undelivered shipments are among the most common customer complaints that can affect client satisfaction.

Below are some tips on how to keep your shipping expenses low. These tips can result in major savings at the same time give you peace of mind knowing that your products are delivered to their intended recipients on time.

Choose the right carrier

Not all carriers offer the same price. For instance, FedEx, DHL, and UPS have a comparably higher price than USPS. Unless you’re sending significantly high volume, using USPS can save you a considerable amount. So, for small businesses with lightweight items, USPS is the ideal carrier. You can cut your shipping costs by up to half the price of other providers.

However, this does not mean that you should ditch other carriers. Some shipping companies offer considerably lower pricing tiers. You can check out their retail rates and their conditions to find the best deal.

Negotiate the rates

If you have a particularly high volume shipment, you can talk with your shipper and negotiate the price. Get in touch with your carrier and explore some of the package rate specifically designed for small businesses. No business is too small to negotiate so don’t hesitate to approach them.

Explain your shipping criteria to the carrier. If you have a longer lead time and your package does not require special care needs, the shipper might consider offering you better or special rates. Shipment companies usually have small business specialists who can advise you on the best way to send your deliverables, either air or ground. They can also recommend a shipping schedule that can help lower costs. Businesses that don’t ask can pay as much as 40 percent on unnecessary fees.

Consider your carrier as a team and not just as a provider. This enables you and your shipper to deal with shipping issues as a team, thus better results for both parties.

Consolidate your shipment

Many small businesses are unable to get great deals from carriers because of their limited shipment volume. As a result, small businesses are constrained to take costly pricing tier.

One way to save up is to consolidate your shipment with other companies. There are less-than-truckload (LTL) shipping companies that allow you to piggyback your goods on their current high-volume shipments. With this, your packages are shipped alongside a bigger shipment. Thus, you pay for only a fraction of the cost. LTL shipping companies will find available space where your package can fit in.

Another way is by coordinating with other companies in your area and consolidating your shipments. You can join a local professional association and arrange a shipping schedule. However, consolidating may not always work, especially if you have special shipping requirements.

Ensure accuracy

One of the simplest ways to save on shipping is by stating the accurate description and weight of every shipment. The more accurate the shipping details are, the more likely that you will not be overcharged for excess fees.

Accuracy does not only pertain to the package details. You should also have accurate details about the recipient. Software developers at Byteplant emphasize the importance of address validation in increasing shipment deliverability. Putting the wrong address can lead to undelivered goods, a negative impact on client satisfaction, and unnecessary financial costs. According to the USPS Office of Inspector General, undelivered-as-addressed (UAA) costs businesses about $20 billion a year. The use of address validation tools can greatly help improve accuracy and increase deliverability.

Save on packaging

The packaging is a major shipping-related expense that many businesses overlook.  Check your packaging and consider reducing the layers if possible.

Every new box or packaging material that you use means additional costs for your business. Reusing packaging materials that you receive (and often stuck in your warehouse) can help cut your expenses.

When reusing boxes, make sure that you choose the ones that are in good condition and do not contain markings from its original supplier. Better yet, you can request your suppliers to send goods in unmarked packaging. You can also use worn-out or labeled packaging materials for other purposes. For example, you can shred old boxes and turn them into filling materials.

Recycling and reusing these materials will not only help your business save money but also an eco-friendly initiative. However, you should never sacrifice quality over savings. Overly skimping on packaging can compromise the structural integrity and safety of your shipment. The goods get damaged during transit and result in a negative impact.

Cut excess weight

Shipping costs are based on the dimension, size, and weight of a package. Heavier and bulky packages always cost more to ship. Review your packaging methods and explore ways that will avoid wasting space while ensuring structural integrity. Try to fit your product into the smallest possible package.

Usually, it’s impossible to trim down the weight of the product. However, you can avoid wasting space by looking for the best packing method. Better yet, you can try to redesign the product for long-term savings.

Pass on the shipping costs

Although free shipping is ubiquitous in e-commerce, it is not the standard. Many small businesses are unable to absorb this added cost. To stay competitive while ensuring profitability, you should consider passing on the cost to the customers by slightly increasing the prices to account for the shipping expenses.

Alternatively, you can offer free shipping but with conditions such as orders reaching a profitable margin, orders with several items, or local orders that you can personally deliver. Likewise, you can offer free shipping for repeat transactions or customer loyalty. Another way is to offer a pickup option to cut shipping costs for you and your customers.

Final Thoughts

Running a business entails a lot of things to monitor and manage. All of these strategies can help save money on shipping and increase your business bottom-line. You just have to stay organized to see the considerable amount of savings you can make.

Outlet stores, also known as factory outlets are stores where brands sell their commodities directly to the consumers. Typically, these commodities come at a cheaper price, and this is what makes outlet stores popular among most people. 

Today, most brands have started operating their own outlet stores. These stores exist as physical shopping places, located in a shopping mall or shopping district. Interestingly, some brands have also started to operate online outlet stores.

What’s the origin of outlet stores?

The first outlet was opened in the eastern U.S. back in the early 30s. These outlets, which were operated as factory outlets, started to offer excess or damaged products to the company’s employees at a cheaper price. With time, the customers to these outlets expanded to other customers who were not employees of the brands operating the stores. 

In 1936, a famous men’s clothing brand by then—Anderson-Little opened the first outlet, which was independent of the brand’s existing factories. The main purpose of this store, together with others was to dispose of damaged or excess products. This continued up to the 70s. 

Vanity Fair opened the first multi-store outlet mall in 1974. This store was located in Reading, Pennsylvania. The growth of outlet malls became rapid in the US in the 80s and 90s. Today, a typical outlet mall in the United States occupies a space of around 100,000 – 200,000 sq. ft. of retail space. This space can gradually grow to around 500,000 – 600,000 sq. ft.—which is about 5 hectares. 

In 2003, the United States had a total of 260 outlet stores, which generated a revenue of $15 billion. The number of outlet malls grew from 113 in 1988 to around 472 in 2013. 

However, you should note that outlets are not an American thing only. They are also spread across other countries in North America, Europe, and Asia. In Canada, the first outlet mall, Dixie Outlet Mall dates back to the late 80s. 

British retailer, BAA McArthurGlen, operates 13 outlet malls in Europe. These malls have over 1,200 outlet stores and occupy about 3 million sq. ft.—which is around 30 hectares. Most people refer to this as an outlet village. Outlet stores have also started emerging in Asia from the mid 90s. 

So, what benefits do people get to enjoy when they shop at outlet malls?

Cheaper prices

As we said earlier, manufacturers normally sell their products directly to the consumer at outlet malls. This, in turn, means that the consumer won’t have to go through a distributor or middle man to get the product. Therefore, the cost needed to get the product to the consumer is significantly reduced. 

This is the major reason why products at outlets are much cheaper than those sold in an ordinary retail store. The closer the outlet is to the factory, the cheaper the price. Some customers say that they get discounts of up to 40% when they shop at outlet stores. 

More product promotions

Generally, outlet malls, such as the designer outlet store, VIA Jurmala, have a lot of product offers and promotions. For instance, you can find seasonal sales, like winter sales, Christmas sales, and New Year sales, among others. Besides, you can also find amazing promotions, like buy two, get one free promotion, since the sellers want to clear products that haven’t moved for a while. Interestingly, you can also find discount coupons, which you can use to push the prices further down. 

Wide range of commodities

This is a common thing with outlet stores. Major brands normally display all their product range at outlets. That means customers get to enjoy a wide range of commodities. Typically, you’ll also have lots of options in terms of shapes, colors, as well as sizes. Besides, since outlet malls are much larger than normal retail stores, you will have all the freedom to explore the mall and search for the products without anyone bothering you. 

All in all, outlet stores tend to be very busy, especially during the weekends and holidays. In fact, you can find long queues for shoppers waiting to get into an outlet during holidays or weekends. Therefore, it can be better if you can find other times to shop, other than weekends and holidays. For instance, shopping on weekdays can save you valuable time that you’d have spent queuing up at the store.