The Importance of Expense Tracking and Management
About this episode
Brian runs a successful electrical business, but he’s struggling to keep up with his expenses. Like many owners, he can see what goes out of the bank each month, but not exactly where it’s going.
In part two of the Brian series, Kerry explains why tracking and categorizing every expense matters, how forgotten subscriptions and unchecked office supply orders quietly drain profit, why an accounts payable system protects your vendor relationships, and how QuickBooks Online and monthly reconciliations give you numbers you can trust.
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Key takeaways from this episode
- Knowing what you spent isn’t enough: you need to know where it went.
- Unused subscriptions turn $100 a month into $1,200 a year.
- Categorizing transactions shows true payroll, cost of goods sold and overhead costs.
- Requiring purchase approvals can save hundreds of dollars a month.
- An accounts payable system helps you pay on time and protect vendor relationships.
- Reconcile your bank accounts monthly and review your P&L regularly.
Show notes
Brian’s challenge
Brian has run his electrical business for five years. He’s dedicated and doing well, but he’s struggling with financial organization, cash flow and planning. This episode focuses on expense tracking and management.
Know where every dollar goes
Seeing that $35,000 went out of the bank isn’t the same as knowing what it was spent on. Software subscriptions you’ve stopped using are a common leak, and $100 a month becomes $1,200 a year that you won’t get back.
Why categorizing matters
Without categorized transactions, you can’t see your true gross payroll, materials, subcontractor or office supply spend. Kerry shares how one client discovered thousands spent on office supplies and saved hundreds a month by requiring purchase approvals.
Tracking vendor bills
Missed payments bring late fees, interest, angry vendors and poor credit references, and make it harder to negotiate discounts. Map out the journey of every vendor bill from arrival to payment so nothing surprises you.
Software, reconciliations and reviews
Spreadsheets are better than nothing, but one formula error can throw everything off. Kerry recommends QuickBooks Online, monthly bank reconciliations and a regular review of your P&L, including asking what return you’re getting on spending like advertising and training.