Can Good Accounting Solve the High Gas Price problem?

The short answer is NO. No amount of accounting is going to make the prices lower at the pump. (Surprised you, huh? I bet you thought I was going to wax poetic about some underused tax deduction.) But Good Accounting can help you save money on expenses (and taxes) including your fuel expenses.

I always ask Small Business Owners if they know how much money they made last month. Usually, 90% will raise their hands. Then I ask if they know how much they spent last month. Only 10% will leave their hands raised. Lastly I will ask if they know how much they spent on Utilities, Payroll, Supplies, etc…..and I am usually left with no hands.

I have yet to meet a successful Business Owner who doesn’t count his/her money every month.

(An elemental part of accounting is actually assigning expenses to …well….accounts. The rest of the world would consider these categories, but accounting is based on the allocating of monies to specific categories: Expense accounts, Sales accounts, Equity accounts, etc….)

So when a Business Owner looks over their accounts, they can see exactly what they are spending on each category. And if it turns out that 40% of expenses are going to Supplies, perhaps some changes can be made. The same is true of other expense categories like Rents, Licenses, Dues and Subscriptions, Repairs, Advertising, and yes, Fuel.

If a Small Business Owner feels the need to tighten up their spending, it would be difficult to make any strategic decisions without a good accounting. (That’s one reason why I like my job — it’s recession proof!)

So if rising fuel costs are hurting your bottom line, do some accounting and see if any funds can be reallocated from other expenses. A process like this is the epitome of Small Business Ownership. Isn’t it great?