ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Effectively Controlling Your Small Business Expenses

Updated on April 27, 2017

informing potential business owners about the importance of managing cash flow and business accounts must be the top priority of all business programs. The inability to manage businesses expenses and documentation will send a small start-up into a downward spiral. The result could be a financial disaster, perhaps leading to lawsuits and damaged reputation.

If you are thinking about opening a business, you must have the right team in place. Such people as accountants and budget analysts can effectively keep all financial dealings and activities in order. All spending and transactions must be conducted with a legitimate purpose and pinpoint accuracy.

A business is faced with two types of spending: required and optional spending.

Required spending is vital to the operation of the business. Without this type of spending the quality of the business will suffer.

Let’s look at an example, suppose you were opening a photography business in portraiture. You will first need a facility or studio. Other necessary equipment will require:

  • Two high-end professional cameras,
  • Quality Background sets,
  • High quality lens
  • Tripods
  • Lighting equipment


For the photography business, the above items are the essentials of a studio photography business. Other equipment necessary for the smooth operation of most typical small businesses includes:

  • Computer system
  • Fax machine
  • Phone system
  • Fax machine
  • Marketing and research
  • Accounting software
  • Internet/email service
  • Stationery and office supplies
  • Electronic credit card processing
  • Shipping and packaging supplies

Where is the Money Going?

Have You Ever Invested in Unnecessary Business Expenses?

See results

Optional spending involves purchasing items and services which would be good for the company but not necessary for its smooth operation on a basic level. Spending money on unnecessary expenses can enhance your business while, at the same time, causes you to exceed your budget.

Good money management starts in accounting and payroll. If these two entities are not in order, the business is mostly likely headed toward financial disaster.


The purpose of an accountant is to organize and maintain the financial record of a company. However, if a new start-up doesn’t have an accountant, the owner must be knowledgeable enough to keep records to show where the money is going.

Any inaccuracies in spending could result in a confrontation with auditors as well as the IRS. Many companies fail due to indiscriminate spending. Purchasing are made without consideration for the budget.

An accountant’s job is to not allow such to happen. Accountants inform upper management of the financial health of the company and make recommendations per best practices.


Payroll must be handled with accuracy and consistently if a business wants to avoid descending into chaos within and without.


Employees must be paid on a consistent basis. Federal and state taxes must be deducted from payroll checks. If this is not done accurately, not only will a company suffer the wrath of the IRS, but also the anger of the staff.

Taxes must be paid. There is no getting around it. The IRS will zero in on those companies who mismanage their finances and auditors will have a field day in finding and reporting financial inaccuracies.

Preventing Financial Chaos

To prevent the mismanagement of funds in your new business, you must construct a fully formed budget plan and execute it as if it was the law. If you are not determined to make such a commitment, then your business struggles with finances are a guarantee.

Creating a Budget

Nevertheless, developing a budget should start with examining your current spending to determine where the money will be going. There are several things to consider, including overhead expenses such as rent, utilities, supplies, insurance, marketing, training and promotion, maintenance and repair, equipment as well as payroll and repair just to name a few.

Each month an income statement, cashflow statement, and a balance sheet should be generated to monitor spending so that the company can keep its financial status in check. The same thing should be done with each new business you open. These three money management tools will go a long way in helping a new start-up keep a cap on spending without reservation.

Organization in optimal financial health can keep everybody happy within and without. Good money management helps a company operate more efficiently. Being in good financial status will allow a company to branch out and take advantage of other opportunities that will help or enhance the operation of the company.


    0 of 8192 characters used
    Post Comment

    • clippingpaths profile image

      Clipping Path Specialist 

      12 months ago from United Kingdom

      Loved reading your ideas. This article will be helpful for any entrepreneur who are planning to start their photography business. I think starting a new business takes documented planning. It works as a roadmap. However, It’s true when an entrepreneur first go out on his own, handling everything becomes difficult and they need help from the others. In such a case, outsourcing is a great idea. Hiring the right outsourcer may help the entrepreneurs to propel his business further. It frees up their valuable time. When outsourcing, an entrepreneur has more time on developing his business strategies. The article below can add up one more useful idea on top of yours. It talks about how what a photographer can outsource for his business. It’s worth reading.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)