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Running a business is really tough, especially when you don’t have control over your money, which is slipping through the cracks.
One minute you’re focused on growing, and the next you’re wondering why your expenses are happening faster than your sales. It’s frustrating. Overwhelming. Sometimes, even a little embarrassing, too, like, “how did that tool I forgot about just charge me $12,00 again?”.
Yes, we know, no one starts a business to obsess over bills and spreadsheets. But ignoring them isn’t a solution either. You just can’t afford to. You need to reduce and track business expenses. That’s where the real trouble begins. And trust us, managing your business expenses doesn’t have to be stressful.
Give it a little time and do some digging with the right mindset; you can surely clean up the clutter, stop the leaks, and make space for the things that actually matter to you, like growth, creativity, and peace of mind.
Start with a clear expense audit
If you haven’t checked your expenses in the last 3-6 months, chances are you’re that you’re losing money without realizing it. Most small businesses waste 10-20% of their budget on things they don’t need, extra software licenses, old subscriptions, or cloud tools no one touches. Over 10% of IT budgets go to unused software, and nearly 1 in 5 companies waste 20% or more of their cloud spend.
It happens quietly.
That’s why you need an expense audit. Not to start slashing budgets, but to see where the money’s going, who’s spending it, and whether it’s still worth it.
Pull your bank or accounting reports, and sort every expense into three buckets:
- Essential (like payroll and rent),
- Negotiable (like extra tools), and
- Waste (stuff no one uses anymore).
You’ll be surprised what ends up in the waste pile. No blame here. Just clarity. So you can cut what’s not working and keep what matters.
Build spending categories that actually make sense
Your next move should be organizing your spending in a way that it makes it easier to manage and optimize. Most accounting tools offer default categories, but they’re often too broad or too messy.
Your categories can be marketing and ads, payroll and contractors, tools and subscriptions, vendor and partner services, or office and admin. Any other category depends on your industry.
Stick to setting clear and flexible budgets
Okay, so now that you’ve audited your expenses and sorted them into neat, meaningful categories, you can now move on to the budgeting part. But let’s be real, most budgets either sit in a spreadsheet collecting digital dust or are so rigid they break the moment reality hits.
Budgets are there to keep your spending from going off a cliff, not to punish you for swerving a little.
Set monthly or quarterly limits for each major category, and don’t overthink precision initially. You’ll fine-tune things as you go.
Reduce recurring expenses without sacrificing quality
Recurring revenue feels like a dream but recurring expenses can be draining. Those old SaaS tools that no one uses, forgotten subscriptions, or vendor contracts that haven’t been reviewed in ages, they add up fast. Gartner estimates that 30% of software spend goes to waste, money that could fuel hiring or growth.
But cutting costs should not mean canceling everything. Start with a quick check: who’s actually using what? If only 8 out of 30 seats are active, that’s a red flag. Switch to annual billing for tools you trust (can save up to 40%), and don’t be shy about renegotiating with long-term vendors. Don’t pay for fixed-rate plans if you are not using those tools to their fullest potential.
It’s crucial to remember that cheap tools that slow your team down aren’t saving you money, they’re costing you more.
Automate tracking to stay consistent
If you think you can reduce and track businesses expenses manually, think again. You may start off strong, planning to log every spend… then a few receipts go missing, someone forgets to upload an invoice, and boom, there’s a whopping $2,000 charge that you can’t explain. That’s why you need automation. It saves time and also helps keep things consistent. The key is linking your bank accounts, cards, and invoicing tools so everything flows in automatically. Set up rules to tag expenses, automate small approvals, and review things every couple of weeks to stay in control.
Track your cash flow (like your business depends on it, because it does)
Revenue is exciting. Profit feels good. But cash flow is what keeps your business running.
It tells you if you can pay your team, invest in growth, or handle a surprise expense. Yet, most businesses ignore it, and 82% fail because of poor cash flow management.
The trick? Track it weekly, not monthly. Know when money’s coming in, when it’s going out, and keep a small buffer. Even 2-3 months of breathing room can make all the difference.
With Forwardly, you can streamline your cash flow tracking with real-time visibility into it and be aware of cash running low, or if a big payment is due. No surprises, no scrambling.
Get the whole team involved
Managing expenses shouldn’t fall on just one person because it’s a team effort. When only finance or the founder tracks spending, things slip through the cracks: duplicate tools, surprise renewals, or teams using different platforms for the same job. The fix is simple: get everyone involved. You need to set clear rules for everyone on what’s okay to spend, what needs approval, and who gives the green light. Keep it short and easy to follow.
Give teams some control with prepaid cards or spending limits so they can move fast without overspending. They don’t need to be finance experts, but if they understand how small savings add up, they’ll start making smarter choices. And if someone finds a way to cut costs or flag waste, celebrate it! When people feel like the company’s money is their own, they spend it wisely.
Track performance, not just spend
Saving money is great, but spending smart is what really drives growth. You could cancel tools, cut ad spend, or push vendors for better deals, but if it slows your team down or hurts sales, it’s not really a win. Every rupee you spend should earn you something back, more time, more revenue, or better results. That’s why tracking ROI matters.
Track your expense-to-revenue ratio (aim for 60-80%), check how much it costs to win a customer, and measure how efficiently you turn spend into output. If you’re a startup, watch your burn rate to know how long your runway lasts. A quick monthly review of what you spent and what it delivered can go a long way. The goal isn’t to be cheap, it’s to get the most out of every penny.
Take control before costs take over
Keeping your business financially healthy isn’t about cutting corners, it’s about paying attention. When you clean up your expenses, track business cash flow, and spend with intention, everything runs smoother. Less waste. More growth.
Ready to take control of your business spend?
Forwardly helps you track every dollar that’s going in or out and stay one step ahead, without the spreadsheets.
Start managing smarter with Forwardly today.
