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Increasing your profits requires selling more and/or spending less. While building up your sales may require an extended effort, business costs are often very ripe for a quick trimming. Our Memphis area CPA firm recognizes that businesses today face many complex challenges when it comes to maximizing profits. That’s why Rikard & Neal CPAs, PLLC offers Memphis area businesses the expertise of a CPA to help you achieve your business goals and grow your business through Business and Finacial Consulting and Business Accounting Solutions.

Here are some ways you can start getting your business costs under control today:

Supplies and Other Purchases

Usually, in any business, relatively few items represent a very large share of all outlays. The first step in cutting expenses is, therefore, to identify your highest costs. You may be able to trim many of these costs by making sure you always bid out significant purchases or by more actively seeking less expensive alternatives.

For many companies, inventory carrying costs are a very significant expense. Focusing on matching your inventory quantities more closely to your short-term needs could result in significant savings.

Telecommunications and Other Services

The ongoing services you buy may also offer the potential for cost savings. Revisit your choice of telecommunications vendor and your usage.

Look carefully at your costs for financial services. If you borrow or maintain a line of credit, always compare the rates from more than one financing source before you commit. Make sure you are not paying higher-than-necessary fees for your company’s checking and deposit services.

Cash Management

To control cash outlays, take advantage of discounts for early payment whenever possible. And look to delay payments for as long as you can without giving up discounts.

On the receiving side, deposit all receipts daily. And always actively pursue collection of any invoices that are past due. To help control your working capital needs and, therefore, your credit costs, try to match any new liabilities to your anticipated cash flow.

Fixed Expenses

One other category worth examining is fixed expenses that are long-term commitments. While you usually can’t change these quickly, be aware of when a window for change will open and prepare well in advance by considering lower cost alternatives.

To learn more ways to control your business costs give us a call today at our Memphis or Marion accounting firm. Our trained staff of professionals are always available to answer any questions you may have: Memphis- 901-685-9411, Marion- 870-739-8664. Or, learn more about our business accounting services for Memphis businesses and request a free consultation online.

Diligent planning is essential to keeping tax obligations low for all kinds of small businesses. You don’t want to wait until the very end of the year to start planning next year’s tax strategies. Rikard & Neal CPAs, PLLC, a Memphis, TN CPA, is highly experienced in tax planning and compliance for small businesses.

Most ordinary and necessary business expenses are deductible as long as you have the proper documentation. If your return is audited, the IRS may require that you show the type of item purchased and that payment was made. Here are some examples of acceptable documentation.

Checks

A canceled check can be used as proof of payment if it has the name of the payee and shows the cancellation on the back. The IRS also accepts highly legible images of checks if you don’t have your checks returned.

Credit/debit card transactions

You must have an account statement that shows the amount of the charge, the transaction date, and the name of the payee.

Electronic funds transfers

The IRS requires an account statement that shows the amount of the transfer, the date the transfer was posted to the account by the financial institution, and the name of the payee.

Invoices

You must have an invoice or some other form of documentation showing what you purchased. Canceled checks, credit/debit card statements, and records of electronic funds transfers only provide proof of payment.

Cash register receipts

If you receive a receipt with no details of the items purchased, write a description of the items on the slip. As long as the purchase is for a relatively small amount, the IRS should accept it.

If it’s not self-explanatory, make sure you write the business reason for your purchase on the invoice or receipt so you’ll be prepared for any questions from the IRS. And be aware that there are separate substantiation rules for travel, entertainment, and auto expenses.

Whether you need individual or business tax advice, give us a call at 901-685-9411. We’ve got the business tax planning answers you’re looking for, so don’t wait.