As an entrepreneur, aside from the growth of your business one of your primary goals is to find a way on how to save money.
Most business people are so focused on sales they can forget that costs are usually a business killer. A penny saved is a penny earned is a mantra we should all live by and that is why it is essential for you to monitor how you spent your hard-earned cash.
To help you achieve your goal, we’ll reveal to you the key tips on how you can save thousand for your Small Business.
1. Stay on top of your accounting
Keeping an eye on your financial records is a MUST. Not only it will help you maintain good cash flow, but it will also be easier for you to track and maximize all the expenses you can claim for you to reduce your tax obligations.
Apart from that, it will remind you of the approaching invoice due dates and keep track of all those obligations that don’t come with an invoices such as BAS and Superannuation.
It is just far too common for us to see small businesses fail because the owner did not invest enough energy into bookkeeping only to discover too late that they are in a deep pool of debt having been spending money that is not theirs to spend
2. Vehicle Deduction
If you are using your car for work purposes on a daily basis, chances are you could be eligible to claim the expenses as a tax deduction.
For you to determine the number of your deductible car expenses, you can either use any of these two methods.
First one is the Cents per Kilometre.This method doesn't require any written evidence to show how many kilometres you have travelled, but in
order to support your claim, you need to produce a diary record of work-related trips.
If you use this method, you can claim a maximum of 5,000 business kilometres per car at a flat rate of 66 cents per kilometre.
In case that you have a joint owner, and both of you use the same car for separate income-producing purposes, each of you can claim up to a maximum of 5,000 kilometres.
Interestingly, joint owners can use different methods from each other in calculating and claiming their car expense deductions.
Meanwhile, the downside of this, is you are not able to make a separate claim for depreciation of the car's value.
Another option that you can use is the Logbook Method which allows you to base your claim on the business-use percentage and requires you to keep a logbook of all of the expenditure for your work-related trips that covers at least 12 continuous weeks.
These are the following expenses you can claim under this method:
- Fuel and oil
- Repairs and maintenance
- Insurance and registration
- Interest on car loan
- Vehicle depreciation
Take note that Logbook method can provide you with a greater tax deduction rather than the Cents per Kilometre wherein the maximum you can claim is limited to $3,300 per car. You can only benefit from this method if you travel more than 5,000 business kilometre and this can also be used for two or more cars, just make sure that the logbook for each car must cover the same period.
3. Go Paperless by moving to cloud
You may think that going paperless using cloud technology is expensive and will cost your business a lot.
But little did you know that organizing your paperwork digitally will eliminate the costs associated with purchasing paper, ink cartridge, fax and copy machines along with the expensive hardware and storing data.
Cloud software enables small business to access the sort of enterprise level software that was once the sole domain of large corporates. Accounting, CRM, Inventory, POS and automation software just scratches the surface of the type of software that most small businesses can now access affordably.
Aside from the financial benefit of having a paperless office, you can now say goodbye to manual filling and storing of receipts, invoices and other financial paperwork.
You can securely backup your files electronically without having a risk of losing important business documents and gives you the access to retrieve it easily anytime and anywhere you want.
Beyond everything, switching to cloud will increase efficiency and productivity of your firm.
You did not just save money, but you save time too.
4. Keep the business and personal finances separate
Even if you’re just starting out, it is imperative to draw the line between business and leisure to avoid complication like missed deductions, errors in your financial documents, worst – an ATO audit.
Setting apart your expenses wouldn’t only keep your business away from that horrible financial nightmare, more than that, it can help you save a large amount of cash in the process.
Taking advantage of tax deductions and write-off business expenses are one of the main reasons why most of the business owners choose to separate business accounts.
Most importantly, keeping an accurate record of your accounts will give you legal protection to your business and personal finances in the future.
5. Pay on time
You might be wondering how you can save up money while paying off your debts. Will that be possible? Absolutely Yes!
Paying your bills on time will not just save you from unnecessary penalties that might hurt your bank account, it will also qualify you for a lower interest rate and a higher chance of credit card and loan approval.
Along with that, there are some companies who offered early payment discounts or incentives (you might give it a try and ask your supplier If they have this kind of offer)
Above all that, sticking to the schedule will let you enjoy the benefit of being stress-free.
So why settle your payment late if you can save up more in paying on time?
6. Outsourcing and Offshoring
Small businesses and startups are basically the ones who benefit the most when outsourcing. In Which, they can find the expert assistance they need on a part-time or even hourly basis and receive a quality work done at a lower price.
The good thing about outsourcing is you can free your company from the cost of Mandated Super Guarantee contributions, sick pay, fringe benefits or any of the other extras that pile on top of a full-time employee.
Considering outsourcing as part of your growth strategy will also help you reduce the cost of operations and improve productivity.
7. Hire an expert
Running a business means knowing your accounting.
And if accounting is not your thing and you know nothing about it, do yourself a favour - hire an expert.
You can either bring in an accountant or bookkeeper or maybe both!
Accounting mistakes are bad and can cost you thousands.
So have someone who will monitor your financial well-being and keep those books in order, to ensure that there are no mistakes made in your accounts.
Now I spilled out all the secrets, you can immediately execute this to your business and start saving up thousands!
If you need assistance in keeping your books in order, don’t hesitate to give us a call at 1300 855 763 or you can book a free consultation with us.