At My Fiscal Office we started using the term “zombie expenses” to refer to those expenses our clients don't realize they are paying month after month.
For example, one of our client’s Amazon Prime accounts was compromised and haunted by “zombie” accounts. Simply by unearthing and canceling the “zombie” accounts, this client is now saving hundreds of dollars monthly.
Other-times the expenses are for services that can be found less expensively or negotiated. We had a service billing us $499 a month. When we spoke to them, we got them to downgrade the plan while keeping the needed services for $249 a month.
If you are using QuickBooks Online - or most any other accounting systems - it is easy to link your business credit cards to pull in charges. This makes it easy to run a report for one complete month for the expenses paid by your credit cards.
With this data in hand, review each line item to find recurring expenses related to items you don't need, don't use or may have a less expensive price. And you can expand your review to look at items such as meals and travel for additional potential savings.
Once you’ve identified where you can save, do the work to reduce expenses. Getting your team involved in a review - monthly or quarterly - will help cultivate fiscal discipline as a core company value.
The next step is to be strategic about what you do with the savings:
- The bottom line
- Investments that will grow your business
- Paying down any debt you incurred to start your business.
The temptation is to prioritize one of these three. A better plan is to use your savings to address these three critical uses of funds.
