4 Smart Ways to Cut Business Costs1 min read
In today’s challenging business environment, keeping costs under control is crucial. While staff reduction is, without a doubt, one of the quickest ways for a business to cut costs it is not always the best cost-cutting strategy. Reduced productivity can stem from drastic job cuts and decrease profitability due to slower growth. When situations improve, your company may continue to struggle if replacing skilled workers proves to be difficult.
Here are some alternative cost-control strategies to look at:
- Review your facility costs. Consider moving to a less costly location if your company owns expensive office space. Make sure the new location is still convenient for your customers. Sharing office space with a compatible company may be another option if a move is out of the question. Savings from shared operating costs will go directly to the bottom line.
- Determine if sale-leaseback arrangements are right for your company. Sale-leaseback arrangements enable your company to generate funds for operations and transfer the burden of ownership to the buyer, from whom you rent back the office space.
- Recalculate the cost of supplies and inventory. Take a moment to analyze the cost of supplies and materials. Is it possible you are you stocking too far in advance or stocking too much material? Would it be possible to arrange for your suppliers to ship directly to your customers? Can you arrange to have products shipped directly to customers by your suppliers? Occasionally you should conduct a competitive review of suppliers, and select those who can deliver good quality and service at the lowest cost. In addition, you may inquire about volume discounts to avoid paying full price.
- Consider outsourcing. Activities that require a great deal of your time and resources or are prone to error could be outsourced. Payroll processing, for example, may be done at a fraction of your current costs if outsourced to a payroll vendor.
We are happy to help your business determine the best cost-control strategies!
By Kathy Hopkins
Kathy has been a practicing accountant since 1985 and provides a vast repertoire of services that include budget comparison, reporting and analysis, QuickBooks® training, cash flow projections, financial analysis, compilations, reviews, audit preparation and management, as well as strategic planning.
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