As we kick off 2025, it's time to align our business goals with our spending. Remember when we all canceled cable to save money but ended up with ten streaming services? Yeah, subscriptions can add up, both personally and professionally!
In today’s episode, reformed corporate CFO and founder of Kickstart Accounting, Inc., Danielle Hayden, tackles a sneaky area of your budget: business subscriptions. They may seem small, but they can snowball into big costs, and possibly outgrow their usefulness. With this 5-step plan, let’s audit those expenses and make sure every dollar spent supports your goals.
Key Takeaways:
- Start with Intention: Set your 2025 intentions before diving in. Clarity on your goals is essential before evaluating expenses!
- Step 1 - Audit Your Subscriptions:
- Pull all recurring expenses using your accounting software. Include monthly, quarterly, and annual subscriptions.
- Organize your data: list vendors, costs, functions, and usage frequency.
- Step 2 - Evaluate by Asking the Big Questions:
- Does this subscription align with your 2025 focus?
- Does it provide ROI, i.e. saving time, generating leads, or improving efficiency?
- Is it still suitable for your current business stage?
- Step 3 - Decision Time:
- Cut: If it no longer serves your goals or offers ROI.
- Keep: If it’s essential, but review it mid-year for relevance.
- Optimize: Train your team, use advanced features, and ensure maximum value.
- Step 4 - Present Your Findings: Share what you found with an accountability partner, whether it be your board, team, or bookkeeper.
- Step 5 - Conduct Regular Reviews: Schedule quarterly reviews to ensure your subscriptions are still aligned with your business goals and driving growth.
Pro Tip: Budgets aren’t about restrictions; they’re about spending intentionally. Create a plan that aligns expenses with your revenue and goals.
Topics Discussed:
Audit Your Subscriptions (00:01:22 – 00:06:35)
Evaluate by Asking the Big Questions (00:06:35 – 00:14:35)
Decide to Cut, Keep, or Optimize (00:14:35 – 00:16:37)
Regular Reviews and Presenting Findings (00:16:37 – 00:17:06)
Budgeting Pro Tip (00:17:30 – 00:17:55)
5-Step Subscription Audit Plan Summary (00:17:55 – 00:18:54)
Resources:
Episode 203 | Ditch New Year’s Resolutions and Build Habits for Sustainable Business Growth
Book a Call with Kickstart Accounting, Inc.:
https://kickstartaccountinginc.com/book
Connect with Kickstart Accounting, Inc.:
Instagram | https://www.instagram.com/Kickstartaccounting
YouTube | https://www.youtube.com/@businessbythebooks
Facebook | https://www.facebook.com/kickstartaccountinginc
Episode Transcript
00;00;00;00 - 00;00;27;09
Danielle Hayden
Welcome back to Business by the Books. I'm your host, Danielle Hayden, reformed corporate CFO and founder of Kickstart Accounting, Inc. As we kick off a new year, many of us are revisiting our goals and really tightening our focus on what we want from our lives and our business for 2025. Today, we're going to be diving into a critical, yet often completely overlooked business expense.
00;00;27;11 - 00;00;53;27
Danielle Hayden
It is our business subscriptions, you guys. Subscriptions are everywhere. You know, a few years ago, when we were all canceling cable to save money, and now we actually have small subscriptions to every different software and membership out there. And this happens both personally and professionally. Although I encourage you to do this both in your personal life and your business life,
00;00;54;00 - 00;01;22;21
Danielle Hayden
today we're going to be focusing on business subscriptions. Now, often these are things that we consider as justified and they're necessary for business, but are they actually aligning to our goals for this year? So whether your goal this year is to increase profits in your business or to scale your revenue, this episode is for you. Now let's break it all down and you're going to have clear action steps to move forward.
00;01;22;28 - 00;01;55;05
Danielle Hayden
Let's take a step back. Our step one is to start with our annual goals. We kicked off this year talking about setting goals and intentions for 2025. Go back a listen to episode 203, where we completely ditch New Year's Resolutions and instead set our intention for this year. So if you have already listened to that episode and you are clear on your intentions for this year, you can start to move to the next step of this analysis.
00;01;55;08 - 00;02;20;26
Danielle Hayden
I do not want you to go any further into looking at your business subscriptions until you know what your intentions are for this year. Having that clarity is going to help you evaluate every subscription against its contribution to your business's intention for that year. Don't look at these subscriptions without knowing where you are going. All right, now let's get to business.
00;02;20;27 - 00;02;46;27
Danielle Hayden
We are going to audit our subscription. This is where we have a complete reality check. Subscriptions can feel small; $20 here, $50 there, $100 there. But when you add them up over a year, they can be significant. So here's what you're going to do. You're going to pull a report of all expenses using your accounting software. Now here's the best part,
00;02;46;27 - 00;03;15;13
Danielle Hayden
if you are a Kickstart Accounting, Inc. client, in your February financial statement, you are going to receive a list of all your reoccurring subscriptions for both marketing and operations in your business. So you will receive a list of your subscriptions in your business. From there, you can complete this audit. If you are not a Kickstart client, then you will need to go and pull out all of your reoccurring expenses.
00;03;15;16 - 00;03;44;04
Danielle Hayden
Reoccurring doesn't mean just monthly or quarterly. They are annual as well. So you want to see everywhere you paid for a software in 2024. This is the benefit of having Kickstart’s chart of accounts. And I encourage all of you, whether you're a Kickstart client or not, to really think about how you have your transactions classified. You want to have your transactions grouped in a way that's going to help you with future analysis.
00;03;44;06 - 00;04;06;16
Danielle Hayden
I'm telling you guys, when we created the Kickstart Chart of Accounts Framework nine years ago, it really set the tone for every other piece of analysis that we're able to do as a firm. So you need to have that in your business no matter what. You need to have things grouped together so that you can do analysis like this easily.
00;04;06;18 - 00;04;33;10
Danielle Hayden
So again, we want our marketing subscription costs grouped under advertising and marketing costs. We want our operating subscriptions grouped under operating expenses. From there we can pull that report directly out of QuickBooks. Now I want you to look at both the vendor who you are spending money with and then the cost of it and the renewal frequency. From there, we're going to use that list in Excel, and you're going to add a few additional columns.
00;04;33;12 - 00;04;58;08
Danielle Hayden
The next column outside of cost, you are going to list the function that this software serves in your business. And then in your next column I want you to compare it to your usage. Are you using the software weekly? Monthly? Quarterly? Or has it honestly been sitting idle? Like, you guys, nobody is really going to see this other than maybe your bookkeeper if you send it back to us.
00;04;58;10 - 00;05;25;00
Danielle Hayden
This is for you. So I want you to be super, super honest. So next to each subscription, all right, you're going to have a list of each vendor. Then you're going to have the cost. Then you'll have the function it serves in your business. And then how often you have actually used the software in your business. This audit step is essential to understand how your money is flowing out of the business.
00;05;25;02 - 00;05;49;17
Danielle Hayden
There is so much attention and focus on how we get money into our business. Yes, we need sales. Yes, we need revenue. Yes, I want you all to hit six figures and seven figures. But what I see more often than not with our clients, as they grow their revenue, expenses grow faster than their income. And they're not profitable.
00;05;49;19 - 00;06;09;17
Danielle Hayden
They're busting their tails, working harder than ever and not seeing the profit in their business. We've had several clients this year that say, I just can't take it anymore. I'm scaling back my business because this is where I find the joy in my business, and I don't want you to end up there. I want you to find joy from your business.
00;06;09;22 - 00;06;35;16
Danielle Hayden
I want you to be able to run a growing, profitable business. All right, once we have the sheet set up, we're going to evaluate each of those subscriptions against your 2025 focus, your 2025 intention. So that's why I said first step is to go back to episode 203. Really set your intention for 2025. Set your goals, right? Know where you're going.
00;06;35;18 - 00;07;03;07
Danielle Hayden
Then we can evaluate each subscription in the lens of our 2025 goals. Now I want you to prepare this section as if you're going to be presenting it to your board of directors. I mentioned in the beginning, my prior life before Kickstart was serving as the Chief Financial Officer for other mid-sized businesses, and in my work as a CFO, one of the number one things that I did was prepare the financials for our board.
00;07;03;09 - 00;07;33;22
Danielle Hayden
Now, the board would include the CEO, private equity firm, the investors, the people who had a stake in the success of the business. And as small business owners, sometimes we don't look at our finances. We don't look at our expenses as monumental, right? Some of these things seem small or trivial, but I really want you to put this lens, this analysis on, as if you are going to have to present it to your board of directors.
00;07;33;24 - 00;07;58;20
Danielle Hayden
They are going to want to know how will you are justifying every single expense in your business. So if you're not profitable or you had low profits last year, then we want to be able to say to the board, here's why and here's what we're doing about it. So as we go through the list of every single one of these expenses, you are going to ask yourself, does this help me achieve my specific goal this year?
00;07;58;27 - 00;08;31;04
Danielle Hayden
For example, if you are focused on scaling the top line revenue of your business, does the subscription help you automate some piece of the process? Does it help you increase efficiency? Is there a marketing focus, sales focus? Is it going to improve your customer experience to increase referrals into your business? So if your goal is to scale, your business is to grow top line revenue, how does that subscription help you achieve that goal?
00;08;31;12 - 00;08;55;02
Danielle Hayden
And is it necessary for my current stage of business. You know, it's really interesting how this happens. And we've seen clients do this in every different direction. So we sign up for our software when we're a solo business owner, where we're a small business owner, and we keep on placing Band-Aids and doing stitching of the software to make it serve us as we grow.
00;08;55;02 - 00;09;14;16
Danielle Hayden
Because when we're changing software, there's actually a cost to doing that. And sometimes it's just our time. But then we'd have to change software, get to know a new software, train, train ourselves, train our team. And so we end up staying in a software that is actually not helpful for where we are in our business. We've actually outgrown it.
00;09;14;16 - 00;09;37;19
Danielle Hayden
Sometimes it's even money. Like this one's only $10 a month, and if I increase to one that fits my current business size, it'll be $150 per month. And I just don't want to pay that much money. Hello! We want to be growing our business. We need to change our software. We need to upgrade the tools that we are using so that we are matching our growth to what we have available in our business.
00;09;37;21 - 00;09;59;18
Danielle Hayden
This could be in the opposite direction too. You may have signed up for a tool last year when you were in growth mode, but now your focus this year is on profitability, and so that subscription cost might no longer serve you and where you are at in your business today. So the next question to ask is “Is this software necessary for my current business stage?” Or we can reframe that as is this software still supporting where my business is at today?
00;09;59;25 - 00;10;24;20
Aubrey Philipp
Before we continue a quick favor. If you found value in this show and want us to keep growing with bigger guests and more strategies, please rate and review on Apple or Spotify. It really helps. Thanks for listening!
00;10;24;24 - 00;10;49;03
Danielle Hayden
Question number three. We have four questions. Question number three, does this subscription create a return on investment? Does it save you time, generate leads, improve the customer experience? There should be a measurable return for every expense that we have in our business. There should be some type of ROI. And when we work with a lot of our clients, a lot of this is saving time, you guys.
00;10;49;06 - 00;11;16;08
Danielle Hayden
It is okay to add in software to help save you time. There's only so much you as a business owner can do personally. So if you have subscriptions and software that is saving you administrative time or creating efficiency, you guys, that is well worth the money. That is a huge return on investment. Your time is so precious. All right,
00;11;16;09 - 00;11;43;19
Danielle Hayden
number four, does this subscription support my team? If you have a growing team, there are tools that will improve collaboration or training and might be worth keeping. But here's what I see more often than not is that as our teams grow, we have softwares and tools in our businesses that are redundant or they're under utilized, right? You as the business owner, you loved that tool.
00;11;43;22 - 00;12;07;09
Danielle Hayden
Your team actually doesn't enjoy using it. They are not utilizing it. And therefore we're paying for cost in our business and they are redundant costs. So are you seeing the return on investment and is your team seeing the same return of investment? Ask their opinion. You know, we did something really cool this year and we're going to do more of this throughout 2025.
00;12;07;11 - 00;12;30;28
Danielle Hayden
We actually got our bookkeepers on a group session to talk through how we are using Financial Sense. So Financial Sense is our project management tool. It is how we request statements and documents and how we send financial information to and from our clients. And I needed to know directly from my team, I needed to hear from the bookkeepers,
00;12;31;00 - 00;13;00;29
Danielle Hayden
what do we need to request a change on from Financial Sense? What are we using? What are we not using in the tool? We spend so much money and that software, it is my responsibility as the CEO of the business to make sure that we are utilizing that software as much as we possibly can, and taking that time to ask for feedback was absolutely an amazing experience for me, and I hope for my team as well.
00;13;01;00 - 00;13;25;24
Danielle Hayden
And so I encourage you to have a conversation with your team on whether or not these tools and subscriptions that you have in your business, if they are worth keeping. Right now, we're going to compare how the software serves your overarching big goals for this year. Remember, if your goal was to find balance, maybe spend a few more dinners with your family, pick up your kids from sports, whatever it might be, right?
00;13;25;24 - 00;13;53;19
Danielle Hayden
Maybe some self-care. We can't cancel subscriptions to save money and then lose efficiency. I don't want you to cancel anything for the sake of profitability and then create more manual work for yourself. This podcast episode today and this exercise, this tool of looking at subscriptions, it is not just about profitability. It is not canceling things, just for the sake of saving money.
00;13;53;20 - 00;14;16;03
Danielle Hayden
That's why we started off with what is our intention for this year? Because I don't want you to cancel anything that’s saving you time, money, or efficiency. Now we are on to decision time. After you have completed your evaluation, and I suggest that you take this Excel document where we have listed out all the vendors, put all of your notes in there, right?
00;14;16;03 - 00;14;35;18
Danielle Hayden
This analysis should be done in the document so that you can present it to your board. And you guys, if you need help with accountability, we can act as your accountability partner here. So keep all of your notes in the one document so that you can present this information and have it ready when you go to make your decision.
00;14;35;21 - 00;14;57;12
Danielle Hayden
So after your evaluation, you have three choices for each subscription. We're going to cut it. We're going to keep it but with intentionality. Or we're going to optimize it. So if we're cutting it, that means the subscription is no longer aligned with your goals. It doesn't provide an ROI. It's not being used as often as it should. So we are going to let it go.
00;14;57;14 - 00;15;17;06
Danielle Hayden
Think of it as freeing up resources for what really matters. I can already hear you guys, but I spent so much time setting it up. We paid for an implementation. I have that one team member who really likes it. If it does not align with your goals and it does not provide an ROI, it doesn't matter how much money you spent in the implementation fee.
00;15;17;07 - 00;15;37;21
Danielle Hayden
It doesn't matter if there's one team member who likes it. Doesn't matter how much time you spent setting it up, cut it. It's not serving us in the future. Number two option: We're going to keep it, but with intention. So if a subscription directly supports your goals and streamlines those critical processes in your business, we're going to keep it.
00;15;37;22 - 00;16;05;15
Danielle Hayden
But we're going to schedule a review mid-year to ensure it's still delivering value. We have to do this exercise on a regular basis. Lastly, if we decided to keep a subscription, we can optimize it. Are we utilizing all the key features? You know, I recently went to a conference. It was a continuous education conference, and there's so much buzz around A.I. and new tools and new software and all this amazing stuff out there.
00;16;05;17 - 00;16;37;15
Danielle Hayden
But I think the overarching theme, in my opinion, is that we're not using what we have. We're not actually using all of the features. So if we're going to keep a subscription, let's become experts in using that software. Let's rally our team so that as the business owner, we're not the only one who loves the software. Let's train our team and talk to them about what we can do to make sure that that software cost works for them just as much as it works for you.
00;16;37;17 - 00;17;06;17
Danielle Hayden
All right, let's take action. Either export the expenses from your accounting software, or use the sheet provided to you from your Kickstart Accounting, Inc. team. Audit your subscriptions. Do the reflection exercises and then set a review schedule. This isn't a one and done exercise. Your business constantly evolves and so do your subscriptions. So set a reminder to review your subscriptions quarterly or at least twice a year.
00;17;06;24 - 00;17;30;14
Danielle Hayden
You'll hear me talk about this again in our mid-year check in process over the summer, because I want us to be doing it at least twice per year. I have one other pro tip for you: If you've heard me talk about budgeting, budgeting is one of those amazing tools where we really get to set the plan not just the revenue plan, but the expense plan as well.
00;17;30;17 - 00;17;55;23
Danielle Hayden
Budgets aren't about cutting back. They’re permission to spend with intentionality. So if you have not set your 2025 budget, it is not too late because I want you to look at your revenue and then determine what subscriptions are going to help you hit your goals. And then using your budget, you can track your actual results as it happens throughout the year compared to your budget, compared to what you thought was going to happen.
00;17;55;26 - 00;18;24;25
Danielle Hayden
It is time to take action. Step one, list out all your subscriptions. Know what you're paying for and how often. Step two, evaluate each one against your goals. Keep only what aligns with your 2025 focus. Step three, make decisions. Cut it, keep it, or optimize your software based on your goals. Step four, present your findings and decisions to your accountability partner.
00;18;24;28 - 00;18;54;17
Danielle Hayden
Kickstart’s bookkeeping team can be your accountability partner and board here. And step five, schedule your quarterly reviews. I want you to stay intentional throughout the year. I believe in you. Every single one of you that is listening to this podcast. I believe in you. I know numbers are scary. Money is a taboo topic, but you are here. You are listening and I know that you can roll back your shoulders, stand a little straighter, and know your numbers once and for all.
00;18;54;17 - 00;19;16;03
Danielle Hayden
Remember, this isn't about cutting costs for the sake of cutting. It's about aligning every dollar you spend with the vision you have for your business. If you are a business owner who needs a money team, I invite you to go to Kickstart Accounting Inc. dot com or click the link in the show notes and come and book a discovery call.
00;19;16;04 - 00;19;56;11
Danielle Hayden
The Kickstart Accounting, Inc. team and I are here to be a resource for you on your entrepreneurial journey. We want to take the bookkeeping off of your plate and help arm you with the information you need to grow and thrive in your business. Don't wait, click the link below and let's get started!