As a business owner, sometimes it may feel like you are on top of the world riding the most exciting wave. And other times, it feels like you are treading water just to keep from sinking into the depths of the rough, unpredictable entrepreneurial sea.
But throughout this bumpy ride of emotions and decision making, smart business owners spend a nice chunk of time assessing business practices, finances and expenses and constantly finding ways to reevaluate spending and maximize profits. Those activities are paramount when working toward maintaining a growing business.
So while you are navigating the waters, keep sight of the incoming and outgoing cash flow to ensure your dollars are working for you. If you notice money flowing in a direction you don’t like, consider these seven, not-so-obvious problems that may be causing you to lose money. And if your business has fallen victim, rectify with these easy fixes.
1. Too Many Meetings
According to one study, 60 percent of executives complained about time wasted in meetings, and 74 percent doubted their meetings were effective. These unnecessary, unproductive meetings can be a huge time suck on everything from actual productivity down to morale and individuals’ feeling of worth and contribution.
Solution: To replace or shorten some meetings, change the flow of communication. For example, instead of meeting to discuss an upcoming project, first distribute information through cloud services that allow employees to share files and folders online. Allow for online collaboration. Then, host a meeting once the initial point of contact is made and individuals have had a chance to digest the information.
2. The Cost of Filing
Did you know that storing paper documents is expensive? The space cost of one standard filing cabinet is over $70 per year, but that’s just the tip of the iceberg.
Solution: Keep documents organized and backed up online for more efficient document storage and retrieval. Use a cloud service for remote access. For a backup to the backup, consider using external hard drives, which take up much less physical space and can be secured in fireproof boxes or stored offsite.
3. Too Much Paper
The average office worker uses over 10,000 sheets of paper per year, equaling about $80 per employee. Plus, there are additional costs throughout a paper’s lifecycle, which includes:
Solution: Instead of using paper, convert to online documents for billing, invoices, expense reporting, memos and more. Use cloud systems that integrate with other systems so there is a paperless and seamless flow of information from one system to the other.
4. Expense Report Inaccuracies
Keeping track of receipts and preparing expense reports by hand is time-consuming and frustrating. This tedious system results in a processing cost of about $29 for a typical expense report. No one likes manual data entry.
Solution: Automate this process. Use an automated expense report system that allows employees to snap photos of receipts for automatic storage and data organization. Some systems will automatically parse the data, which eliminates the manual side of the process and saves the time it takes to digitally sort through the data.
5. Disorganization in the Office
The average executive wastes 6 weeks per year searching for important documents. For an employee earning $60,000, that’s a cost of $6,290 for the company each year.
Solution: Keep documents organized online. Go digital and use a naming structure that makes sense (include tags if you want to get fancy). With this process, simple searches will result in finding the information you need in mere seconds.
6. Security Breaches
In 2014, the average cost of a data breach was around $640,000, up 23 percent from the previous year. That is partially due to the long recovery time, which often takes about 31 days at a cost of $20,000 per day. The prediction is that this will only increase as you store more data in more places and don’t pay special attention to the storage process.
Solution: When finding a cloud service or file storing service, be sure to only use programs that encrypt your data. This encryption will keep your online business information secure.
7. Tax Mistakes
About 40 percent of small businesses acquire an average of $845 per year in IRS penalties . Yikes! Accuracy on your returns is extremely important, but can sometimes be challenging for small business owners who wear many hats.
Solution: Scan and store. Keep all of your tax-related information online and organized. Use cloud-based accounting solutions and collaboration and sorting software that speaks to your other programs so there is a seamless integration. When tax time rolls around, you can find and send accurate data with just a few clicks.
Don’t let these little problems fly under the radar. Fix them now to avoid bigger losses in the long run.