When starting out in business, it is very easy to spend money on items you do not really need, from stationery supplies to major expenses such as office rental. Even more established business owners can be guilty of overspending on non-essentials.

Why spend money unnecessarily, however, when you could use it more productively in your business by paying utility bills, bringing on necessary resources or buying valuable software?

Here are 5 simple ways to cut costs and keep tight control of your finances – see the difference they make at the end of each month when you print out that profit and loss report:

1.    Go digital

Rather than waste money on printing and postage costs, invoice your clients using email or free invoicing software.

Not only will you spend less, but being environmentally friendly can be very satisfying in itself. Sending invoices online is quicker and easier than printing and posting, and by invoicing after each job has been completed, there will be a steady flow of cash coming into the business throughout the month.

For businesses requiring a signature on contracts and other documents, companies such as EchoSign provide a cost-effective way to send, track and store the signed documents. Onerous administration is completed quickly, without even having to download any software, as it all takes place online.

A paperless office is truly a possibility these days, which is good news for you as it reduces storage space and saves money.

2.    Use an Internet-based phone service

Keep call costs low by using an Internet-based telephone service such as Skype or Grasshopper. For larger companies, look in to VOIP solutions through your local telephone providers.  National and international calls are either free or very cheap, and contacts can be easily imported using Microsoft Outlook, Facebook, or your own address book.

These types of phone services have become very popular with entrepreneurs and small business owners trying to cut costs.  It is possible to speak to customers, suppliers and prospects for a fraction of the price of landline calls.

3.    Be social marketing savvy

If you have not yet realised the potential of social network marketing, it offers an inexpensive way to showcase your business to a global audience. Social media networks including Facebook, Twitter, Google+ and LinkedIn are a rich source of potential leads that you can tap into from the comfort of your home office.

Save time and money on networking lunches and events by launching a social media marketing campaign that can be monitored for success, and adjusted as you go along.

The list of social media marketing benefits is long, but as basic membership of most sites is free, what better way to get the word out about your business?

4.    Outsourcing

If writing is too time-consuming or just not your thing, outsource it to a professional and you will reap dividends in terms of freeing up your time.

Although it may seem like an unnecessary expense, time saved can be used to review strategic plans, undergo valuable training, or simply get your marketing plans underway. Websites such as People Per Hour and Elance link small business owners and entrepreneurs with professional freelancers looking for work, and have become very popular in recent years.

Working in this way enables you to budget effectively, and outsource onerous tasks as and when you are financially able.

5.     Review Your Numbers

It’s hard to win the game if you don’t keep score.  Set a budget for expenses and then review your actual expenditure monthly.  Are you on budget, under budget or over budget?  It’s surprising how quickly little expenses can add up.  This routine also helps you identify wrongful charges by suppliers or missed delivery of goods.

Your accountant can also help you make sense of the numbers and maximize profitability.

Only by keeping an eye on business expenses and cutting costs wherever possible can you improve your chances of success. Gain a competitive edge and outshine the opposition by streamlining your business processes, setting up simple systems for marketing, invoicing and credit control, and your profit figure might just surprise you in the best possible way.

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