Consumer spending fell for the third consecutive month during July, as customers slashed the amount spent on clothes, cars and foreign travel and rising inflation began to bite. July saw a decline of 0.8%, with households beginning to feel the pinch of rising inflation and economic uncertainty.
This is also effecting businesses, who may need to regulate their own spending in order to maintain a profit in a challenging climate.
With this in mind, regular audits can provide an excellent way of reviewing and controlling your commercial spending.
Here are three ways in which they help:
1. They Highlight Excessive or Inefficient Spending
By regularly reviewing your finances with the help of reputable service providers, you can highlight any examples of excessive or inefficient spending.
This enables you to identify potential issues before they begin to place a significant drain on your finances, while also prompting proactive discussions on the ways in which operational costs can be reduced.
Such an approach could help your company to make incremental savings over time, with this additional capital either being committed to profit or reinvested elsewhere throughout the business.
2. Drive Higher Levels of Investment in Strategic Costs
This brings us on to the distinction between strategic and non-strategic costs, with the former having a direct impact on your businesses bottom line. Including activities such as sales and marketing, these disciplines can deliver a superior ROI and have a greater impact on improving the profitability of your venture.
In order to optimise your marketing spend, you should consider using regular audits to determine how your capital is invested during the course of a financial year. By distinguishing between strategic and non-strategic business costs, you can determine whether or not you are getting the most from your capital and enabling your business to thrive.
This could trigger an end-of-year review, at which point the data used from your latest audit would help to distribute your budget for the coming year.
3. Comply With Tax Legislation
Paying the correct tax and complying with national law is central to any successful business, particularly as regulators can request an audit of your finances at any time. If you are found to be non-compliant or in breach of prevailing laws, you could be sanctioned heavily and forced to pay a significant fine that your business can ill-afford.
With this in mind, why not partner with a reputable firm and complete an internal audit to guarantee the compliance of your financial management?
This will ensure that your finances are in the best possible state at the end of each tax year, and perfectly aligned with real-time tax legislation.