Hidden expenses are one of the biggest headaches of small business operations and accounting. In some cases, the small business owner doesn’t even know they are there. Another reason they are an issue is because are not subject to auditing because they are only a small part of the business.
It is imperative that small business accounting and finance strategies are designed with hidden expenses in mind. One of the main reasons that a small business owner ends up with tons of hidden expenses is because they have not budgeted or correctly accounted for necessary expenses. Working with TSAT will allow you take the time each month and plan out your expenses. This will help them determine if they need to increase their budgeted amount. They will also be able to see at a glance if their budgeted numbers are too low or if they should cut back on certain expenses.
So what are some of the most common hidden expenses for small businesses?
- Too many employee perks
- Using an expensive subscription when a cheaper one will do
- Incorrect insurance coverage
- Overage charges on the internet bill
- Unnecessary Maintenance
- Too many accounts for the same program
- Paying for office space you don’t use
- Industry Association Fees
- Random/unexpected costs
So, you’ve identified the expense, what now?
Call TSAT! We’ll help you create a comprehensive business expense report. This report should include all business expenses, both fixed and variable. Include things like fuel, lunches, and drinks at social events. It should also contain information on expenses pertaining to the business such as salon treatments, laundry, office supplies, and other miscellaneous office expenses.
TSAT will then assist you in the analysis of the comprehensive report findings. In this step we’ll we’ve identify any problematic or unnecessary outflows.
The next step is to eliminate any business expenses not included in your small business accounting program. The best way to do this is to eliminate any expenses you don’t use on a monthly basis or are never used. For example you may have a vending machine, but rarely visit for your snacks. This machine could be eliminated from your small business accounting program so you will only have to record your snacks as part of your office supplies.
Be careful about where you eliminate any expenses from your small business accounting records. You do not want to include one expense and claim it as a deduction and then have that money come back to you due to an audit. Also be sure to look at the various types of transportation expenses you incur. Many times businesses use their vehicle to drive to meetings and this can be a allowable deduction. However, make sure you document how many miles you drive per week and whether it is city driving or road driving.
In conclusion, TSAT Accounting Solutions is a powerful ally to help you keep track of your expenses and help you eliminate expenses which can be considered valid business expenses!
Here at TSAT, we are not simply tax preparers. We work with you to provide a 360-degree strategic financial advice, including small business operations and investment guidance. We will help you stay ahead of the curve when it small business or personal investments!
If you are a gig worker or small business owner looking to grow your business, TSAT’s AMAZING team considers much more than just your taxes!
TSAT’s Services will let you focus on your business’s core competencies! Whether you have a small business or you need help personally, TSAT can give you HOPE! Call us today!
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