Cost-cutting in business goes hand in hand with saving money and turning a higher profit. However, it does not need to be something backhanded or feared as the term might imply. In reality, cost-cutting in business does not need to be all that dissimilar to what would be done in a home. Let us explore some areas in which a few dollars can be saved.
Automate inventory management
Aside from being a decision that promotes ease of use and tidy accounts, implementing inventory management software also negates the need for hours spent tracking cash movements through your accounting journals which, of course, equates to a labour cost. It is also far easier to keep track of all those said dollars and make them work for their keep, as each inventory stock item (which costs to buy and incurs further costs in storage until sold) can be scanned at each point in the production process. In short, though it can take some getting used to, inventory management software ensures that inventory management is in control at any point in time for a fraction of the cost and labour of more traditional methods.
Switch off the lights
In corporate buildings with air-conditioning units, heating units, lights and equipment, power usage is unprecedented. Therefore, there is a massive opportunity to save power if, even if just light switches were all turned off when a room was not in use. This may be a case of renewing staff culture or it could be achieved through adjustments such as timer switches or motion sensors.
These are examples of active energy-saving initiatives but a great deal of power can be saved through passive measures such as having double-glazed windows and ensuring window seals protects the office from the outside elements. It is also astounding the amount of electricity passively used per year through the standby mode of appliances and machinery. Do not be fooled by ‘power-saving’ or standby modes and instead, power appliances down at the end of each day.
Despite being a trendy and albeit environmentally-friendly initiative, a paperless workplace can actually function on lower running costs. The cost of paper and printing certainly adds up and can represent an exorbitant running cost. Other advantages of a paperless office include less clutter, easier to clean and sort, and less time spent filing and chasing up historical documents. Storing your documents in the cloud also allows for team collaboration.
Embrace the virtual staff
Telecommuting or working from home is a significant method of cost saving and increasing efficiency. Studies have shown that allowing employees a degree of flexibility in their jobs resulted in greater job satisfaction, which preceded increased productivity. In a physical sense, it also saves money in the provision of utilities and office space and saves the employees time and money in travel each day. This solution is really a win-win in most circumstances and certainly worth some thought for its financial benefits to both parties.
Looking for ordering opportunities
The savvy manager or business-owner knows that a lot of saving can come from seeking out supplier discounts. This may come from ordering bulk quantities, locking-in to an ordering plan or even simply asking what suppliers can offer with the implication it is a competitive market out there. Of course, for assistance in knowing how far you can push the ordering boundaries for your company, inventory management software is extremely helpful.
In addition to this, orders can be made by credit cards that might have a rewards program attached to them. By paying with credit card and ensuring the bill is settled in the interest free repayment period, the money can stay in the business account longer thereby accruing more interest and at no added penalty.Topics: business costs, cost reduction, small business, SME