Death by 1,000 Cuts. Sounds awful doesn’t it? Something only to be found in horror movies. Until outlawed in 1905, Slow Slicing (a.k.a. Death by 1,000 Cuts) was a form of torture and execution in China.
Unfortunately it still persists today. In your business. Profit Death by 1,000 Cuts happens every day to entrepreneurs and small business owners.
There’s a good chance it’s happening to you, in your business, right now.
Is This Villain Stealing Your Profits?
Meet The Serial Profit Killer. He convinces you not to worry about understanding and tracking expenses, slowly eating away at your profits.
The Serial Profit Killer is sneaky. He doesn’t say to just ignore all expenses. You’re smart, you’d recognize that for a bad idea right away. There are a million little ways he convinces you to ignore expenses – too small, can’t control it, and many more. Unfortunately when you add up all those small pieces you have a really BIG problem.
Do agree with any of the following statements?
- That’s such a small expense, I don’t need to worry about it
- I put most of my receipts in a box, eventually I’ll get to them.
- My business makes money, so expenses aren’t a worry for me.
- I don’t have much overhead, so don’t need to spend time on this.
- I have more important things to spend my time on than recording expenses.
- I need to focus on things that make money.
You are a victim of Profit Death by 1,000 Cuts.
How Much Does this Profit Villain Steal?
Consider if you ignore just one $5 expense per week.
- $5 per week for 50 weeks = $250 per year
- Assume a 35% tax rate. Since you haven’t declared it as an expense, Uncle Sam assumes it was profit and taxes it. Now you’re out #337.50.
- Because they’re “so small” you probably ignore a few expenses each week. If you ignore just five $5 expenses per week you’re costing yourself $1,687.50 every year.
Fear not! I’ve got an easy tool for you to plug this leak fast.
Put this Villain in Jail NOW
I use Shoeboxed.com. It’s simple, fast, and budget friendly.
Here’s why I love it:
- There’s a smartphone app that allows you to scan in a physical receipt immediately. Their software pulls the relevant information directly from the image (sometimes it seems like magic).
- You can forward email receipts and Shoeboxed.com will extract the relevant information for you.
- You also have the option to mail them your physical receipts and they will scan them in. Information is extracted and input into their system.
- You can get ALL your expenses recorded without spending a lot of money or a bunch of your time.
- Syncs with Quickbooks, Xero, Evernote, Wave Accounting, and creates reports viewable in Excel.
- Your accountant will also love it. When I showed it to my CPA a few years ago he immediately signed himself up.
They have a free plan (yes I did say free). I use the Lite Plan which only costs $9.95 a month and easily handles all my monthly expenses.
It’s so simple you can start using it right now and see the bottom line benefits immediately. They’re currently running a promo to save 10% if referred by a customer. Click here to get started now.
Learn How to Jail ALL Your Villains
This isn’t the only Profit Villain. This isn’t even the only way the Serial Profit Killer gets you. In my proven program, 30 Days to Profitable Pricing, I help you identify and jail ALL the villains. And that’s just an added bonus! Schedule a free, 30 minute consultation with me to learn if your business is a fit for this program. There’s no obligation, and I can guarantee we’ll laugh at least a few times during our talk.
What have you got to lose, besides a few profit thieves?
This is part of series by an amazing group of bloggers. There’s a whole lineup this month of tools used and loved by the Word Carnival gang – all for under $10. No magic bullets. Just solid ways to help you manage and grow your business. Check ‘em out here.
I totally confirm that this is an issue.
However, I *hate* gathering receipts. I have a bookkeeper tackle this for me instead at the end of the year, because every expense gets documented and tracked straight from my business card. I sometimes even go into my online banking and leave notes about what it was and why it was an expense.
The accountant then figures out from the bookkeeper’s notes what was going on and why, and what counts and what doesn’t.
It’s all very handy, but sometimes I see the appeal of having an app I can just control myself instead. However – my lesson learned in 2010 was that if I touch my finances more than I need to, things go very badly, so now I don’t, but I do know what to look for in an expert ( and I’m not it ).
Anyway, this is a great suggestion and I highly, highly agree. You gotta be tracking somehow.
The first couple of times I heard you talk about this app, I was like, “I gotta get that.” So TODAY, I’m taking action. I SO need this. Thanks for the awesome reminder about how important the little things are. (And as a marketing lesson: remember people often need to hear about your thing 7 to 10 times before they take action!)
I keep hearing about Shoeboxed, Nicole, and it sounds awesome, particularly now you can use an app. Wave Accounting has something similar, though I’m not sure what kind of reporting you get from it.
I’m with Nick, I have an online accounting that pulls in all my expenses from a single card, but I’m shit at keeping receipts. Do I need both? If I do, then I’m getting this wee tool.
Also, I’ve been thinking about that 5 buck drain and plan to revisit all my ‘tools’ to make sure they’re all necessary! Thanks for the reminder Nicole!
Ah Nicole, you just pushed such a pain point. Behind me as as I write is a filing tray overflowing with receipts. Every time I look at it, it makes me wince.
I have heard of Shoebox, so now based on your trusted advice, I will investigate. Death to piles of receipts!
Totally on board. Reviewing expenses is something I do obsessively. There are few things I hate as much as giving people my money when I don’t have to! We have the standard questions:
1. What the heck is this, anyway?
2. Do I really need it?
3. Can I get it cheaper?
Of course this wasn’t always the case and I cringe to think of it, but yeah. Always be challenging those little flyaway dollars!
Nicole, your little poignant “$5 expense” scenario is scarier than the blood on that axe!
My ex is a C.P.A. So needless to say, I had years of being roped into helping out during tax season (no financial compensation,mind you). The number of clients who walked through that door with a shoebox overflowing with receipts blew me away. What a royal nightmare! Want to guess who was assigned that laborious, unrewarding, ridiculous task? 🙁
Everything starts with mindset, doesn’t it? You have a very special knack for making small biz finances fun. I honestly haven’t bumped into anyone else online who possesses such talent. xoxo
Nicole I swear I love this, I already started my sign up process..the numbers whisperer is such a great name for you. I agree completely those little expenses can add up and I am probably really guilty. I love the way you say this will pull information from email, that is so up my alley. Can’t wait to find some time to work on it…THANK YOU!
Well, after I got over being disturbed at the thought of people actually doing that to someone (yikes!) this was really interesting! I don’t buy a lot of “stuff” for my business, but can see it might be really handy for my personal expenses. Thanks for sharing!
Ugh I am so bad with receipts! Yaritza also raves about Shoeboxed and is always on my *** about keeping track of my receipts. Just the other day I signed up for Wave Accounting and they have a similar app for receipts. I want to test it out to see how it compares to Shoeboxed. Let’s see if I get better about this.
Thanks for the reminder as always Nicole! 🙂
I’ll have to check out Shoeboxed! I just started working with a bookkeeper and she’s been very tolerant of my hacked-together Google Docs and Evernote system (and hey, some system sic better than nothing, right?), but I’m sure she’d appreciate something more streamlined.