How many of us like the word “audit”? I bet if we were all in the same room together right now, not a single hand would go up. Let me bring down the “yuck” factor out of the word “audit”, or in this case “Expense Audit”. Come to think of it, most people don’t like the word expense either. An expense audit is just a fancy way of saying, “check over your expenses”. Seriously, that’s it.
To get a jump start on this exercise, you can sign up for my free Resource Library and download the pre-formatted worksheets that will make this exercise go faster. But you can also just follow the instructions in this blog post. Either one will do the job.
Expenses in our business can add up quickly. Sometimes in really sneaky ways. Only $9.00 per month here, another $3.95 per month there. Sometimes we take on these smaller monthly expenses because we think we need whatever they’re for and “It’s only a few dollars” right? Often these “few dollar” expenses are the ones that weigh us down the most because they add up so fast. It’s like when we go grocery shopping. As we’re putting items in the cart, the individual prices seem so reasonable. Then we get to the checkout, and suddenly, we’re trying to figure out how the bill got so darn high!
Here’s a step-by-step way of keeping an eye on YOUR money before it becomes $omeone else’s money!
What you’ll need:
- 3 sheets of paper.
- A pencil.
- Your calendar or reminder system of choice.
- Your bank statement(s) or expense reports from your bookkeeper. Do not go by memory! You need real documentation so nothing gets left out.
$tep 1 – Don’t procrastinate, do this now!
$tep 2 – Take your 3 sheets of paper and label each one at the top as follows: Title sheet 1 as “Keep it or Dump it”. Title sheet 2 as “Calculating Your Dump it Numbers”. Title sheet 3 as “My Money Now, Plan”
Keep it or Dump it?
$tep 3 – Step 3 is the most important because this is where we justify expenses by listing what we get out of them, or we see expenses we’ve outgrown, aren’t being used, or maybe even forgot about, but yet we’re still paying for!
On the “Keep it or Dump it” page, write down the names of all your monthly recurring expenses. While there will be plenty of monthly costs that you need to keep, mixed in with it all may be monthly fees and expenses you’re no longer benefiting from.
While reviewing each expense you’ve listed, really give it some honest thought as to whether you still need to keep it. If you haven’t used whatever the expense is for in a while, you forgot about it or just don’t believe you’re taking advantage of something you thought you would use, write “dump it” to the right of that expense.
Calculating Your “Dump it” Numbers
$tep 4 – Now that you’ve looked over all of your monthly expenses and noted which ones you’re ready to depart with, use the “Calculating Your Dump It Number” sheet to list and calculate your savings.
Write down each expense you’ve decided you no longer need. Beside each one, list what the monthly cost was. Then, add up all those monthly expenses into one total. Take that total, and times it by 12. That is the amount you are now saving every year! Cha-ching!
My Money Now Plan
$tep 5 – This is the fun part. You get to decide how you’re going to use the money you’re saving. Will it flow down into your paycheck for you, or will you reinvest it (or part of it) back into your business in a way that helps you move forward instead of it being the empty expense it was before? Use your “My Money Now” worksheet to brainstorm the different ways you could use this money. Here are a few ideas to get you started:
Take a course?
Is there a course you’ve been wanting to take that will help you with your business (landing clients, a new skill related to your industry, etc.)
Website tweak or make-over?
Does your website need a tweak or make-over? Hire someone to do that. First impressions make a big impact on potential clients. Your website may be their first impression of your professionalism.
Hire a Virtual Assistant?
If you’re feeling like your time is spread too thin in your business and your life, maybe it’s time to hire a Virtual Assistant (okay, you know I had to throw that one in right? ;-)). If you’ve reached the Boss Lady tipping point in your business by doing everything yourself, maybe it’s time for you to think about some strategic delegation that helps you create more time in your day for doing what matters most in your business.
The Final and Most Important Step
$tep 6 – Now that you’ve reviewed your expenses and given a few the heave-ho, the best way to keep an eye on your money, before it becomes someone else’s money, is to set a recurring reminder on your calendar to review your expenses regularly. This will make sure you have control, awareness, and the ability to leverage your Boss Lady numbers the way you want to.
You can do the expense review monthly or maybe quarterly, whichever one works best for you. Remember, It’s your money. You’re in charge of it, don’t be afraid of it. You can use your extra money to cut yourself a bigger paycheck or leverage part of that money to move you forward in the business you’ve been working so hard on.
You can sign up for the free Resource Library here to download the pre-formatted worksheets for this exercise, and other printables as well that will help you write your next blog post, plan out your 90-day success strategy, and a whole lot more!
What ways have you found that help you keep an eye on your expenses? We Boss Ladies need to stick together and help each other out. I’d love to hear your expense management ideas, so please share them in the blog comments!
Have a great day,