Vita's Tip in 10: A Simple Way to Reduce Your Expenses

Hello, hello, friend! Welcome to a new episode of Vita’s Tip In Ten. Today’s tip is going to be short, sweet, and super easy to implement. It doesn’t get any better than that! 

And this quick and easy tip has to do with your monthly business expenses – specifically, those recurring charges on your credit card or bank statement that you or your staff become so accustomed to, that they just become a quick click, categorized and done, moving on with the rest of your financial review. 

And I know this topic has been brought up many times, by many people, usually at the end of or the beginning of the year, when you are doing a review of your yearly subscriptions. 

But something happened to me this month, that is making me relook at this topic.  And I thought that if it happened to me, it might happen to you, too. 

At Vitalia Inc, we have dubbed Friday’s “Financial Fridays”, and as part of our process, my GM downloads the credit card statement and goes through every line item to either assign them to a customer account as part of COGS, or adds a description to the general expense. 

For us, this is a great practice – and really, it’s an essential practice for every business. It’s important for keeping the P&L up to date, which should also be reviewed regularly, so you can evaluate project profitability or remember for example that that certain uber charge is from the time you went to Nashville and took a trip to a colleagues hotel to do breakfast together. 

But the challenge we have experienced with this practice, is that when it comes to recurring expenses, my GM doesn’t always know if an expense is necessary, or if it needs to be re-evaluated. She sees a familiar charge, for a familiar amount, categorizes it, then moves right along. 

An example of recurring charges could be a subscription service or software. For example, for us this includes our Microsoft 365 subscription, our Airtable project management tool, and MailChimp, which we use to send our email newsletters. Which, by the way, if you don’t yet get my awesome newsletters, twice a month, be sure to visit my website and to join today. You’ll get a free copy of my window treatment idea book, plus my email subscribers are always the first to hear of any big announcements and exciting offers. 

Anyway, these are regularly occurring, approved expenses. You probably have something similar, whether you use Google Suite for file management, or Asana for project management, or any other subscription services or software. 

And if someone besides you manages the expense review and categorization, like my GM does for Vitalia Inc, they too will see a familiar charge and mark it as approved and categorized. 

This is why it is vital for you, as the CEO, to also review these statements and charges. Because unlike your employee, you have the ability – and the responsibility – to look at these charges with a critical eye and question the validity or necessity of these charges. 

This is especially important when business slows down, and you need to justify these recurring charges, evaluating an expense to decide if it is a service or subscription that you are using and is necessary to your operations. 

On the flip side, if the expense is necessary, are you still paying monthly? Is there an annual subscription available? If so, you could save a ton of money by paying annually rather than monthly – sometimes up to 20-30%. 

If you have listened for a while, and if you know me, then you know I am very attentive to my financials and business expenses. I review our statements monthly, even though my GM reviews each line item from the credit card statement. 

So imagine my surprise, and complete and utter disappointment (in myself), when I realized that two subscription services, Zapier and Squarespace, that are essential to my business, that we have used for years, have been on a monthly payment plan rather than an annual plan. And given that the annual subscriptions are about 30% cheaper than the monthly payment plans, I was beating myself up for having overlooked these expenses and all that unnecessary spending over the years. 

But after having my pity party and feeling very upset with myself, I finally took a step back and gave myself grace, which is what I would want you to do for yourself, too. 

As CEO’s, we have so much on our minds, so many balls in the air, so many things to keep track of. So many expenses and calculations to determine profitability.  Sometimes it’s easy to fall down a rabbit hole of Quickbooks, when you are tracking orders and charges, and discovering perhaps that a vendor charged you more for an item, or investigating why certain shipping was higher than expected. It becomes a situation of “not seeing the forest for the trees” and it becomes easy to overlook simple things like recurring expenses because you get so caught up with the bigger, more complicated calculations. As LuAnn would say, that’s a lot of math! 

And it’s easy for these simple charges to fall by the wayside, whether you run a $300k business with 10 credit card line items, or a $700k business with 20 line items. When was the last time you critically evaluated your subscriptions and recurring expenses? Perhaps, like me, you’ve become so accustomed to them, that you haven’t stopped to consider whether you could save money with an annual plan, or maybe a less expensive package would serve your needs. 

And for my friends and listeners with $1M+ businesses, when you are looking at credit card statements with 30-40 weekly credit card expenses, well, I know it’s only too easy to accept the charges as necessary and move on to the bigger, more complicated financial analysis. 

So my friend, whether your revenue is under $500k or well above $1M, my tip for you today is this: 

If you aren’t already reviewing your expenses yourself, as the CEO, you must start now. Pick a day, whether you like Financial Friday like us, or Money Monday, or any other day of the week, and make it a weekly task to review your expenses, especially those recurring charges. 

And if you are already reviewing your expenses, and you tend to prioritize those big calculations and profitability analysis, I encourage you to take some time to consider the easy stuff, especially your monthly subscriptions, to evaluate those charges to decide if they are necessary. And if they are, can you save money with an annual plan? 

Like me, you might be surprised by what you find. And rather than beat yourself up about it, I want you to give yourself grace, make the updates, and include it as a regular part of your process to review the simple stuff too. 

And that’s today’s quick and easy Tip in 10! Thank you so much for listening today! I really hope you’ll take some time to put it to work for your business – and be sure to let me know what expenses you were able to eliminate or reduce.  

As always, I would LOVE to hear your feedback!  Email info@luannnigara.com and tell us, how are you feeling? What tips have you tried? Have they helped you overcome a particular challenge? Do you have question or problem you need help with?  And in the meantime,I’ll be looking forward to bringing you a new episode of Vita’s Tip in Ten next Thursday. See you next time!