Most business owners have a few expenses they haven't looked at in a long time. A software subscription that renewed quietly. A phone plan set up three years ago. A service you meant to cancel after the slow season.
None of them feel like a big deal on their own. Together, they can add up to hundreds or even thousands of dollars a year that aren't doing much for your business.
November is a good time to fix that. You have most of the year's numbers in front of you, and you still have time to make changes before you set next year's budget. An expense review doesn't have to take all weekend, either. With the right approach, you can do a solid first pass in about an hour.
Start With the Right Report
Pull a Profit and Loss report for January 1 through October 31. If you use QuickBooks Online, run it with the detail view so you can see the individual transactions behind each expense line, not just the totals.
Then pull a list of your recurring charges. Your bank and credit card statements are the most reliable place to find these, because anything that charges you on autopilot will show up there month after month.
One note before you start: this review is only as good as your books. If transactions are miscategorized or months haven't been reconciled, the report won't tell you where your money actually went. If you open your Profit and Loss and something looks off, that's worth knowing too.
Sort Every Expense Into One of Three Groups
Go through your expenses one line at a time and put each one into a group. You don't need a fancy system. A notepad or a spreadsheet with three columns works fine.
Cut it
These are expenses that no longer serve the business. Common examples:
Software you stopped using, or two tools that do the same job
Subscriptions tied to an employee or project that's no longer around
Memberships you joined for a reason that no longer applies
Advertising that hasn't brought in a customer you can point to
A good test: if this charge disappeared tomorrow, would you notice within a month? If the honest answer is no, it probably belongs here.
Keep it
These are expenses that clearly earn their place. They save you time, bring in revenue, keep you compliant or protect the business. Insurance, the tools your team uses every day and the services your customers depend on usually land here.
Keeping an expense doesn't mean you never look at it again. It means it passed this year's review.
Renegotiate it
This is the group most people skip, and it's often where the real savings are. These are expenses you need but may be overpaying for:
Phone, internet and other utilities that haven't been reviewed in years
Insurance policies that haven't been shopped around recently
Software on a monthly plan that would cost less if you paid annually
Vendors and suppliers you buy from regularly who may offer better terms to a steady customer
A short phone call asking "Is this the best rate you can offer?" is one of the easiest ways to save money in a small business. The worst they can say is no.
Look for the Expenses That Grew Quietly
Once your expenses are sorted, compare this year to last year. If you have both years in QuickBooks Online, a Profit and Loss comparison report makes this simple.
You're looking for lines that grew faster than your revenue. Some growth is normal. Prices have gone up on just about everything, and a growing business will spend more. But if an expense jumped 40% while sales grew 10%, it deserves a closer look.
Price increases on subscriptions are the classic example. Many services raise their price at renewal and send the notice in an email that's easy to miss.
Watch for Personal Expenses Mixed In
While you're going line by line, flag anything that isn't actually a business expense. A personal purchase on the business card, a family phone line paid from the business account or a streaming subscription that's really for the house.
These don't just make your expenses look higher than they are. They can also cause problems at tax time, since personal expenses aren't deductible business expenses. Make a list of anything you find so your books can be corrected.
Turn the Review Into Decisions
An expense review only helps if you act on it. Once you have your three groups:
Cancel everything in the "cut" group this week, before another renewal goes through.
Make the calls on your "renegotiate" list. Put them on your calendar if you need to.
Write down what you expect to spend next year on the "keep" group. That becomes the start of your budget.
If you have a bookkeeper, share what you found. They can make sure canceled services stop showing up, personal charges are handled correctly and next year's numbers reflect the changes.
A Free Guide to Walk You Through It
I put together a free guide called Cut It or Keep It? A Business Owner's Expense Review that walks you through this process step by step, so you can sit down and work through it without starting from a blank page.
Grab your free copy of the expense review guide here.
And if you open your Profit and Loss and realize you can't trust what it's telling you, that's exactly what my Diagnostic Review is designed to figure out. It's a professional look at the condition of your books, so you know where things stand before year-end.
