Ah, the mystery of the disappearing deposit. One minute you’re sitting pretty with a solid bank account, and the next bam you’re wondering, “Where did the money go?” If you’ve ever found yourself asking that question, trust me, you’re not alone. Business owners, big and small, face this conundrum every single day. But don’t worry, this doesn’t have to be a guessing game. Tracking your income and expenses in QuickBooks budgeting feature makes it easy to see why your bank account is empty even though your sales are at an all time high.
Spotting the Spending Leaks
First things first, let’s talk about spending leaks. These are the sneaky little expenditures that fly under the radar. Maybe it’s a subscription you forgot to cancel, or an annual renewal your forgot about. Or even those credit card fees that keep rising yet you are not tacking that cost on to your customers. It’s not always the big-ticket items that cause the problem, it’s the small, repetitive costs that accumulate over time. Regularly reviewing your budget versus actual on a weekly basis will help you spot the spending leaks and take action.
Identify Overspending Categories
Next up: overspending. We all have that one area of the business where things tend to get a little… loose. Maybe it’s marketing, supplies, or cost of goods sold.. Whatever the category, overspending is the silent killer of cash flow. When you track your expenses by sub categories in QuickBooks, it lets you quickly identify where things are out of whack. You’ll also be able to see if the overspending is:
- a one time thing or
- is it going to be your new baseline and you need to adjust your budget accordingly?
Get Your Budget in Shape
Creating and sticking to a budget is like having a financial road map for your business. Without it, you’re essentially driving blind. In my book, The STOP Method, I share a couple of ways to set a realistic budget. Once you have that, schedule a recurring weekly budget meeting with yourself to review your numbers. If you’re consistently overshooting your budget in certain areas, it’s time to ask yourself why. Is the spending justified? Can you find a more cost effective alternative? If you’ve never really budgeted before, start small, track a few categories and scale from there. The more awareness you have of where your money is coming and going, the more confident you’ll feel about your saying yes or no to spending.
Use the Right Tools
Tracking business expenses doesn’t have to be a chore, especially with the right tools. A solid accounting system or expense-tracking software can help automate the process and give you real-time insights into your spending. Whether it’s QuickBooks, Xero, or even a good old-fashioned spreadsheet, find what works best for you and stick to it. The best part? These tools make it easy to spot trends, track discrepancies, and even automate invoice and payment reminders. No more manually checking the bank account every morning to see if you can afford things or relying on your memory.
Personally, I love QuickBooks Online. I am not sponsored. I am a QuickBooks ProAdvisor. I have used their budget vs actual tool for thousands of budgets. It is straight data, with nowhere to hide what is going on with your business.
Take Back Control
At the end of the day, being able to answer the “Where did the money go?” question with clarity is a game-changer. Once you have a solid understanding of what you are really spending in your business, you will know why that best ever sales month still leaves you in a cash flow crunch.
Because at the end of the day, cash flow isn’t luck, it’s strategy.
