Managing a business is a very difficult venture to do successfully. It requires a great deal of patience and attention to detail. Sometimes, certain details can often slip through the cracks when dealing with so many things at once. This can often be the case when handling money. There are many businesses that find themselves spending more money than they need to. It is because of this that it is important to take the time to sit back and examine your finances from time to time to ensure you are in the right place. The following are some helpful tips that can guide you when doing so:
Review Employee Benefits
Business owners may wish to bolster payments for certain employee benefits. This can include health insurance premiums, educational assistance, transportations costs, etc. Doing so can reduce taxable income and strengthen employee loyalty.
Investigate Equipment Costs
Cutting back on money can be as simple as looking at where you are overusing it. For example, business owners can examine phone usage, lease contracts, etc. Maybe you can cut back on how many phone lines are being used in the office. Maybe you can purchase a piece of equipment instead of leasing it from another company.
For some businesses, it may make sense to push off invoices to do later in the year or even within the next year. Invoicing the month of January instead of December can lead to lower current-year profits. This can directly reduce their tax liability in the current year.
Focus on Variable Costs
It can be beneficial for many businesses to cut back on specific variable costs. For example, advertising expenses or sales commissions.
Negotiate Lower Rent
When renting an office, you may be able to negotiate and bargain yourself into lower rent costs for the space. This is especially so if you are in an area with unoccupied office buildings or nearing the end of a lease term.
Sublet Office Space
As long as your landlord agrees, it can help to bring in more money if you can rent space to another partner or company.
Reduce Storage Costs
If you have inventory that has not been used for months or years in the office, it can be time to sell, donate, or dispose of them. Storing unused or obsolete inventory can least to certain associated costs that can deplete a budget. This can include insurance, spoilage, interest, and taxes.
If your business has clients that are not making payments on time, you may wish to write off uncollectible accounts. This can increase the year’s business expense deduction. In addition to this, it can help to get rid of properties that no longer benefit the business so that they can be deducted as a loss within the year.
Werdann DeVito LLC is an experienced Certified Public Accountant firm serving clients throughout New Jersey with all of their financial needs. If you need quality assistance with accounting, tax, or consulting services, contact Werdann DeVito LLC today.