There's a good chance that your business is leaking money needlessly. Some of your expenses may not be serving your business effectively, and with a bit of effort, you can channel that money into more profitable areas. In this guide, I'll walk you through the process I use to audit my video production business finances. This practice has the potential to save you thousands of dollars per year and help you reinvest wisely.

Why Auditing Your Business Expenses is Essential

Regularly analyzing your business expenses gives you a clear picture of where your money is going. More importantly, it helps you make informed decisions about which costs to cut, keep, or increase. The goal is not just to reduce waste but to optimize spending so that every dollar contributes to your business growth.

If you haven't conducted a financial audit before, you may be surprised at the savings and opportunities you uncover.

Step 1: Run a Profit and Loss Report

Start by opening your accounting software—whether it’s Xero, QuickBooks, or another tool. Run a profit and loss (P&L) report for the most recent financial year and compare it to the past three to four years. This historical comparison allows you to spot trends and identify areas where spending has increased or decreased unexpectedly.

Examine each line item critically and ask yourself:

• Is this expense necessary?

• Does it contribute to revenue generation?

• Are there cheaper alternatives that provide the same value?

• Should I be investing more in this area?

By questioning each cost, you can eliminate unnecessary expenses and optimize spending on areas that drive growth.

Step 2: Identify Unnecessary or Outdated Expenses

Subscription Services & Software

Recurring expenses like software subscriptions can add up over time. Many businesses continue paying for tools they no longer use or could downgrade to a lower-cost plan.

• Review all your software subscriptions.

• Determine if you still use each tool regularly.

• Check if alternative tools offer the same functionality at a lower price.

• Explore pausing subscriptions when not in use.

Banking and Credit Card Fees

Transaction fees can silently drain your profits. If you pay for software or services overseas, you may be incurring foreign transaction fees.

• Consider switching to a credit card that does not charge foreign transaction fees.

• Pay off your credit card in full each month to avoid high-interest payments.

Insurance Costs

Many businesses overpay for insurance due to annual premium increases (often called a "loyalty tax").

• Contact your broker or insurer to see if you’re getting the best rate.

• Compare quotes from multiple providers.

• Adjust coverage based on your current business needs.

Step 3: Look for Hidden Cost Savings

Production Costs

As a video production company, equipment and production-related costs can be significant. While investing in high-quality gear is essential, it’s important to evaluate:

• Whether you actually need new gear or can rent it instead.

• The return on investment for high-cost equipment purchases.

• Opportunities to repurpose existing gear for multiple projects.

Office and Studio Rent

If you rent an office or studio space, consider whether it's still serving your needs.

• Would a co-working space be a better option?

• Is your studio generating enough business to justify its cost?

• Could you operate fully remotely to eliminate rent expenses altogether?

Travel and Transportation

Parking and travel costs can accumulate quickly. If your team regularly commutes to client locations:

• Compare the cost of Uber/taxis vs. parking fees.

• Explore whether virtual meetings can replace some in-person meetings.

• Check if public transport is a viable option for some shoots.

Step 4: Reallocate Savings to Growth Areas

Reducing costs is only half the equation—reinvesting wisely is what fuels business growth. Consider shifting some of your savings into:

• Marketing & Advertising: Running paid ads or content marketing to attract more clients.

• Coaching & Education: Enhancing your skills or refining your business strategy.

• Hiring & Outsourcing: Bringing on a part-time editor or assistant to free up your time.

Step 5: Make Expense Audits a Regular Habit

Optimizing your business expenses should be an ongoing process, not just a one-time task.

• Set a reminder to audit expenses every quarter.

• Keep a running list of potential cost-saving opportunities.

• Make financial decisions based on data and analysis, not emotions.

By maintaining this habit, you ensure that your business remains financially healthy and continuously optimized for success.

Conclusion

Taking the time to audit your expenses can significantly impact your bottom line. You’ll eliminate wasteful spending, free up funds for growth initiatives, and gain a better understanding of your business finances.

If you’ve never done this before, I highly encourage you to give it a try. Open up your accounting program, run a P&L report, and go through each expense line by line. You might be surprised at the insights you uncover.

I’d love to hear about your experience with auditing your business expenses. Feel free to reach out and share what savings or optimizations you discovered!

For more business growth strategies tailored for video production professionals, visit RyanSpanger.com.