Ever had a moment when you needed cash right away? So much so that you headed to your couch to see what might be hiding in the cushions?
Yeah, we've done that, too.
But here’s some good news. We’ve learned there's always a way to manage expenses better and, as a result, find extra cash when it's needed most. Over time, we’ve figured out how to ditch expenses we can live without. We’ve scrutinized where every penny and pound is going. We’ve cashed in on money hiding out in long-lost invoices. And that’s just the beginning.
Today, we’re sharing some of our go-to strategies for managing expenses and making the most of our moolah. Best of all? There’s no couch reassembly required.
Hack #1: Cut one expense right now (even pens count!)
When cash gets tight, pull out your chopping block. We guarantee some of your precious pennies are hiding in sneaky places like high credit card interest rates, rent increases and unnecessary supplies. Finding and then cutting at least one of these money-draining items from your expense sheet will boost your bottom line – the amount of money in your business after income and expenses.
Is this easier said than done? Maybe.
But when you take a good, hard look at your business’s spending habits and understand the “why” behind your buying decisions, chances are, you’ll be rewarded with a windfall of cash.
Here's what a few folks who work for themselves have shared about taking a belt-tightening approach to managing expenses:
“I have been in a situation where the money spent on supplies should have been spent on food and transportation. Although I never felt poor, I did feel broke.” —Victoria Beadz, Jewelry Designer
“I was able to get by on a very lean budget. There were times when I was paying bills at the last minute, but we survived. Watch your spending and be wise on business purchases and you will succeed.” —Rebecca Neilson, QuickBooks ProAdvisor
“Spend as little money as possible on anything (or anyone) that does not directly bring in revenue. Always ask for a discount or a better deal. If they say no, at least you tried.” —Leslie Barber, QuickBooks Community Leader USA and Co-founder, NutraBella
Ask yourself, "Do I really need _____?”
If the answer is yes, ask yourself, “Can I get it somewhere else for cheaper?"
Then, choose ONE expense to cut for the next month.
Some great places to start:
Hack #2: Know where your money is going
Here in the QB Community, we think obsessing over finances is a good thing. We may not always have tons of time to regularly scrutinize our expenses and earnings, but it pays (literally) to know exactly where your cash is going, every single day.
Pull out a piece of paper and write down answers to these questions:
Answered all these questions? Great. Now we challenge you to make a deal with yourself. Track each and every pound you spend for 30 days. Then, cut out ONE expense you're spending money on today for the next 30 days. (Don’t forget to let us know what you cut – and if it made a difference!)
Here’s how two of our QB Community members think about this kind of expense-management challenge:
“It never ceases to amaze me how money seems to disappear. Nailing money in and out is crucial. Every. Single. Day. While I think QuickBooks makes it easy, do it whatever way works for you. Even a simple pen and paper will do. The key is that you make it a daily habit.” —Leslie Barber, QuickBooks Community Leader USA and Co-founder, NutraBella
“So many of us think about cash when we look backwards. My secret is in planning ahead. I know what bills are coming due in the next 30 and 60 days and can anticipate the cash I need to generate to pay them. Preparation helps me sleep at night." —Victoria Cameron, QuickBooks ProAdvisor
Hack #3: Get unpaid invoices paid
Eliminating at least one expense is a great start for smart, effective money management. But we’ll bet there’s still money hiding in plain sight. Want a hint about where to look? One word: invoices.
We all know sending invoices is fundamental to getting paid. Yet plenty of folks who work for themselves put off asking for payment when it’s due. That’s too bad – we all deserve to get paid for our work! On the bright side, however, following up on outstanding payments is a relatively quick and painless way to boost your cash flow fast.
Here are some important insights about invoices:
“My invoicing software sends reminders every 15 days. It also adds a late fee, which I generally remove as a courtesy. Although I require payment upon completion, some like to pay on their own terms.” —Bobby Parker, Architectural Illustrator
“I live by the rule "invoice upon completion." When I finish it, I bill it. I let all new clients know that when we finish a project, they can expect the invoice within 24 hours.” —Joe Rozsa, Creative Director
“Sometimes a good old-fashioned phone call is best to get on top of unpaid invoices. We’re all bombarded with so many emails and texts these days, just reaching out by phone can often help move things along. You never know why they're not paying an invoice.” —Leslie Barber, QuickBooks Community Leader USA and Co-founder, NutraBella
For product-based businesses, invoice financing can be a smart way to access cash even when your customers drag their feet. Invoice financing pays you before your customer does and takes a small fee. Then, when your customer shells over their cash, it goes to the financing company.
Hack #4: Slash prices
A sale is a sure-fire way of bringing in new and returning customers, clearing out inventory and boosting revenue. Remember, sales and discounts aren’t just for those of us who sell physical products. You can generate cash with special events, holiday discounts and new service offerings, too.
Here’s some helpful feedback to consider:
“I use social media and my newsletter to offer a sale on the artwork I have on hand in the studio, to both clear physical space and bring in some more cash flow.” —Jason Yoder, Artist
“My primary sales are finished quilts, but I sell my extra fabric as well. When I'm in a pinch, I do a sale on my fabric yardage to increase cash flow.” —Suzanne Griffiths, Creative Director
“I launched custom guitar picks in the spring of 2012 and, although they were slow to take off, they sold really well that Christmas. The picks are just one of the products that I offer, but they account for 70-80% of my income.” — Spencer Pickslay, Woodworker
“I have an All Night Skate on a Friday night in the summer to help bring in extra income if I’m running short.” —Stephanie Rawlins, Roller Skating Rink Owner
“I contact some of my customers just to say hi and it usually triggers them to remember that they need to get flowers for someone.” —Bella Flora CT Florist
“Bottom line, the fastest way to improve cash flow is to SELL!” —Julie Gordon White, Owner of The Well
Launch a sale and boost your revenue with these tips:
Hack #5: Seek cash from outside sources
You’ve cleared out your inventory, hosted a sale, changed your payment terms and switched to 1-ply – but you still need additional dough to hold you over till your next payment.
Business credit cards, small loans, cash advances and funding opportunities are out there. It’s a good idea to carry a small line of credit – even on a personal credit card – for those days when equipment breaks or when a customer doesn’t pay.
Here's how entrepreneurs like you are navigating credit cards, loans and financing:
“We have a no-interest credit card, so in a pinch, we use this and then spread out our payments before any interest accrues. This allows us to free up cash.” —Susan Perry, Florist
“I recommend heading to your local bank if you need a business loan because that local connection is key to building trust. If they know you and see your business in action, they’ll feel more comfortable with your ability to pay off that loan.” —Julie Gordon White, Owner of The Well
“A business credit line is not dangerous if you monitor your cash flow properly. It’s beneficial for some business owners who have outstanding receivables past 30 days.” —Camille Simpkins, Entrepreneur
“Read the fine print before applying to crowdfunding campaigns. Know what the fees are and how much of the money you actually receive if you meet your goal. And if you don't reach your goal, find out if you still get the money that was raised. Just know what you're getting into!” —Alice Fuller, Marketing Consultant
“I sought out organizations that give grants and interest-free loans and applied. I actually got some funding!” —Victoria Beadz, Jewelry Designer
Before heading to a bank, think about your other options for funding:
Before you go
QB Community members, what's ONE expense you plan to cut this month? We can’t wait to hear how you’re managing your expenses in the comments below!
Want more low-down on your money matters? Read these helpful posts:
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Love the real-world advice here! Has anyone tried one of these specific cost-cutting strategies and, if so, how much do you think you've saved?
I agree with @EmilyCowan , some brilliant tips here.
Halke I was wondering because you run a digital marketing agency, are there any expenses you plan to cut? I would love to know more about how you're managing your expenses in the comments below! :)
Hope you're having a great day! :) Welcome to the U.K QB Community!
What's one expense you wish you could cut this month in your village shop? Or... If you were given money to grow your business, how would you spend the money?
Hope you're having a great week! How are things since your posts in Community? Have you made any new decisions going forward?
Also, I would love to know... How do you manage your money? Do you have any tips and tricks to share?