Seven Top Tips For Expense Management To enhance Profitability
If being in business were easy, everyone would do it. Those of you running your own companies already know how hard it can be.
But as the next problem drops into your lap, take comfort from the fact that nothing in life can be worthwhile AND easy at the same time.
But it is possible to bring a little more ‘easy’ into your business life by looking outside the box when it comes to boosting the bottom line; to doing a bit of ‘bobbing and weaving’ around your cost base.
Here are seven top tips to help you to do just that.
- Invest in an accountant. Understanding how the tax system works, and how a small business can function legally within it, can reduce the tax bill your company pays. We know some people running businesses who do their own accounts, and we always say that’s a mistake. For a start, the task eats up time, but generates no revenue. Better to do work for customers, and call in a good accountant who understands not only how tax works, but also how it works in relation to your own circumstances. That way, you’ll pay as little as is legally possible.
- Turn stuff off. We know of a senior manager who didn’t turn his desktop computer off for more than three years, already when he went on a fortnight’s holiday. Perhaps he worked in one of the offices in our picture? Think of the electricity being wasted by lights burning in unoccupied offices, and other computers humming away to themselves when no-one’s there. Turning off appliances that aren’t in use reduces energy bills. And whilst we’re talking about reducing energy costs, it’s worth looking at investment in renewables. PV panels or solar water heating on the roof can make a meaningful contribution. (And all of those care kind to the planet and good for your CSR reporting too)
- excursion differently, or not at all. Microsoft’s latest suite of business software, Office 365, includes the option for employees to have Skype for Business accounts. As the software becomes more widely used, and its ability to put people in the same room on a virtual basis becomes more accepted, you could save twice. The first saving is on the cost of running vehicles; the second is eliminating the possible ‘dead’ time involved in driving to see clients, when employees are being paid but earning no revenue.
- Keep a tight rein on stock. When you see shelves complete of stock in your warehouse or offices, try to imagine it as piles of money – but it’s money you can’t use to pay bills or staff; money you can’t buy more raw materials with. As a consequence it could be seen as a waste. Keep stock levels as low as possible to satisfy customer need, and you’ll have more cash in the bank with which to sustain and grow the business.
- Don’t get cosy. When did you last review the prices wrapped up in the deals you’ve had with the suppliers you’ve been working with for years? Are they nevertheless competitive? How do you know? For that matter, were they ever competitive? It never hurts to have a chat about how there might be ways to trim costs. Perhaps a supplier might be able to offer a slightly different material that would do the job for you but at a better price. If you don’t ask, you won’t know.
- Measure and control. Use a money management app to bring your expense management onto a formal and efficient footing. There are a range of products designed to suit everyone from only traders, where we started more than a decade ago, to versions for small businesses, SMEs and corporates employing thousands of people. All have features applicable to the size of business they’re aimed at. The only way to find out if they’ll work for you is to give them a real-time, in-business trial. They could revolutionise your expense management systems just as effectively.
- Remember the other budget. This is about time, and how you’d be well advised not to excursion yourself too hard by pumping too much of yours into the business, because you can’t order in any more. By streamlining processes with the help of obtainable technology and working practices you’ll be able to unprotected to more in less time, which will enhance your quality of life in addition as your health. And that will permit you to keep a sharp focus on the way you run your business – being tired or overworked can rule to expensive mistakes. Don’t let that happen to you.