Trying to control costs in your business can seem like an endless chore. But every dollar you save is another dollar added to your company’s profits. While you’re spending time marketing and adding to your businesses income, don’t forget to spend some time eliminating unneeded expenses.
1. If you don’t have time to do it, delegate someone to watch expenses on a monthly basis. When a line item goes over for the month, they need to research and see why. Don’t let unnecessary charges continue because no one noticed. Be sure someone is clearly in charge of controlling costs.
2. Check all invoices that are paid. Make sure you’re not double billed or charged extra for work that wasn’t done. Be sure final invoices match original quotes.
3. Do an annual audit of all continuing costs and see if there are cheaper alternatives. Sometimes these items are paid month after month and no one takes the time to see if market prices have dropped.
Long distance charges
Cleaning and maintenance services
4. Make sure you have a clear expense reimbursement policy for employees.
Purchases should be approved in advance, not after the items are already bought Receipts turned in without prior approval should not be reimbursed. But this policy needs to be stated in writing and discussed with employees in advance.
For any out of town travel, there needs to be a cap on hotel room prices and charges for eating out.
5. Errands should only be run at a set time and they should all be done at the same time. There’s no need to run to the bank one day, to the post office the next, and to the office supply store another day. Consolidate all your errands into one trip. Have office supplies delivered whenever possible. Check into doing remote deposits from your office to save trips to the bank.
6. Do an energy audit to cut down on fuel costs. Buy energy saving copiers and computers. By making a few changes you can sometimes reduce your energy costs substantially over the course of a year.
7. Set a budget at the beginning of the year and make sure employees understand they’re responsible for working within that budget. Offer incentives for employees who keep their costs under budget without sacrificing customer service.
8. When the workload is too heavy, try outsourcing or hiring temps instead of hiring another employee.
9. Recycle toner cartridges and other office supplies.
10. Renegotiate contracts with vendors once you’ve increased your purchasing power and become one of their valued customers.
11. Provide a safe work environment. Train employees well on all equipment and machinery. This will help you reduce the chances of a large worker’s compensation claim.
12. No matter how many bookkeepers or accountants you hire, be sure you personally track your company’s financial health. Never give one person responsibility for all the financial aspects of your business. If you have a bookkeeper, have them get all the checks and invoices prepared, but YOU sign the checks. Many small business owners have been devastated to find that a trusted employee has been embezzling money for years. Don’t let that happen to your business.
By performing due diligence and staying aware of your company’s finances, you’ll be able to control costs and keep your business healthy.