As we settle into February, the energy of the new year is still fresh. So, it’s the perfect time to get a clear picture of your business finances. One key area to focus on? An expense analysis. Taking a closer look at your expenses can reveal patterns, highlight opportunities for savings, and ensure your money is working as hard as you are.
Let’s dive into what an expense analysis is, how to run an expense report, and an important question to ask yourself as you’re going through your expenses.
What Is An Expense Analysis?
An expense analysis is a deep dive into your business’s spending to evaluate where your money is going and whether it’s being used effectively. And it’s about more than just trimming costs. It’s about understanding whether your expenses are providing value and supporting your goals.
For example, are you spending on software that streamlines your processes and saves you hours each week? Great! That’s worth keeping. On the other hand, if you’re paying for overlapping tools or unused memberships, it’s time to make some changes.
Beyond trimming unnecessary expenses, an expense analysis also helps you realign your finances with your business priorities. Whether you’re saving for a new hire, preparing for tax season, or working toward a more consistent paycheck, it’s important to understand your expenses. Plus, eliminating wasteful spending is an empowering step toward financial confidence.
How to Run An Expense Report
Running an expense report in QuickBooks can provide valuable insights into your spending. First, start by navigating to the “Reports” tab in your QuickBooks dashboard. Then, search for the “Profit and Loss Report” or the “Expenses by Vendor Summary” report.
These reports give you a detailed breakdown of where your money is going and help you identify trends or areas for improvement. Additionally, you can customize the date range to focus on specific time periods (like the last quarter or the previous year) and filter categories for deeper insights. Once generated, review your expenses line by line to identify unnecessary or duplicate charges.
Are You Justifying Unnecessary Expenses?
As you’re going through your expenses, ask yourself: are these costs directly supporting my business goals? Sometimes we hang on to subscriptions or systems we barely use because “we might need them someday.” Or, we assume a service is fairly priced without comparing alternatives. But every dollar saved is a dollar that can be reinvested into your business—or into paying yourself.
How a Profit First VIP Day Can Help
Feeling overwhelmed at the thought of digging into your numbers? You’re not alone! That’s where working with a financial professional, like us at KC Virtual Bookkeeping, can make all the difference. A Profit First VIP Day might be just what you need to take control of your finances. During this intensive session, we’ll work together to create a monthly expense analysis, develop a Profit First rollout plan, and tackle any other financial challenges you’re facing (like pricing strategies or managing personal expenses).
Taking a day to focus on your finances can feel like a big investment of time, but the clarity and direction you’ll gain are worth it. By the end of the day, you’ll walk away with a clearer picture of your financial health, actionable next steps, and a renewed sense of confidence in your ability to manage your money.
So, what are you waiting for? Now is the time to get proactive with your finances. Reach out to schedule your Profit First VIP Day here. Let’s start making your money work smarter for you.
