![]() Unsecured Debt: Outstanding sums require a court-ordered judgment or ruling before collection occurs.Insurance Premiums: Letting insurance lapse means taking unnecessary risks.Secured Debt: Any items that you have personally guaranteed should be paid as quickly as possible before running the chance of being repossessed.Key Vendors: If you owe balances on outstanding inventory or services, it’s important to get them paid in a timely fashion to maintain incoming inventory and preserve valuable business relationships.Rent and Utilities: Prompt payment is important to keep the lights on and avoid eviction.Outstanding Payables: Bills over 60 days due can incur significant interest penalties and put both your credit score and future financing capabilities at risk.Payroll: People can be your most important asset and it’s important to keep their paychecks coming, especially as employees can bring more business through the door.Taxes: Payroll taxes, sales taxes and income taxes can be garnished, or business assets seized, if taxes are left unpaid.That said, if you’re still coming up short, it can help to prioritize business expenses payments in the following order, categorized by descending importance: Remember that vendors want you to be successful too, and that means working together to create win-win relationships whatever the future brings.” “Understanding their expectations can help you make smarter financial decisions when things get tight. “I encourage businesses to have open conversations with vendors and credit departments,” says Reinhart. If you’ve been a good customer in the past, some will look to find practical ways to work together to help you navigate your way back. ![]() Should you find yourself coming up short for the month, a good first step is to call to creditors to negotiate a payment plan and make a minimum payment (if possible) in good faith. ![]() Dave Reinhart, CPA, Smoker Smith & Associates PC But tools alone won’t mean much if you don’t know how to successfully use them. In today’s high-tech world, it’s true that you’ve got access to a plethora of online tools, apps and services that can help as a business owner. Some can be deferred, others negotiated, and still more won’t leave any room to budge. If you’re tight on funds, and wondering which business expenses to prioritize, it helps to remember that no two bills are created equal. “An ounce of prevention here can far outweigh a pound of cure,” he says. Above all else, says Reinhart, it’s important to keep an eye on cash flow at all times and take the time to prepare a backup plan in advance, just in case money ever gets tight. In addition, he also advises setting up online bill payment solutions to save time and effort, and using free tools offered by your credit card provider to consolidate expense reporting and tracking of vendor payments. “Investing a little time up front to put one together can help you more effectively manage cash flow and keep an eye on where and when you’re spending.” “The best way for any business to manage expenses is to start by creating a budget,” explains Dave Reinhart, a certified public accountant with Smoker Smith & Associates PC. It’s also crucial to make tackling these tasks a priority, he says. “As ever, the key is being smarter about how you choose to apply these tools, and more strategic when it comes to finding ways to make them work harder for you.”įinding time-saving ways to manage business expenses will only become more important going forward, says Thomas, as market realities (and many businesses’ cash flows) look poised to remain increasingly uncertain in coming years. “Thanks to skyrocketing growth in financial technology (fintech) and online payment solutions, it’s never been easier to manage ,” says David Thomas, executive director of online programming at the University of Denver. ![]() Thankfully, there's a growing number of business expense strategies and technology to help you minimize headaches-and stay one step ahead of bills and creditors. It’s especially important to hone before challenging times such as recessions or periods of ongoing economic upheaval. Learning to effectively manage business expenses is an important skill for any small-business owner.
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