5 ways to manage your expenses and understand your cash flow

Managing expenses is an essential part of running a successful business. When you have a clear picture of your expenses, you can make informed decisions that help you manage cash flow, optimise profitability, and keep your business running smoothly.

• Create a budget and stick to it:
  A budget is a plan that outlines your expected income and expenses for a particular period. It’s a critical tool because it helps you track your spending and stay within your means. To create a budget, you’ll need to estimate your income and expenses for the upcoming period. Be sure to include fixed and variable, such as rent, salaries, marketing, and supplies. Once you’ve created your budget, track your actual spending against your budget to identify areas where you can cut costs or adjust your budget.

• Track all your expenses:
  You need to track all your spending. This includes both fixed and variable expenses, as well as one-time or unexpected ones. You can use accounting software to track automatically or manually record them in a spreadsheet. Whatever method you choose, be sure to categorise by type and compare them to your budget regularly. This will help you identify areas where you’re overspending and make informed decisions about how to reduce costs.
• Negotiate with suppliers:
  Negotiating with your suppliers can be effective. You can ask for discounts, payment terms, or bulk pricing to reduce your costs. Be sure to research prices from multiple suppliers before negotiating to ensure you’re getting a fair deal. You can also negotiate with your landlord or utility providers to reduce your fixed expenses. By negotiating with your suppliers, you can lower your expenses and improve your cash flow.

• Prioritise expenses:
  It’s essential to prioritise your spending. Some, such as rent and salaries, are fixed and must be paid on time. Other, such as marketing and office supplies, can be adjusted based on your budget and cash flow. By prioritising your expenses, you can ensure that you’re meeting your obligations while still managing your cash flow effectively.
• Use technology to automate expenses:
  Using technology to automate can help you save time and reduce errors. For example, you can use accounting software to automate invoicing, payment processing, and expense tracking. You can also use management apps to track receipts and expenses in real-time. By automating your expenses, you’ll be able to manage them more efficiently and accurately, reducing the risk of errors and overspending.

Managing your expenses is critical for understanding your cash flow and keeping your business financially healthy. By creating a budget, tracking, negotiating with suppliers, prioritising, and using technology to automate, you can manage your expenses effectively and make informed decisions that optimise profitability and cash flow.

Who is ActionCOACH’s Business Coach Mark Dilks?

Mark Dilks is an accomplished business leader, experienced coach, mentor and business builder. He supports business owners, executives and teams across Milton Keynes, Bedford, Northampton, Luton & Dunstable in all aspects of building profitable high growth businesses; from start-up phase all the way through to maturity and divestment. No matter what challenges you are facing, Mark will invariably have encountered a similar situation previously and will be able to support you to quickly and efficiently overcome your business hurdles by sharing examples of how other business have solved similar problems that you are experiencing. He is motivated, driven, tenacious and is able to get the very best out of all the resources available to his clients and to ensure that the maximum results possible are achieved.