Using an accounting package, especially an online accounting system, lets you track expenses and supplier bills. The beauty of cloud accounting is that you can track your costs wherever you are.
Every year, set targets and budgets for your business and put in place processes to monitor how much you are spending against each category of cost. Recording your costs in an accounting package is a great way to keep track, particularly if your accounting system will also record your budget.
Manage your suppliers
Managing your suppliers will help manage your costs! Your accounting system will tell you how much you spend each year with every supplier - use this to negotiate a bigger discount. Xero will also let you generate purchase orders for your suppliers, which you can email to them at the touch of a button - this is a great way to ensure you get the goods at the price you want and its easy to check the supplier's invoice is correct when it arrives.
Manage jobs and departments
If you work on different jobs or have different teams in your organisation a good accounting system like Xero will let you track costs in each category - you can then get a better understanding of which parts of your business make you more profit (or cost you too much!)
Look for efficiencies
You'll be used to looking for better ways of doing your day job and trying to make that run as smoothly as possible. But don't forget your administrative processes - we'd all rather avoid paperwork (even accountants!) so look to see how you can streamline this too. Xero will let you generate a professional quote for a customer and Xero will turn it into a sales invoice with a simple click of a mouse - no more recording items twice. If you order goods from a supplier to sell onto a customer, Xero is even better - you can record the order then with a couple of clicks you can record the same information as a purchase invoice and a sales invoice (with your profit mark-up on top), eliminating lots of duplication.
The Institute of Chartered Accountants in England and Wales produces a guide to purchasing which you can get from its Business Advice Service.
Contact us to see how Xero can help your business get control of its costs.