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Tag: Business expenses

  • 10 Best Business Travel and Expense Management Software

    Did you know, as per the report of Emburse Certify, an average US business traveler spends approximately $949 on their business trip including all accommodation, airfare and other business expenses? This means that spending on business travel is an integral part of the business.

    The return on investment in business travel is approximately $2.90 for every dollar spent on travel, so businesses should plan for business travel for their employees. So keeping track of travel expenses is an important aspect to organize everything and run the business efficiently.

    Travel Expense Tracking Software is dedicated to serving you in this regard and helping you to manage your travel expenses. Here we have provided a list of the best travel expense-tracking software so that you do not need to search for software.

    What Is Travel Expense Tracking Software?
    List of Top Travel Expense Tracking Software
    TripActions
    TravelBank
    TravelPerk
    Zoho expense
    Egencia
    Coupa
    SAP Concur
    Expensify
    Chromeriver
    Emburse Certify

    What Is Travel Expense Tracking Software?

    Companies spend heavily on business travel, so in order to keep a track record of every penny spent on travel, businesses use travel expense tracking software. The software is well-equipped with features that help in organizing, monitoring and analyzing travel expenses.

    Businesses of all types can track their expenses and align employee travel with their corporate travel policy to ensure compliance. You get a detailed idea of ​​how much you have spent on which employee and plan appropriately for future travel taking the past travel experience into perspective.

    So without further delay, let’s dive into the list of top travel expense tracking software.

    List of Top Travel Expense Tracking Software

    The followings are the best Travel and Expense Management Software

    TripActions

    Rating 4.7/5
    Best For Traveler Planer for Each Employee

    TripActions is a powerful and robust travel and expense management software that is trusted by more than 8000 companies worldwide. Launched in the year 2015, TripActions is dedicated to providing the best user experience when it comes to managing business trips.

    It’s the only platform you need to manage physical and virtual cards for corporate travel expenses, and hotel and flight bookings with exclusive deals, cashback and rewards. Corporate travel policy plays a vital role in a business, this software provides real-time reports to ensure best-in-class business and policy decisions.

    TripActions

    The next-generation online booking tool of TripActions can save a lot of time in manual booking here and there, it integrates everything in an organized manner, and you can also access it through their mobile app. The enhanced user experience to book tickets and manage expenses in one place is incredible. It also rewards your employee in the form of Amazon Rewards if they save the company money on hotel bookings.

    Features of TripActions

    • Customizable and preset travel policies
    • Robust travel reporting
    • Travel booking and management with ease
    • Physical and virtual corporate cards
    • Expense management in automation
    • Next Generation online booking tool
    • Rewards and cashback while booking
    • 24/7 travel agent support

    Pros:

    • Ease of use
    • Great support
    • Rewards while booking flights and hotels
    • Competitive flight and hotel rates

    Cons:

    • Not connected with all airlines and hotels
    • Android app stucks sometimes
    • Not immediate rebooking when the flight gets cancelled

    Pricing:

    • Contact the sales team for pricing

    TravelBank

    Rating 4.4/5
    Best For Tracking and Expense Management

    Improve the visibility of travel expenses and manage them efficiently with TravelBank. It is an all-in-one solution for managing your expenses, booking, and cards. More than 50,000 companies are already using TravelBank to effectively manage their travel affairs.

    Business travel becomes seamless and hassle-free with features like expense reports, multi-level approval, online booking for lodging and flights, integration, and much more. For early-stage companies and individuals, it offers an expense-free plan in which features like unlimited receipt scans and unlimited expense reports are included for free.

    TravelBank

    The mobile-centric approach of this software provides the best-in-class mobile app to manage everything from the convenience of your smartphone. The advanced UI acts as a cherry on the cake that makes the app easy to use. It also offers a powerful desktop app to use in the office and improve efficiency.

    Features of TravelBank

    • Brex cardholders will get an exclusive of 4x Brex points on travel spend
    • Discounted corporate rates on flights and hotel booking
    • Real-time reporting
    • Customizable travel policy
    • Incentives in the form of rewards
    • Travel tracker duty-of-care dashboard

    Pros:

    • Rewards employees for saving the company’s money
    • Easy-to-use interface
    • Travel budgeting

    Cons:

    • A free trial is not available
    • Confusing reports and expense tab
    • The report scanning tool is not up to the mark

    Pricing

    • Travel: $15 /user/month
    • Expense: $8 /user/month
    • All-in-one: Custom pricing

    TravelPerk

    Rating 4.6/5
    Best For Medium sizes Businesses

    TravelPerk is an all-in-one software solution to track the expenses of business trips along with all the necessary features like booking hotels and flights, reporting, compliance, and much more. Over 5000 companies worldwide are using TravelPerk to manage their business trips and increase their productivity with robust reporting and analytics.

    FlexiPerk is the most unique feature of TravelPerk that empowers you to book flights, hotel, car, and train anytime and you can cancel your booking in a single click, no question asked. You’ll get your refund in a single click. This service is currently available in the US, UK, Switzerland, and EU.

    TravelPerk

    Easy to create and customizable Simple Travel Policy ensures you stay within spending limits. This policy will help travelers to stay within their budget and enable them to manage their travel.

    Features of TravelPerk

    • Group booking facility for 9 or more people
    • Vast Inventory
    • Flexible travel policy
    • Easy VAT recovery
    • GreenPerk feature to offset spending

    Pros:

    • Centralized invoicing
    • Instant set up
    • A free trial is available

    Cons:

    • Comparatively High pricing
    • Don’t have the option to view flights based on your budget
    • Inefficient customer support

    Pricing:

    • Starter: First 5 booking free then 5%/booking
    • Premium: $99/month + 3%/booking
    • Pro: $299/month + 3%/booking
    • Custom: Contact sales for price

    Zoho expense

    Rating 4.5/5
    Best For Automated Expense Reporting

    Zoho is a well-known and trusted Saas provider that offers varieties of cloud-based services to help businesses run their business smoothly and efficiently. Zoho expense is another great software of Zoho that provides travel and expense management features. Trusted by thousands of companies like Zomato, Makemytrip, and PUMA, it is available in more than 150 countries worldwide.

    Zoho Expense

    Empower your employee to add receipts and convert them into expenses seamlessly. You can set up approval for ticket costs and trips to manage your corporate travel more effectively. All the reports are stored in the cloud so that you do need not to worry about any paper in the future.

    Apart from all the basic features of travel management software, you can create a user and assign roles to them. You can also restrict access to employees and set daily, monthly and annual spending limits.

    Features of Zoho expense

    • Corporate card reconciliation
    • Expense report management and automation
    • Mileage tracking
    • Simplified and custom approval
    • Advanced customization option

    Pros:

    • Seamless integration with Zoho suite
    • Mobile app to manage travel on the go
    • Interactive UI
    • Multi-factor authentication and single sign-on

    Cons:

    • The mobile app crash sometime
    • Timely response from support is missing

    Pricing

    • Free trial
    • Standard: Rs 99/user/month
    • Premium: Rs 199/user/month
    • Enterprise: Rs 299/user/month


    Click here to get Zoho

    Egencia

    Rating 4.4/5
    Best For Enterprise and Corporate Business

    Egencia has served more than 9000 companies across 60 countries and was launched in 2002. Having a great experience in the field, Egencia is committed to modernizing travel and expense management. End-to-end corporate travel planning becomes seamless and effortless with the powerful and robust software of Egencia.

    Simplifying the task of corporate travel planning is the priority of Egencia, and ensuring that it provides an easy-to-use user interface for booking, approving travel requests and modifying travel. Your employee’s well-being and safety are a priority, and Egencia Travel Advisor ensures this with travel alerts and advice.

    Egencia

    It optimizes the travel experience of your employees through the program like Egencia top 100 corporate hotels. This program shortlists the hotels that are committed to putting the customer experience first.

    Features of Egencia

    • Travel management consulting
    • Egencia analytics studio
    • Benchmarking dashboard to compare peers
    • Travel policy management tool
    • Geographic risk level indicators

    Pros:

    • Automated reporting
    • Robust mobile app
    • Meeting and event planning experts

    Cons:

    • customer support is average
    • Not intuitive interface
    • A free trial is not available

    Pricing:

    • Request custom price quotes

    Coupa

    Rating 4.1/5
    Best For Procurement Modules

    Coupa launched its end-to-end travel and expense management software in 2022 to help businesses take care of their Corporate travel more efficiently. It is new to the field of corporate planning but has significant experience in providing similar services like contract management, supplier management, invoicing, treasury management, and similar services.

    From planning a business trip to booking flights and hotels to providing traveler support, expense reports and compliance, it caters for everything you want in a travel tracking software.

    Coupa

    Enhanced visibility in expense insights gives you a clear picture of all your travel spending in one place, using this you become capable to gauge your spending. The advanced trip price prediction of the Coupa is capable enough to predict the spending that may occur during a future trip so that you can prepare for it and stay within your budget.

    Features of Coupa

    • Automated expense reporting
    • Intelligent audit algorithm
    • Coupa’s trip price predictions
    • Valuable Insights from Community.ai
    • Smart itineraries

    Pros:

    • AI fraud detection
    • Real-time travel insights
    • IOS and Android mobile app

    Cons:

    • Price is not disclosed
    • Lack of customization
    • Not interactive and modern dashboard

    Pricing:

    • Contact sales

    SAP Concur

    Rating 4/5
    Best For Travel, Expense and Invoice Management

    SAP Concur is another great software to consider for your business travel and expense management. It is declared as a leader in the IDC market scape report for travel and expense management. Through this, you take control of all your spending that happens on a business trip. Duty of care is a legal obligation for every business to ensure the safety of their employees, so this software ensures a safe travel experience and helps you stay compliant with the laws.

    SAP Concur

    A well-drafted travel policy can save a huge chunk of your money by giving clear information on which expense is reimbursable and which is not. SAP Concur will help you to prepare the best travel policy that you can customize at any time.
    Even when you book your ticket through a channel other than SAP Concur, it captures the details and helps you manage each and every expense. It also provides you with consolidated reports of each and every expense in a single dashboard.

    Features of SAP Concur

    • Triplink to capture the booking made outside of SAP Concur
    • Easy travel compliance for employees
    • Employees are empowered to book their ticket
    • Speed up the request and approval process with Concur request
    • ExpenseIT to simplify expense reporting

    Pros:

    • Availability of iOS and Android app
    • Easy reimbursement
    • Slack integration

    Cons:

    • Old and messy interface
    • Price is not disclosed
    • Cumbersome to audit expenses

    Pricing:

    • Contact sales

    Expensify

    Rating 4.4/5
    Best For Expense Tracking

    Expensify is the deserving candidate in our list of top travel tracking software because of its amazing features and huge customer base. Launched in the year 2008, it has served more than 12 million people worldwide. It is one of the companies in the world that has the highest revenue per employee.

    Advanced features like Smart Scan have the ability to scan all receipts, streamlining the approval process and speeding up the reimbursement process. Since everything is in one streamlined process, it can integrate all of your business travel expenses into your favorite accounting software.

    Expensify

    Apart from all the basic features like expense management, bill payments, invoicing and travel management, it also offers the Expensify card which earns you up to 4% rewards on every purchase. 10% of the revenue earned on each Expensify card will be donated to Expensify’s charitable organization known as Expensify.org.

    Features of Expensify

    • Expensify Card
    • Smart scan
    • Notification alert and rebooking of other flights when the flight got cancelled
    • Easy booking through chat with concierge
    • Streamlined travel compliance
    • Corporate card reconciliation
    • Multiple approvers
    • Advanced tax tracking

    Pros:

    • PCI-compliant security
    • Delegated access
    • Reasonable pricing
    • User-friendly mobile app

    Cons:

    • No option to filter the expense list
    • Difficult to add approves
    • Smart scan fails sometimes

    Pricing:

    • Free: $0
    • Collect: $5/user/month
    • Control: $9/user/month

    Chromeriver

    Rating 3.7/5
    Best For Document-related Processes

    Chomeriver is an end-to-end travel and expense management software that mitigates the hassle of managing corporate travel. It helps organizations automate and streamline their document-related processes, such as document creation, review, and approval. The platform also includes features for collaboration, document storage and management, and integration with other business systems and tools.

    Chomeriver

    The ACFE survey estimates that businesses lose 5% of revenue each year due to fraud and out-of-policy spending. Chromeriver automates compliance and expense management to save time and detect such frauds.

    Features of Chromeriver

    • Improved budgeting and forecasting
    • Easy integration with any travel management company
    • Real-time reporting of expenses
    • Prioritized safety and awareness
    • Seamless payment data tracking
    • Availability of reimbursement card

    Pros:

    • Show progress of reimbursement
    • Mileage tracking
    • OCR capability
    • Duty of care compliance

    Cons:

    • Pricing is not disclosed
    • Not wholly dedicated to travel management
    • Difficult to navigate UI

    Pricing:

    • Contact the support team for pricing

    Emburse Certify

    Rating 4.5/5
    Best For Quick Approvals and Expense Reports

    Emburse Certify is a software solution that makes travel and expense management, report and analytics, and reimbursement easy and efficient. Having a user base of more than 12 million and a presence in more than 120 countries, this software is trusted and offers all the necessary features to track travel expenses.

    Empower your employee to travel without the headache of thinking much about trip planning because this software handles everything from start to end with full flexibility. You’ll find the best corporate rates for travel booking for flights, rail, hotel, and car rental.

    Emburse Certify

    Contact the support team anytime via chat, phone, or email and get your query solved immediately. With Certify, your employees are always in the compliance area of your corporate policy. You have full flexibility to modify the policy at any time and change will reflect in real-time.

    Features of Emburse Certify

    • Data autofill and report scanning
    • Automated policy enforcement
    • Full reporting suite with analytics
    • Multiple user roles
    • Control of approval routing‌‌

    Pros:

    • Available in 140+ currencies
    • Credit card integration
    • IOS and Android mobile app

    Cons:

    • A free trial is not available
    • A lot of back and forth creates inconvenience

    Pricing:

    • Certify now: $12 /user/month
    • Professional and Enterprise: Contact support

    Conclusion

    From planning a corporate trip to completing the entire trip, everything needs to be reported perfectly without missing anything. The above list of software helps in everything from travel booking to managing expenses easily, so choose the best one from the list and save a lot of time and resources in tracking travel expenses.

    FAQs

    What is Travel and Expense management software?

    Travel and expense management or tracking software allows and provides users with a platform for planning, purchasing, and recording travel expenses. It also ensures employee work-related travel adheres to company policy.

    How do you manage travel expenses?

    Avoiding business class is one best practice that goes without saying, but here are some other ways you can reduce your air travel expenses:

    • Book tickets in advance
    • Don’t stick to one favourite booking website
    • Partnering with airlines
    • Reduce costs by scheduling meetings well
    • Use Travel Expense Management software for tracking expenses

    How to choose the best  Travel Expense Tracking Software?

    You should consider several factors before choosing the best travel expense tracking software for your business such as whether your employee is traveling more on roads or they travel more by air, for this make a list of priorities and features that you need in your software.

    What are the best Travel Expense Tracking Software?

    The following are the best travel and expense management software

    • TripActions
    • TravelBank
    • TravelPerk
    • Zoho expense
    • Zoho expense
    • Coupa
    • SAP Concur
    • Expensify
    • Chromeriver
    • Emburse Certify

  • How to Avoid Bankruptcy While Running a Startup

    Millions of people these days are trying to establish their startups despite having a simultaneous regular job only to make sure that their total gross income is enhanced. A startup of any magnitude is a great independent source, of increasing your income, and if you can establish the business well, you can also take it up as full-time work and ensure that your source of income through the startup is stabilized.

    According to a survey, 90% of startups fail. The basis of any startup is the capital investment, and if you are trying to establish a business, there would be a certain amount of loan that you would have to get. The startup usually has a higher risk of falling victim to bankruptcy. There are different types of loan policies, and then there is a chance of loss at the startup, and hence the chance of bankruptcy also increases.

    Main reasons for business failure among startups worldwide in 2021
    Main reasons for business failure among startups worldwide in 2021

    In this article, we will talk about the steps that can be taken to avoid the bankruptcy of a startup. So, let’s take a look at it.

    Managing the Expenses
    Careful Planning of the Month
    Secondary Income Source Till the Business is Stabilized
    Cutting Out the Optional Expenses
    Debt Settlement Lawyer

    Managing the Expenses

    You may wonder what you can do to make sure that the profit is high while all kinds of expenditures are well managed. There are different types of expenses associated, and when you have a thorough understanding of these, you can easily plan your expenses well.

    Here, we are going to guide you regarding budget management for any kind of startup as well as how to ensure that you can avoid bankruptcy no matter how many loans you have to worry about. There are many aspects of the expenses associated with the startup and when you have a clear conception of them planning the budget for your company becomes easier. The chances of failure of your startup lessen. You would also be able to take the help of the finance department for better planning too.

    An Expense Management Software
    An Expense Management Software

    Expense Management Software is another option that helps businesses, big or small, keep track of their expenses. They let businesses manage their spending, prepare budgets, manage various expense-related reports and do much more seamlessly which helps save much time.

    Careful Planning of the Month

    You may have different requirements every month, but when you have a proper plan about the expenses you would incur and stick to it, it becomes easier to understand how much you save as well as control the expenses as well. Plan the next month’s schedules and the possible expenses ahead of time and then try and follow the schedule to ensure that you are getting the best possible output from your company at the minimum expense.

    This way, you would be able to keep track of every expenditure within the startup as well as have proper control over them. This is essential to make sure that your business can maximize the profit and hence paying off the loans would become much easier.

    Secondary Income Source Till the Business is Stabilized

    If you have a regular job or any other source of income apart from the startup, then do not let them go unless your startup is stabilized and is fetching home a good turnover. This would ensure that you have some other option to manage the debts when your startup fails and you are suffering loss.

    If you do not have a secondary income source, you can as well look for it so that there is an alternative to handle your finance when there is any loss at the startup. Any of the family members too can join a regular job and together, you can pull the income and ensure that you have enough money to ensure complete security on the financial front despite paying for the debts.

    Cutting Out the Optional Expenses

    When you are trying to find out the different types of expenses that your startup has, you will discover several expenses that can be avoided or can be substituted with a cheaper alternative. Make sure that you are cutting them out and saving money.

    It may seem less, but over time the amount that you have saved from such minor sources would be the reason why you can pay off your debt easily, and this is elemental to make sure the startup does not go bankrupt. This is a significant risk that people in business are afraid of and this is why many are apprehensive about establishing a business of any kind at all. The risk factors are often considered too high and simply not worth it.

    Debt Settlement Lawyer

    A Digital Banking and Lending Platform
    A Digital Banking and Lending Platform 

    Every startup and seasoned business needs a debt settlement lawyer for any relevant legal advice. You can hire a lawyer permanently, and he or she would be able to handle all your debt troubles for you.

    The lawyer will help you with paperwork, and make the loan process quick and easy. They can help you get loans at a lower interest rate.

    Conclusion

    The failure rate of Startups is very high. Only a few remain in operation after a year or later as they have to shut down mainly due to bankruptcy. Proper management of expenses, settling debts, having secondary income sources, cutting out the extra expenditures, and hiring a professional lawyer can help you avoid bankruptcy.

    FAQs

    What can I do to avoid bankruptcy?

    You can avoid bankruptcy of your company by:

    • Cutting excessive spending
    • Managed and planned Expenditure
    • Earning more profits
    • Settling debts
    • Using professional help

    Do bankruptcies hurt your credit score?

    Yes, your credit score can be hampered by bankruptcy as it will remain in the credit reports. This might change the way the lenders see you and it might result in them being unwilling to loan you.

    What are the three most common causes of bankruptcy?

    Running out of cash, not having a market need and getting outcompeted are the three most common causes of bankruptcy.

  • 13 Common Mistakes That Startup Founders Make in Their Business

    ‘Money can solve anything’- this is the first thought that comes to the mind of most of the startup founders. The startup founders live in the biggest myth of life that, once they have funds for the business, their startup will automatically run. This is the biggest lie and one of the common mistakes that startup founders make and that has ruined many great startup plans. The seed funding is the first step in the path of a successful startup, but never assume it as a final destination, because the road is very long after this. Launching a new startup is like a raising baby. After the launch of the startup, comes the biggest responsibility. You need to plan the whole life of your baby and provide everything to them. So just like it, after getting the initial investment, planning and using it properly to boost the startup is important

    When you are beginning with your startups, with all your excitement and passion, the only thing that you want to concentrate on is how to become successful. You do every possible thing to achieve your dreams but being an entrepreneur is not an easy job. One needs to burn their midnight oil for that. While being an entrepreneur, there are mistakes one can make which may disrupt the process of reaching the top.

    Numerous startup founders fail to manage it after the seeding step, as they had utilized their all energy in getting the funding. The startups usually fail because they fail to deliver their promises and fail to manage their team. These are the two major reasons behind the downfall of many startups. However, they are not only mistakes made by the startup founders, there are many other common mistakes that startup founders make in the bucket. I have rounded up a few mistakes that you need to avoid at any cost to be successful. In this article, we will talk about the Common mistakes that Startup Founders make in their businesses.

    Overthinking and Underthinking
    Wrong Investments
    Poor Planning
    Incorrect Estimations
    Decision Making
    Hiring
    Being Organised
    Avoiding Suggestions
    Neglecting Budget
    Marketing
    Confusion
    Forgetting About Bookkeeping
    Unwanted Expenses

    Overthinking and Underthinking

    Thoughts should be big and the start should be small. Overthinking in terms of business may affect the revenue and process of work, plus it doesn’t help you in reaching a conclusion or solution to your problem. Instead, it leads to the creation of problems that are not even there in reality. Decisions should not be risky and should be taken after thinking and evaluating the entire situation properly but too much overthinking can lead to a missed opportunity.

    On the other hand, underthinking any situation is also one of the main causes that may affect the business. One needs to dwell deeper, when there is a need, rational thinking is needed so that effective leadership can be formed.

    “Take time to deliberate, but when the time for action comes, stop thinking and go in” – Napoléon Bonaparte

    Wrong Investments

    In terms of startups and new entrepreneurs, investment is quite a big concern. Be aware of your expenses and savings. Higher Investments in a product without assuming the demand may damage the economy. Investments should be made after analysing the demand for the product.

    Poor Planning

    Everything needs a plan, especially when you are starting a new business, planning becomes mandatory. The plan will guide you through every stage, it is like the GPS that will take you to your ultimate destination. However, wrong planning can create havoc in your dream business. Rough ideas for saving money should not be encouraged, it can cost you your dreams. Pre-planning for saving money should be made keeping the situation in mind be aware of your target audience and concentrate on making products and services according to them.

    Incorrect Estimations

    Estimations of cost should be appropriate. Underestimating the order for developing the business may lead to loss of money and affect the financial state of the company. Thoughts should be appropriate to the situations which include time, surroundings and environment of the market. Always estimate the value higher than that of the original price to keep any sudden expenses in check.

    Decision Making

    While taking decisions entrepreneurs should take care of the situations they face. One wrong decision can lead to the death of your dream startup. The decision should not be risky and made at the right time. Taking risky decisions at the beginning stage should be avoided in order for better growth.

    Hiring

    The hiring of the staff should be less during the initial stages. A huge number of staffs in the starting point with less amount of work will cause a crisis at the time of salaries. Hiring a fulltime staff when a part-time can do the job perfectly is unnecessary.

    “It’s expensive to hire the wrong people. If they leave it’s expensive. If they stay it’s expensive.”― Nathan Mellor

    Being Organised

    Avoid being unorganized. You have to follow a procedure in order to make your startup work. Have your plan and goals sorted in your mind. Jot down on paper your list of priorities in order to stick to the plan. Maintain an organised format for all you want to accomplish. When you begin with a startup, a number of things happen at a time, so listing them according to your priority and then finishing them is the best you could do.

    Avoiding Suggestions

    Don’t avoid suggestions and decisions that people give. Learning from the experts always helps to avoid some loops in the field of A particular business. a person with experience can definitely be of your help if you decide to listen to them. The words of the peers should be paid heed to.

    Neglecting Budget

    Maintaining the budget should not be neglected. Planning on the budget in order to avoid spending extravagantly is required. The budget should be maintained for growth and development. Budget planning should be made locally so that it helps us to maintain the economic growth of the business. High budget tenders should not be encouraged.

    Marketing

    Marketing of the business should not be neglected, it is one of the most important factors for the survival of your startup. It should be clear and sharp so that it reaches the target audience. Marketing at the starting stage should not be very elaborate as these marketing conditions affect growth. A proper marketing strategy has to be made so that your business can be visible in front of your customer and they can get attracted to it.

    Confusion

    Avoid confusion in assigning work while maintaining the budget. Confusion may lead to stress which in turn affects progress. Confusion should be avoided in terms of marketing too. It should be straight so that people can get convinced easily. Creating confusion will only be haphazard for the business.

    Forgetting About Bookkeeping

    To utilize the money properly and keep it from wastage, make the required documents and accounting records perfectly. To avoid the common mistakes that startup founders make these points to be noted. Bookkeeping is a major part of a successful business. You need to record all the expenses and incomes accounts to tally the growth of the business. You need to record all the petty and big cash expenses daily.

    Unwanted Expenses

    You do many unwanted expenses in the daily course, which can be easily avoided or can be minimized. So identify those expenses and reduce them to a minimum level. Don’t spend money on the decor of your office to attract customers, as they are here for the product. Don’t hire unwanted employees like receptionists, if you are capable of handling your own business calls and making your own coffee.

    Conclusion

    Startup founders make many mistakes after getting the seeding. While building a business, mistakes need to be avoided. Although mistakes are a part of our life and they are inevitable, it is important to avoid these mistakes that will do nothing but lead to problems in your business. Even when you make mistakes, learn from them and try to not repeat them.

    FAQs

    What causes startups to fail?

    Most startups fail due to insufficient financial resources.

    What percentage of startups fail?

    90% of startups fail in the first 5 years of the company in India.

  • Break-even Analysis: Advantages & Disadvantages | How to do Break-even Analysis?

    When setting up a new business, one of by far the most significant concepts you’ll learn is break-even analysis, which is the amount of revenue you’ll need to cover your expenditure. Even businesses with large sales revenues can lose money if their costs aren’t covered. While break even analysis is more commonly associated with firms that sell tangible goods, it can also be used to assist establish the price of services.

    Break-even analysis is an important financial statistic for every entrepreneur or small business owner to understand since it shows you exactly what you need to accomplish to recoup your initial investment. It’s a great tool to have when you’re beginning a new business because it allows you to see if your strategy is working. It also supplies you with data that you may utilise to develop your cost structure.

    Lets know about the steps to do break-even analysis and its advantages and disadvantages.

    Break-even Analysis – Importance
    How to do Break-even Analysis?
    Break-even Analysis – Advantages
    Break-even Analysis – Disadvantages
    Conclusion
    FAQs

    break-even analysis meaning

    Break-even Analysis – Importance

    The point at which total revenue and total cost are equal is known as the break-even point. Break-even analysis calculates the number of units or revenue required to cover your company’s entire costs. You are neither losing or gaining money at the break-even point, but all of your business’s expenses will have been paid. The sales earned by your company after striking even are pure profit. Simply put, break-even analysis helps you figure out when your business – or a new product or service – will start making money, and it’s also used by investors to figure out when they’ll recoup their investment and start making money.

    When developing a new product, it’s a good idea to run a break-even analysis, especially if it’s a high-cost endeavour. Finally, whenever you make a change to your business – such as introducing a new sales channel or switching your distribution plan – your costs can drastically change, so a break-even study is always a smart idea.

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    How to do Break-even Analysis?

    How to do break-even analysis?
    How to do break-even analysis?

    Use the following formula to compute the break-even point in units:

    Break-Even point (units) = Fixed Costs (Sales price per unit – Variable costs per unit)

    In dollars using the formula: Fixed Costs/Contribution Margin = Break-Even Point (sales dollars)

    You’ll need some information before you start your break-even analysis. Assume you’re conducting research for a potential new product. Make a list of all your expenditures and expenses related to that product, including premises, resources and supply costs, tool or equipment costs, and costs for paying personnel to make the product and prepare it for shipping.

    You’ll also need to be aware of two other details first, the price range you’re considering, which starts at $0.00 and second, start with none and work your way up to the maximum quantity you think you’ll be able to sell.

    The steps to determining break-even are as follows:

    Step 1. Calculate variable unit costs: Calculate the variable costs of making one unit of this product. The costs connected with creating the product or purchasing it wholesale are known as variable costs. If you’re manufacturing a product, you’ll need to know how much all of the elements are going to cost. If you’re printing books, for example, your variable unit costs are the cost of paper, binding, and glue for one book, as well as the cost of putting one book together.

    Step 2. Evaluate fixed expenses: Fixed costs are costs that must be met in order for your business to continue to operate, even if no items are produced. Add up the costs of running your factory for a month to determine fixed costs. Rent or mortgage, utilities, security, non-production employee pay, and any other costs would be included. Don’t forget about the costs of designing the product and packaging, creating a prototype, and possibly patenting your invention.

    Step 3. Establish a unit selling price for your goods: Set a unit selling price for your product. As you determine your break-even threshold, this price may fluctuate.

    Step 4. Determine the number of units sold and the price per unit: As the product’s total sales and unit price fluctuate, the break-even point will shift.

    Step 5. Make a spreadsheet: To perform a break-even analysis, you’ll need to create or utilise a spreadsheet, which you’ll then convert into a graph. The sheet will draw break-even points for each number of sales and product cost, as well as a graph displaying break-even points for each of these costs and volume of sales.

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    Break-even Analysis – Advantages

    1. Break-even analysis provides you with a far more solid foundation on which to offer your products. Analyze your current financial condition to determine how patient you can be in order to reach your break-even point.

    2. Break-even analysis is generally a significant component of business strategies when it comes to obtaining capital. You’ll probably need to undertake a break-even analysis if you want to secure finance for your business or start-up. Furthermore, a modest break-even point will likely make you more comfortable with the idea of taking on further debt or funding.

    3. Some company concepts aren’t meant to be pursued in the first place. Break-even analysis can help you reduce risk by eliminating unprofitable projects or business units.

    4. A break-even analysis can also be a useful tool for establishing realistic target sales for your crew. It’s always easier to settle on revenue targets if you have a specific amount and a timetable in mind.

    Break-even Analysis – Disadvantages

    1. Break-even analysis is most useful for businesses with only one price point. Break-even analysis may be too simplistic for your purposes if you have many products with numerous pricing. Furthermore, keep in mind that costs can fluctuate, so your break-even threshold may need to be re-evaluated and altered in the future.

    2. However a break-even analysis can tell you when you’ll break even, it can’t tell you how probable it is to happen. Furthermore, demand is volatile, so even if you believe there is a huge untapped market, your break-even threshold may be much higher than you anticipated.

    3. Another drawback of a break-even analysis is that opponents aren’t taken into account. New entries to the market may have an impact on demand for your items or force you to adjust your prices, affecting your break-even point.

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    Conclusion

    A break-even analysis isn’t created in a bubble, of course. If you’re introducing a new product that no one has ever seen before, you have no idea how big the market will be or when competitors will appear. But it does provide a starting point for your quest for the “best” pricing for your purchase. Overall, knowing the advantages and disadvantages of Break-even analysis, it’s ideal to combine a break-even analysis with other profitability measures like net profit margin to get the most accurate picture of your company’s financial health.

    FAQs

    What is break-even analysis?

    The break-even analysis lets you determine what you need to sell, monthly or annually, to cover your costs of doing business.

    Is break-even analysis good or bad?

    Break-even analysis is beneficial because it reduces the danger of going out of business due to a financial shortage. Because cash flow problems are the leading cause of business failure, knowing that there would be no negative cash flow makes the investment more safer.

    What will cause the break-even point to decrease?

    The break-even point can be reduced by increasing the average contribution margin earned on each sale.

    Is it better to have a higher or lower break-even point?

    A low breakeven point indicates that the company will begin to profit sooner, whereas a high breakeven point indicates that more products or services must be sold to reach that point.

    How do you calculate break-even points?

    Break-Even point (units) = Fixed Costs (Sales price per unit – Variable costs per unit)

    In dollars using the formula: Fixed Costs/Contribution Margin = Break-Even Point (sales dollars)