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1. Feature: A Proven Method to Analyze and Cut Expenses (4 min)

2. From the Archive: Should You Be The Registered Agent Of Your LLC?

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3. Dear TCoL: Help Establishing Credit for my New LLC

Have a relaxing Sunday!

-TCoL

Missed our last feature article? Protecting Your Intellectual Property 101
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Most small business owners fall into one of three camps when it comes to expenses. Some feel confident they have costs under control. Others sense expense creep but have not nailed down where it is happening. And then there are the panicked ones, staring at bank balances that don’t square with last quarter’s profits.

Wherever you land, this article offers a proven way to review and cut expenses. It comes from a multi-division, mid-sized business that has operated profitably since the early 1960s without ever having a formal annual budget. That last part is not for everyone, but the process itself has been tested for decades and can work for businesses of all sizes.

September is the perfect time to do it.

Why September Works

This month has a certain rhythm. Family vacations are mostly finished. Kids are back in school. Cooler air makes people more focused. College football is back, and Wall Street is jittery. September has historically been the worst month for stocks, though some years prove kinder than others.

For business owners, September sits at the sweet spot before the year-end rush. The holidays are still far enough away to get things done, but the urgency of fourth quarter goals is building. That makes it an ideal moment to stop, take a hard look at expenses, and set the tone for the final stretch of the year.

Step 1: Print or PDF the General Ledger

Begin with the full general ledger. Not a summary. Not just the P&L. Print or export the entire general ledger to PDF.

This is the raw material of the exercise. It forces you and your decision makers to look beyond categories and see the actual line items. What came in, what went out, and how often.

Getting this in front of your core group is essential. Depending on your size, that group may be just you and an accountant. It could be a CEO, president, controller, or CFO. Keep it tight. The goal is honest, detailed review, not a room full of side debates.

The accountant, controller, or CFO, as the case may be, needs to be thoroughly prepared to lead the meeting attendees through the details.

Step 2: Block Off a Full Day

This process deserves a full day, set aside solely for the group review. Put it on the calendar as early as possible so nothing displaces it.

Why a full day? Because the ledger tells stories that summaries hide. It will spark questions, trigger memories, and reveal decisions made months or years ago that no one has revisited. Working through those takes time. Rushing it defeats the purpose.

Step 3: Set Expectations with the Team

Let your broader management team know what you are doing, even if they are not in the room. Explain that this is an annual expense review, not an audit of individuals. Transparency prevents rumors.

Tell them when it is happening and why. That way, if you call in a department head to explain a recurring cost, it is seen as part of the process, not a surprise interrogation.

Step 4: Meet in Person and Review Everything

Now comes the core of the method. Gather in the office, with all records available, and go line by line.

Ask the basic questions:

• Do we need this expense?

• Does it contribute to revenue or protect it?

• If cut, would the impact be minor, manageable, or severe?

Prioritize cuts that reduce costs without affecting revenue. Then weigh expenses that add only marginal value against the discipline of tightening the budget.

Involve department heads when necessary. They may defend an expense with a solid business case or admit it no longer serves its purpose. Either outcome is valuable.

The end product should be an assignment list with reporting deadlines to resolve the issues, make the cuts, review or terminate problem contracts, inform affected managers and employees, etc.

Step 5: Make It an Annual Event

The first time you run this exercise will be the hardest. You will discover subscriptions no one remembers, service contracts on autopilot, and pet projects that no longer earn their keep. Expect frustration, maybe even some tense conversations.

But once you establish the rhythm, the process gets easier each year. Employees come to expect it. Managers know they will be asked to justify their costs. Over time, this builds a culture of financial discipline without requiring an army of accountants, consultants, or a thick binder of budgets.

Treat it seriously but make it constructive. Order lunch (and dinner if need be). Keep the tone professional but not punitive.

The goal is to shape better expense policies and smarter capital allocation, not to play “gotcha” with the team.

Why This Works

Several reasons make this method effective.

Visibility. The general ledger is comprehensive. It captures the truth of spending habits, not the story people tell themselves.

Accountability. An annual review sets the expectation that every cost must eventually be justified.

Accuracy. An added benefit is that you will spot accounting problems, which will improve financial statement accuracy and consistency.

Team Building. Done right, the exercise is not just financial. It becomes a shared effort that aligns leadership on priorities.

Policy Shaping. Patterns revealed during review inform future decisions, from vendor contracts to travel policies.

The combination of transparency and discipline prevents expense creep, strengthens culture, and improves margins.

What If You Already Have a Budget?

Plenty of businesses run formal budgets. This method does not replace that. It complements it. Budgets are forward-looking. They are plans. The ledger review is backward-looking. It tests whether spending aligned with strategy and whether habits crept in that no plan could have caught.

Even if you have a detailed budget, printing the full ledger once a year and reviewing it with your top decision makers will surface insights you might otherwise miss.

Stop Expense Creep

Expense creep is not a one-time problem. It is a constant. But you can fight it with a simple, repeatable process. September is as good a time as any to start. Print the ledger, block the day, gather the team, and work through it.

Do it once and you will save money. Do it every year and you will build a stronger business.

Dear TCoL: Help Establishing Credit for my New LLC

Question: We recently formed a LLC and I need a few simple ideas to build its business credit. Can you help?

Answer: Here are a few simple and reliable ways to start building your LLC’s credit.

1. Register for a D-U-N-S number. Sign up for a free account with Dun & Bradstreet to receive your D-U-N-S number. This identifier is widely used by lenders and vendors to check a company’s credit profile. When registering, be sure to opt out of all marketing and third-party communications.

2. Debt to Credit. Your bank will likely issue a debit card first. That card does not build credit, but it is fine to use it. Keep your account in good standing for a few months and credit card offers will follow. Take the credit limit offered to get started, use it responsibly, and increases will come over time.

3. Consider American Express. If you already have a personal American Express card in good standing, they often will approve a business account quickly. Many small business owners find their service efficient and supportive.

4. Use trade accounts. Even though they may feel old-fashioned, trade accounts still matter. An invoice you pay by check or bill pay can serve as a trade reference, and many lenders ask for one or two when evaluating business credit.

With these steps, you will begin building credit independent of your own. For more detail, see our prior article on business credit building, “Like You Mean Business: Your LLC’s Credit Blueprint.”

Have an interesting business question and need a free bit of advice? Send your question to [email protected]. No confidential info, please!