In small business we are always looking for new ways to save money and one of the easiest places to save considerable money is when doing your small business accounts. Simple little changes to your accounts can help you save money on your accountant, postage costs and even with your bookkeeper so let me show you how.
Number 1 Way To Save Money: Email Your Invoices and Statements
Even in this day and age there are still small business owners who are intent on wasting money and one of the easiest ways to waste money is to send out invoices and statements by mail.
Did you know that it costs $5 per letter to send out an invoice or statement by Australia Post?
Why, well in Australia, postage on its own will cost you 60 cents, then you have the cost of the envelope, piece of paper, the printing, maintenance of the printer, placing the statement into the envelope and then to cost of physically posting the letter. The total cost is at least $5 a letter.
The best way to send a statement or invoice is to email it to the client. When you setup your credit applications make it mandatory that your customers provide an email address for their accounts staff.
Just think of it this way, if you send out 100 statements a month, it is costing you $500 a month or $6,000 a year. What could you do with an extra $6,000 a year?
Number 2 Way To Save Money: Put lots of Information in the Memo Field
If you are using accounting programs like Quickbooks or MYOB, when you enter invoices and bills, you have the option to enter detailed information in the memo field. Often people neglect to put any information in those fields.
The catch is that your accountant will use the memo field to do your yearly tax to identify what the transaction is all about. In fact they have an accountants report that primarily uses the memo field, so if you do not have anything in that field, what the accountant will do is to ask you questions about your transactions. The more questions the accountant asks, the larger your accounting bills.
The key is to add as much information into the memo fields as possible so it is very clear what the transaction is about.
Number 3 Way To Save Money: Do Not Print Cheques
Printing cheques are one of the biggest waste of money in this century. Ten years ago, cheques were a necessary evil and being able to print them out was a big way of saving money, compared with having to manual write them out. However, with the advent of internet banking they are now more a liability then a money saver.
You cannot print a cheque on normal paper, so the first big cost is having to buy correctly formatted cheques and they will generally cost between $3 and $5 a cheque depending on the supplier. Remember this cost doesn't include your printing costs or sending it to the supplier via Australia Post. To print a cheque and send it to a supplier it will cost you up to $10 per cheque (including postage) plus on top of that, cheque costs more to deposit.
My recommendation is that instead of sending a cheque, I recommend that you transfer all payments using electronic funds transfer if you are doing a domestic payment in Australia. Normally it will cost no more than 20 cents compared to $10 for a cheque.
Number 4 Way To Save Money: Enter Your Accounts Daily
One of the big mistakes small business owners make is to not enter their accounts information daily. I recommend that you get into the habit of doing it daily to ensure that you don't miss any important payment dates. Doing this one task can save you hundreds of dollars in over due fees for your payments.
Number 5 Way to Save Money: Scan All Receipts that Fade
In Australia, you must have a tax receipt for all expenses you are claiming however, many cash register receipts fade over a period of time. If you don't scan your receipts and save them in electronic format, you may find if you get audited by the tax office, that those expenses may be declined. Always scan your receipts and store the electronic files safely.
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Chris Le Roy is the Managing Director of the One-on-One Professional Business Training which operates in Brisbane and Townsville. He is the author of the book How to Screw Up and Stay in Business and speaks regularly on issues such as stress management, business development and how to build a small business successfully. His company provides training through out Queensland in Microsoft office, Business Courses, computer training and First Aid Courses
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