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Smart expense management strategies for your small business

This Spotlight on Business Credit Cards is brought to you by American Express OPEN, the leading issuer of small-business credit cards and charge cards in the U.S. OPEN offers business owners products and services to help them run and grow their businesses.

Now that the new year is upon us, it’s time to start executing your plans to make your small business better in 2012. Whether it’s being more organized or better predicting your company’s needs, many of the big improvements small-business owners can make for the new year are based around better expense management strategies.

One of the changes that can lead to noticeable improvement by the middle of the year is a close look at your company’s budget. “A detailed comparison of actual versus budgeted results for revenue and for each spending area will lead to greater insights on spending items that may have been overlooked in the budgeting process,” according to Mike Daley of MJD Business Advice.

One time that unexpected budgetary needs may crop up is around the holidays. Daley writes that some businesses may “need more cash available for an increase in inventory to support holiday sales. Based on your sales forecast and receivable collections do you need a line of credit to make the purchase?”

Choosing to get a small-business credit card can supply your business with a line of credit and allow you to get the things you need even if you don’t have the cash at that moment.

However, deciding when to spend and when to save should be part of every small business’s winning expense management strategy. Any purchase that puts you in the red should be a purchase that is aimed at increasing revenue, Lou Dubois¬†writes for Inc.com.

“Hiring new staff, moving to a new and more profitable location or buying equipment upgrades are good reasons to take on considerable debt. But if your business is set up solidly and you begin making purchases solely because you ‘think’ it’s a good idea, you are bound to make it more difficult for the revenue to grow,” Dubois writes.

Services that help you keep your business organized can be a great investment, and having a wide variety of options available means that you can pick your price. Some companies may choose to hire someone to help keep their expense records in order, but “if you’re insisting on doing the work yourself, invest in software,” writes¬†Joyce Rosenberg. “Your accountant can suggest some. Or ask other small business owners about the program that works for them.”