Are you working with your bookkeeping team and Quickbooks Online efficiently to save money?
Are you a business owner struggling to manage your finances efficiently? Do you want to optimize your business expenses, but don’t know where to start? Working with an experienced Bookkeeping Firm and utilizing QuickBooks Online can help you to take the 6 simple steps needed to save your business real money and achieve your financial goals.
Firstly, let’s understand the role of an outsourced bookkeeper. A bookkeeper is a financial expert who helps you manage your finances, including tracking your income and expenses, reconciling accounts, and creating financial reports. By hiring an outsourced bookkeeper, you can save time, reduce errors, and gain valuable insights into your financial performance.
Now, let’s dive into how to work with your outsourced bookkeeper and QuickBooks Online to review and optimize your business expenses.
Step 1: Set up your expense categories in QuickBooks Online
The first step in optimizing your expenses is to categorize them appropriately. QuickBooks Online provides default expense categories, but you can also create custom categories based on your specific business needs. For example, if you run a restaurant, you might have categories like food and beverage costs, labor costs, rent and utilities, and marketing expenses.
Your bookkeeper can help you set up these categories in QuickBooks Online, ensuring that all expenses are tracked and recorded correctly. By categorizing your expenses, you can identify where you are spending the most and find areas where you can cut costs.
Step 2: Connect your bank and credit card accounts
To make the most of QuickBooks Online, you should connect your bank and credit card accounts to the platform. This will ensure that your transactions are automatically imported into the system, saving you time and reducing the chance of errors. Your bookkeeper can help you set up this connection and ensure that all transactions are recorded correctly.
Step 3: Review your expenses regularly
Once your expenses are categorized and your accounts are connected, it’s time to start reviewing your expenses. Your bookkeeper can help you generate reports in QuickBooks Online that show your expenses by category, vendor, or time period. More than this, they can also spend time with you to help you understand what the numbers are saying.
Step 4: Identify areas for optimization
Now that you have reviewed your expenses, it’s time to identify areas where you can optimize your expenses. For example, you might be able to find a cheaper supplier for your inventory or negotiate a better rate with your landlord.
Your bookkeeper can help you identify these opportunities by analyzing your financial reports and providing insights into your financial performance. They can also help you create a budget and set goals for reducing expenses in certain categories.
Step 5: Utilize QuickBooks Online’s automation features
QuickBooks Online has several automation features that can help you manage your expenses more efficiently. For example, you can set up recurring expenses to automatically enter into QuickBooks Online each month, saving you time and reducing the chance of errors. You can also use the mobile app to snap a photo of your receipts and upload them directly to QuickBooks Online, which can save you time and reduce the risk of lost receipts.
Your bookkeeper can help you set up these automation features and ensure that all transactions are recorded correctly, and monitor them over time to ensure they continue to do so.
By automating your expense management process, you can focus on growing your business and leave the financial management to your bookkeeper and QuickBooks Online.
Step 6: Monitor your progress
Finally, it’s important to monitor your progress and ensure that you are meeting your financial goals. Your bookkeeper can help you generate financial reports that show your performance over time, such as your income statement, balance sheet, and cash flow statement.
By reviewing these reports regularly, you can track your progress towards your financial goals and make adjustments as needed. For example, if you find that you are not meeting your expense reduction goals, you might need to re-evaluate your strategy or set new goals.
Real-life examples
Case Study 1: Retail store
A small retail store was struggling to manage their finances efficiently. They were overspending on inventory and had a high rent expense, which was eating into their profits. They hired an outsourced bookkeeper and started using QuickBooks Online to manage their finances.
We helped the store owner set up expense categories and connect their bank and credit card accounts to QuickBooks Online. They generated reports that showed the store’s expenses by category, and identified areas where they could cut costs.
The bookkeeper suggested that the store owner analyze their inventory turnover ratio and identify slow-moving items that were tying up their cash flow. The store owner set a goal to reduce their inventory levels and implemented a plan to sell slow-moving items. In addition, we were able to identify high margin add-on items that weren’t being suggested to customers by the sales staff.
By working together, the store was able to optimize their expenses and increase their profits, as well as increase their average sale per client.
Case Study 2: Restaurant
A mid-sized restaurant was struggling to manage their finances efficiently. They were overspending on food and beverage costs and had a high labor expense compared to their aimed.
We worked with the restaurant owner to review their expense categories, identify and track all vendors, and ensure that connected bank accounts and credit cards were feeding into QuickBooks Online.
We were then able to generate reports that showed the restaurant’s expenses by category, and identified areas where they could cut costs, or renegotiate with key suppliers based on increased volumes.
We also suggested that the restaurant owner analyze their menu pricing and identify items with low profitability. The restaurant owner set a goal to increase profitability by adjusting their menu pricing and reducing their food and beverage costs, and to add one-off specials based on their perishable food inventory to reduce wastage.
By working with their bookkeeper and utilizing QuickBooks Online, the restaurant was able to optimize their expenses and increase their profitability.
Case Study 3: Professional Services Company
A professional services consulting company was seeing their profits reduce over time as the business grew. While working with us we undertook a focused expense optimization exercise.
We spent time with their client analyzing their expenses and vendors, generated reports that showed the restaurant’s expenses by category and vendor, and identified areas where they could cut costs. In particular, we reviewed monthly on-going subscription costs and identified a number of unused services, tools and subscriptions that were either unknown to the client, thought to have been canceled, or were valid but not delivering value. We worked with the client to both cancel un-needed subscriptions, and in some cases to approach their vendors to request refunds.
By working together we were able to add thousands of dollars to the client’s bottom line, without any reduction in service.
Conclusion
In conclusion, working with an experienced outsourced bookkeeping firm such as Estmere, and utilizing QuickBooks Online, can help you optimize your business expenses and achieve your financial goals. By setting up expense categories, tracking your vendors, connecting your bank and credit card accounts, reviewing your expenses regularly, identifying areas for optimization, utilizing QuickBooks Online’s automation features, and monitoring your progress, you can take control of your finances and grow your business. With real-life examples, we hope this article has inspired you to work with your bookkeeper and utilize QuickBooks Online to optimize your expenses.
Finally, it’s important to note that QuickBooks Online is not a replacement for sound financial management practices. You should still keep track of your receipts, invoices, and other financial documents. However, using QuickBooks Online can help you streamline your expense management process, saving you time and reducing the chance of errors.
