You'll Never Control Expenses If Your Team Doesn't Know What Anything Costs

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Now that we’re a couple of weeks into the new year, you may have received the financial results from last year.

You’ve probably tallied up costs on a line-by-line basis, grouping related costs together, and in the process you’ve likely, ultimately, figured out if the last year was profitable. How does it look?

It’s time now to use that historical data and firm up your plan for the upcoming year. This exercise is often called budgeting, or if you’ve included inputs and cost drivers into your spreadsheet, you’ve created a financial model.

However complex you’ve made your spreadsheet, the important thing is that you’ve completed a necessary planning tool for the upcoming year.

Related: 4 Tips for Managing Cash Flow When You're Bootstrapping

A typical list of operating expenses could include:

  • Accounting and legal fees

  • Advertising and promotion

  • Allowance for bad debt

  • Bank account service fees

  • Credit card processing fees

  • Healthcare insurance

  • Interest on debt

  • Office items

  • Property insurance

  • Rent

  • Salaries and wages

  • Software licenses

  • Telecommunications

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